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Leonard Calin Abrudan, Mirabela Constanta Matei and Maria Madela Abrudan

Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, 2018, vol. 12, issue 1, 28-38

Abstract: The paper aims to identify and evaluate methods, processes, and activities through which a business may evolve, in terms of selling, market share and, eventually, profit. There are many types of economic activities and not all of them perform at the same level at specific moments. The paper will try to find out if sharing the activities and responsibilities comprised by an economic process may end in a higher level of profit for all participants. It will be about considering a way of sharing these responsibilities, which had gained significantly in the late years, in terms of reputation, know-how and theoretical consideration. This type of business conduct is drop shipping and for it is unusual to hold inventory. In terms of being responsible to her clients, sometimes a drop shipper has to give up the routine, to get out from the comfort zone and to try to find new ways in which she can provide superior utility for the customers and profits both for her and her suppliers. The problem here is that the inventory bears costs, many of them, and the paper will try to model an optimum sizing for the quantity that must be purchased in this respect. The newsvendor model will be applied to a real company in an empirical approach and hopefully, some useful outcomes will result. The scientific literature is not concerning much about this usage of this particular model and this paper will try to help entrepreneurs to find and use another instrument, which may prove useful. In a globalized economy, every useful item could make the difference between a company and its competitors.

Keywords: drop shipping; inventory; newsvendor model; profit. (search for similar items in EconPapers)
Date: 2018
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