Methodology

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A sample is taken from a large retail organization to determine the effectiveness of SC replenishment for a website retail application. This retailer uses two types of replenishment: organization replenishment and third party (vendor) replenishment. Organization replenishment is the retail organization using its own distribution centers (on the SC) to replenish products, while vendor replenishment is the retail organization using outside distribution centers (of vendors) to replenish products. The sample represents information for 515 products sold on the Internet requiring replenishment. Inventory (historical) data is used to analyze the organizational performance (effectiveness) of the electronic SC in terms of inventory level, order cycle, and availability for the distributor-retail outlet and the retail outlet-customer links in the SC and to assess the inventory management and buying habits of consumers via a website.

Method

To analyze replenishment via a website, the z statistic is utilized. The z statistic is used in the study to test the significance of the differences between the replenishment options—via the organization itself or via a third-party vendor (distributor). The analyses determine whether any significant differences exist given the replenishment option used. For example, one would expect lower inventory levels, shorter order cycles (and fewer items ordered in each order because holding less inventory), and greater availability (resulting in more items sold) when an organization uses their own replenishment (i.e., the company's distribution center) versus an outside vendor replenishment.

Accordingly, the following overall research hypothesis will be tested:

Differences exist, in term of effectiveness, between replenishment types when restocking products via a website.

Moreover, in order to explore inventory management issues and customer buying habits when using a website, analyses are conducted over time and across product categories. The effectiveness measures are assessed by month for each product category.



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Advanced Topics in End User Computing (Vol. 3)
Advanced Topics in End User Computing, Vol. 3
ISBN: 1591402573
EAN: 2147483647
Year: 2003
Pages: 191

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