Supply disruption management under consumer panic buying and social learning effects
By Rui Zheng, Biying Shou, Jun Yang. Omega, 2021
171 citations recorded by the source corpus.
Abstract This study investigates the impact of consumers’ social learning (SL) behavior on their purchase decisions under supply disruption risk, and accordingly, how retailers should take this into account and optimize their inventory ordering strategy. We develop a model with two batches of consumers. The first batch of consumers evaluates the potential supply disruption risk and decides whether to stockpile extra units for future consumption (i.e., panic buying). Their purchase decisions influence the second batch of consumers via social learning. We derive the optimal inventory ordering policy for the retailer and evaluate the retailer’s loss of profit if the impact of SL is not taken into consideration. We show that when the portion of panic buying consumers among the first batch (which we define as the initial panic intensity) is at a moderate level, consumer panic buying and SL behaviors can be beneficial for the retailer and the social welfare. In contrast, if the initial panic intensity is very low or very high, SL can hurt the retailer’s profit and the total social welfare.
Subfields: Management Information Systems, Strategy and Management
View Paper: https://www.semanticscholar.org/paper/2939439640bbb88a93b77829441d4d57e5143b90
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In Strategy and Management
Citations in the corpus
- The panic buying behavior of consumers during the COVID-19 pandemic: Examining the influences of uncertainty, perceptions of severity, perceptions of scarcity, and anxiety (2021, background): “…have considered panic buying by individuals from different perspectives for instance policy and legal actions (Kobayashi and Anbumozhi, 2016), retailers and suppliers (Shou et al., 2011; Zheng et al., 2020), panic buying of vaccines (Godlee, 2010), and natural disasters (Thomas and Mora, 2014).”
- Panic buying research: A systematic literature review and future research agenda (2021, unknown): “, 2007), impulsive hoarding, phantom hoarding (Sterman & Dogan, 2015) and stockpiling (Chronopolous et al., 2020; Zheng et al., 2020).”