Cuneyt Eroglu’s research while affiliated with Northeastern University and other places

While national culture has been recognized as an important driver of business decisions, our understanding of its effects on firm-level inventories is limited. In this paper, we argue that the national culture dimensions of uncertainty avoidance and long-term orientation influence biases and behaviors that affect how managers make inventory decisions in light of demand unpredictability. These dimensions of national culture thereby explain variations in the strength of the demand unpredictability-inventory relationship at the firm level. Using a dataset of 9,127 firm-year observations from 25 countries and 20 manufacturing industries between 2006 and 2019, we find that the positive effect of demand unpredictability on inventories is augmented in high uncertainty avoidance cultures and weakened in long-term oriented cultures. These results are consistent with the notion that demand unpredictability is differentially interpreted across national cultures, thus explaining variations in firms’ inventory levels beyond what can be predicted by traditional inventory theory models. Implications for future research and managerial practice are discussed.

Numerous studies have examined the relationship between inventory management and financial performance. However, the focus of such empirical work has primarily been on how a firm's own inventory characteristics affect its performance. Our objective is to extend this body of literature beyond the firm‐level. We draw on inventory theory and resource‐based theories to hypothesize about the effect of supplier inventory leanness on a focal firm's financial performance and how supplier and focal firm inventory leanness interact to affect such outcomes. We test our hypotheses using a large panel dataset of supplier‐focal firm relationships obtained from Compustat's Customer Segment database and aggregated to the focal firm‐quarter level, as well as firm financial information from Compustat's Fundamentals Quarterly database. The econometric analyses provide evidence that supplier inventory leanness influences focal firm financial performance indirectly through the interaction with the firm's own inventory leanness. In particular, our estimation results detail how supplier inventory leanness affects the non‐linearity of the focal firm's inventory leanness‐financial performance relationship and its optimal inventory leanness level. The findings broaden the scope of empirical inventory literature and highlight supplier inventory leanness as an important consideration in firm‐level inventory decision making.

We examine the extent to which suppliers assimilate to their customers' inventory leanness levels. Drawing on institutional theory, we hypothesize that there is a positive relationship between major customer and supplier inventory leanness and that this effect is moderated by compliant, reflexive, and normative isomorphic forces. Specifically, we contend that interdependence, uncertainty, and the age of the customer−supplier relationship strengthen the supplier's imitative behaviors and, thus, the assimilation to its major customer's inventory leanness. The hypotheses are tested empirically using a large panel data set of dyadic customer–supplier observations obtained from a variety of archival databases. The econometric analyses provide strong and robust evidence of interorganizational imitation in the domain of inventory management and, thus, document the role key customers play in shaping supplier firms' inventories. We discuss implications of our research for the further development and broadening of the academic inventory literature as well as managerial practice.

In the retail industry, backroom inventories are typically associated with higher labor costs and greater operational complexity. Thus, retailers look for ways to eliminate backroom inventories. A heuristic used for this purpose is the pack‐and‐a‐half rule which suggests that the shelf space allocated for a product should be at least 50% larger than the case pack quantity in which the product is delivered. Despite its popularity among retailers, the pack‐and‐a‐half rule has been ignored in the academic literature. We introduce the pack‐and‐a‐half rule, assess its impact on a retailer's profits, identify cost, demand, and product characteristics driving this impact, and propose a modification. Based on an analysis of data obtained from a retailer on 1,986 SKUs in 20 categories, we find that the pack‐and‐a‐half rule decreases a retailer's profits, on average, by 10% when applied uniformly across all SKUs. Further, this decrease is significantly affected by product depth, product width, demand elasticity, case pack quantity, and inventory carrying cost. Finally, we develop a set of modifications based on these variables where the pack‐and‐a‐half rule is applied selectively and in a stepwise fashion. These modifications limit the decrease in a retailer's profits to a range between 6% and 7%.

