TY - JOUR
T1 - Inventory management and loss in beer retailing
AU - Richards, Timothy J.
AU - Hamilton, Stephen F.
N1 - Funding Information:
Users may copy with permission. Helpful comments from seminar participants at the University of Arizona are gratefully acknowledged, as is funding from Agriculture and Food Research Initiative (National Institute for Food and Agriculture, USDA) grant no. 2019‐05808.
Publisher Copyright:
© 2022 Wiley Periodicals LLC.
PY - 2022/7/1
Y1 - 2022/7/1
N2 - Food waste, or loss, at the wholesale and retail levels accounts for some 40% of the total amount of supply-chain waste. While zero waste is never optimal, there are managerial variables that contribute to the level of loss. In this paper, we use data from a large beverage distributor to estimate the most important causes of loss, and investigate which can be controlled in an economically-viable way. Controlling for a range of important environmental (uncontrollable) variables, we find that competitive pricing, case sets, assortment size, package size, and inefficiency are the most important determinants of loss. However, our most important finding highlights the importance of “discretion over rules” in inventory management as salesforce discretion in delivering less-than-ordered amounts is statistically important and one of the only ways management can directly influence supply-chain loss. Our findings contribute to the growing literature on food and beverage supply-chain sustainability, food loss and waste, and inventory management. As such, our findings are likely to be of interest to both managers in the food and beverage supply chain (manufacturers, distributors, and retailers) and policy makers interested in reducing food and beverage loss and improving food system sustainability. [EconLit Citations: D43, L13, M31].
AB - Food waste, or loss, at the wholesale and retail levels accounts for some 40% of the total amount of supply-chain waste. While zero waste is never optimal, there are managerial variables that contribute to the level of loss. In this paper, we use data from a large beverage distributor to estimate the most important causes of loss, and investigate which can be controlled in an economically-viable way. Controlling for a range of important environmental (uncontrollable) variables, we find that competitive pricing, case sets, assortment size, package size, and inefficiency are the most important determinants of loss. However, our most important finding highlights the importance of “discretion over rules” in inventory management as salesforce discretion in delivering less-than-ordered amounts is statistically important and one of the only ways management can directly influence supply-chain loss. Our findings contribute to the growing literature on food and beverage supply-chain sustainability, food loss and waste, and inventory management. As such, our findings are likely to be of interest to both managers in the food and beverage supply chain (manufacturers, distributors, and retailers) and policy makers interested in reducing food and beverage loss and improving food system sustainability. [EconLit Citations: D43, L13, M31].
KW - beverages
KW - distribution
KW - food waste
KW - inventory management
KW - sustainability
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U2 - 10.1002/agr.21740
DO - 10.1002/agr.21740
M3 - Article
AN - SCOPUS:85127806388
SN - 0742-4477
VL - 38
SP - 461
EP - 485
JO - Agribusiness
JF - Agribusiness
IS - 3
ER -