 Supply disruption management under consumer panic buying and social learning effectsRui Zheng, Biying Shou and Jun Yang Omega, 2021, vol. 101, issue C 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. Keywords: Social learning; Supply disruption; Panic buying; Ordering policy (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jomega:v:101:y:2021:i:c:s0305048319307959 Ordering information: This journal article can be ordered from DOI: 10.1016/j.omega.2020.102238 Access Statistics for this article Omega is currently edited by B. Lev More articles in Omega from Elsevier |
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