Forthcoming and Online First Articles

International Journal of Inventory Research

International Journal of Inventory Research (IJIR)

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International Journal of Inventory Research (1 paper in press)

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  • Learning under the inventory problem of economic order quantity: a behavioural study   Order a copy of this article
    by Yan Wu, Kay-Yut Chen, Yan Lang 
    Abstract: Inventory management relies on the economic order quantity (EOQ) and newsvendor models. While the newsvendor model has received much attention in the field of behavioural operations management (BOM), the EOQ problem remains largely untouched. This study presents one of the first empirical examinations of inventory decisions under the deterministic EOQ model. The experiments analyse learning behaviours in response to stationary and non-stationary parametric environments. Results show that participants are less likely to repeat suboptimal decisions when parameters remain static. When confronted with cost parameter shocks, most players can improve decisions over time and benefit from past experiences. Two behavioural models, a modified experience-weighted-attraction (EWA) model and an exploratory behaviour-based error reduction model (ERM), are developed to analyse the decision-making process. These models reveal the impact of different behavioural traits on learning under EOQ. Additional experiments are conducted to improve empirical performance.
    Keywords: economic order quantity; EOQ; inventory management; behavioural operations management; BOM; learning; reinforcement; probabilistic choice.
    DOI: 10.1504/IJIR.2023.10054788