| Article ID: | iaor20001280 |
| Country: | Netherlands |
| Volume: | 58 |
| Issue: | 1 |
| Start Page Number: | 57 |
| End Page Number: | 61 |
| Publication Date: | Jan 1999 |
| Journal: | International Journal of Production Economics |
| Authors: | Bordley Robert, Beltramo Mark, Blumenfeld Dennis |
| Keywords: | inventory |
In many industries, products are sold out of inventory. When inventory shortages are possible, expected product sales will fall short of expected product demand. We find that this shortfall is proportional to the standard deviation of demand. As we show, this implies that consolidating retailer units – which leads to a lower standard deviation for the aggregate demand – can increase sales.