Resource allocation decisions in the areas of service quality and environmental sustainability can be challenging because ex ante it is difficult to assess the potential performance benefits of such investments. This paper investigates the operating performance implications of service quality and environmental sustainability in the context of logistics. Specifically, using the resource‐based view of the firm as the theoretical framework, we examine future operating performance of firms that won service quality and environmental sustainability awards in logistics between 2004 and 2013. Awardees include firms that are logistics service providers and firms that operate in other industries; in all cases, these awards recognize firms’ logistics capabilities. Our results reveal that firms’ service quality and environmental sustainability capabilities, as recognized by winning awards in the respective categories, are associated with improved operating performance during the three‐year post‐award period. Additionally, the performance benefits associated with service quality awards are greater than those associated with environmental sustainability awards. Our analysis further shows that whereas environmental sustainability relates to better future operating performance by enhancing only sales growth, service quality is positively associated with enhanced sales growth as well as cost efficiency. Finally, our results also indicate that positive operating performance implications of these awards are not contingent on the industry competitive intensity or innovative intensity. Implications for research and practice are discussed. This article is protected by copyright. All rights reserved.

Although quality, safety, and sustainability are important concerns in logistics, managers are sometimes reluctant to invest in these areas because it is not always clear how such investments will benefit firm performance. Empirical literature provides little guidance in the context of logistics as previous studies report mixed findings across a diverse set of industries, which may not be directly applicable to logistics. To address this gap, we conducted an event study to estimate the stock market reaction to quality, safety, and sustainability award announcements in logistics. Based on 244 award announcements during the period 2004–13, we found that stock market participants react positively to announcements of these awards. The market reaction appears to be stronger for sustainability awards than for quality and safety awards. Our results also suggest that the market reacts more favorably to quality and sustainability award announcements for firms with better past financial performance and for smaller firms.

Gulf carriers, such as Emirates Airline, Etihad Airways, and Qatar Airways, have expanded aggressively and are creating an increasingly dense global network. These carriers’ future growth prospects, however, hinge on their ability to gain access to markets in Europe and America, for example. Existing bilateral agreements stifle the Gulf carriers’ ambitious expansion plans in some instances, and incumbent carriers lobby to restrict further market access. To contribute to this debate, the objective of this research is to empirically examine the effects of Gulf carrier competition on U.S. carriers’ passenger volumes and fares in international route markets. Based on data obtained from the U.S. Department of Transportation, the empirical results suggest that greater competition by Gulf carriers in U.S. international markets is associated with (1) significant growth in U.S.–Middle East traffic volumes and (2) small but statistically significant traffic losses and fare reductions for U.S. carriers in route markets connecting the U.S. with Africa, Asia, Australia and Europe.

Logistics management refers to the management of product flows across a firm's supply chain in order to meet customer requirements. More formally, logistics management is defined as “that part of supply chain management that plans, implements, and controls the efficient, effective, forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements” (cscmp.org). In simpler terms, the goal of logistics is to have the right product, at the right time, in the right place, at the right cost, and in the right condition.

Even though supply chain management is sometimes used as a new name for logistics management, there is a growing consensus that supply chain management is a much broader concept. While logistics management is limited to managing product flows across the supply chain, supply chain management is about the management and integration of key value-adding business processes within and between firms in a supply chain. Over the past decade, numerous authors, both academics and practitioners, have worked to provide guidelines for implementing intra- and inter-firm integrations of business processes. Two prominent frameworks that have emerged from these efforts, namely, the supply chain management framework developed by the Global Supply Chain Forum and the Supply Chain Operations Reference (SCOR®) model developed by the Supply Chain Council. This article summarizes these frameworks.

This paper adds to the empirical inventory management literature by examining the moderating effects of environmental dynamism on the relationship between inventory leanness and financial performance. While the financial implications of inventory management practices have been extensively studied in the literature, it is clear that lean inventory strategies may not have the same payoff for all firms in all industries. Grounded in inventory theory, this study explores how firm characteristics and environmental dynamism—measured in terms of innovative intensity, demand uncertainty and competitive intensity—moderate the inventory leanness-performance link. We use hierarchical linear modeling to analyze a data set of 5,749 firm-year observations from 123 U.S. manufacturing industries. In line with the hypotheses set forth, the results indicate that innovative intensity in an industry increases the effect of inventory leanness on firm performance while competitive intensity has the opposite effect. The hypothesis with respect to the moderating role of demand uncertainty is not supported. Another interesting and important finding is that inventory leanness accounts for nearly one third of the variation in firm performance after controlling for firm size and growth, thus underlining the importance of efficient and effective inventory management for overall firm success.