The empirical analysis in the paper finds that, on average, taking on high leverage increases stockouts by about 8 to 9 percent. To put this magnitude in perspective, I construct an estimate of the profit impact of an 8 percent increase in stockouts for the average supermarket firm. The calculation, which is presented in Panel A of Table A1, trades off the benefit of reduced inventory investmen...

The selling of sophisticated equipment is very different from the sale of simple products and requires a considerable amount of strategizing to achieve success. In clear recognition of this fact, Canon has a sales strategy training program that uses SPIN@ selling methodology to train major account sales representatives. However, this training gets quickly lost in the multitude of daily tasks th...

Abstract Standard New Keynesian models have often neglected temporary sales. In this paper, we ask whether this treatment is appropriate. In the empirical part of the paper, we provide evidence using Japanese scanner data covering the last two decades that the frequency of sales was closely related with macroeconomic developments. Specifically, we find that the frequency of sales and hours work...

Delayed payment (trade credit) and prepayment are widely observed forms of interfirm credit. We propose a simple theory to account for the prevalence of such credit. A downstream firm trades off inventory holding costs against lost sales. Lost final sales impose a negative externality on the upstream firm. The solution requires a subsidy limited by the value of inputs. Allowing the downstream f...

A production planning approach is addressed in this paper for multi-period, multi-product and multi-route production environment considering backlogs and lost sales. When the production capacity or order demand fluctuates, it could lead to a low utilization of the production resource if considering the production system as a whole. Hence, each production stage and inventory is depicted separate...

Our work solves the problem of inventory tracking in the retail industry using Hidden Markov Models. It has been observed that inventory records are extremely inaccurate in practice (cf. [1–4]). Reasons for this inaccuracy are item losses due to item theft, mishandling, etc. which are unaccounted. Even more important are the lost sales due to lack of items on the shelf, called stockout losses. ...