Assortment Size Research Articles

The Influence of Scheduling Style on Assortment Size

Abstract People use two types of scheduling styles to schedule their daily activities, namely clock-time or event-time. When people use clock time, they organize tasks based on a clock. When they use event-time, they organize tasks based on their order of completion. This research shows that adopting different scheduling styles influence consumers’ assortment size preferences. We demonstrate, through two studies, that consumers using event-time scheduling style prefer a larger assortment size whereas consumers using clock-time scheduling style prefer a smaller assortment size. We also show that this effect is mediated by desirability-feasibility consideration. Specifically, event-time scheduling style leads consumers to focus on the desirability considerations, which leads them to prefer larger assortment size while shopping. On the other hand, clock-time scheduling style leads consumers to focus on the feasibility considerations, which leads them to prefer smaller assortment size while shopping. We also discuss the theoretical and managerial implications of our research.

Managing Demand Uncertainty through Core Acquisition in Remanufacturing

We discuss the optimal raw material acquisition strategy for a third party remanufacturer (3PR). We specifically investigate whether a 3PR should acquire used products or cores in bulk with uncertain quality levels, or in sorted grades with known quality levels; and whether to acquire and remanufacture cores before the demand is realized (planned acquisition), or after the demand is realized (reactive acquisition), or on both occasions (sequential acquisition). When only sorted cores are acquired, we find that, (i) it is optimal to acquire cores in multiple grades to balance acquisition and remanufacturing costs; (ii) if reactive acquisition is possible, it reduces the assortment size (number of grades in which cores are acquired) and the total inventory acquired in the planned acquisition; and (iii) the optimal portfolio of grades to acquire and the optimal acquisition and remanufacturing quantities of these grades can be determined analytically. When bulk cores are acquired in addition to sorted cores, the property of reduction in assortment size of the planned acquisition is preserved. We also show that the 3PR should acquire only a fraction of the demand in planned acquisition, and leave the rest for reactive acquisition. This fraction changes during the lifecycle of a remanufactured product. Using a combination of empirical and realistic data from a smartphone remanufacturer we show that sequential acquisition increases expected profit by up to 8% and 27% over only planned and only reactive acquisitions respectively, and reduces the inventory acquired by up to 21% over only planned acquisition.

FRUIT OR CANDY? EASE OF JUSTIFICATION AS A MODERATOR OF THE EFFECT OF ASSORTMENT SIZE ON CONSUMER CHOICE

When going out to eat or to the movies people often struggle to reach a final decision. Within these choices individuals are constantly faced with the dilemma of choosing between vices and virtues.It has been shown that assortment size has an impact on whether consumers make a choice, but does it also influence the kind of options that are chosen?When selecting lunch, one could choose between tasty but unhealthy options, or healthier but less gratifying alternatives (Sela, Berger, & Liu, 2009). So, could a larger menu really make us more prone to choose a salad? Conversely, is there a mechanism which might encourage the selection of more self-indulgent choices?The present paper explores existing work on the influence of assortment size, character of options, and ease of justification in the consumer's decision-making process before providing findings in two experiments. In E1, individuals' decisions were modified by assortment size and character of options while E2 also adds accessible justifications (for choosing vices) created by subjects' prior altruistic decisions.Variety and Decision-MakingThe variety of alternatives shapes consumer in multiple ways. Prior research suggests that larger assortment size in creases satisfaction (Sela et al., 2009). However, while many of the earlier studies on variety argued that more options are better, many current researchers recently highlighted the downsides of much choice (Berger, Draganska, & Simonson, 2007). This stream of research suggests that may become overwhelming and choosing from larger assortments increases difficulty and in some cases even regret (Berger et al., 2007).Decision DifficultyIyengar and Lepper (2000) found empirical evidence for decision difficulty (choice overload) in a study in which the quality of essays decreased if the number of topics students could choose from increased. It is not only the motivation to choose which decreases when facing too many options, but also the overall satisfaction. Too many alternatives cause distress. As a result, decision making becomes hard, almost unbearable. This argument is later strengthened by Scheibehenne, Greifeneder and Todd (2010) in their meta-analytic review of overload (a collection of 50 published and unpublished studies), which explains that facing too many options to choose from ultimately decreases the motivation to choose any of them.Necessary Preconditions of Choice OverloadResearchers who focused on overload in the past have commonly argued that negative effects do not always occur but rather depend on certain necessary preconditions. One of these important preconditions is lack of familiarity with, or prior preferences for, items in the assortment (Iyengar & Lepper, 2000).Additionally, Chernev (2003) found that consumers with clear prior preferences prefer to choose from larger assortments. The same author also showed that consumers' probability and satisfaction increased with the number of options to choose from, which is the opposite of overload. Similar results were presented by Mogilner, Rudnick and Iyengar (2008) where a negative relationship between assortment size and satisfaction was only found for those who were relatively less familiar with the domain.For this reason, experiments on overload have typically used options participants were not very familiar with to prevent strong prior preferences for a specific option. If, however, the participants were familiar with some options, it might result in a highly selective search process that would allow them to ignore most of the assortment. This study also used unfamiliar options (relatively unknown brands of sweets in E1, and types of computers in E2) to eliminate this effect.Character of Options and Decision-MakingAnother relevant factor that plays a part in decision-making is the character of options. …

Retail Assortment: Variety and Perceived Value

Consumers today see an exciting explosion of choices, new categories and new shopping options and have increasing disposable income to fulfil their aspirations. The retail industry aims at giving convenience and comfort in shopping to customers. In this context, the purpose of the study is to conceptualise the customers’ evaluations of assortment variety. This study also aims to propose a framework of relationships among assortment variety, assortment benefits, assortment costs and perceived assortment value. An extensive literature review has been conducted to propose a testable conceptual framework. The study also finds out seven consequences of assortment unavailability such as store switch, category switch, brand switch, item switch, purchase postponement, cancel of purchase and size switch. The result of the study will enlighten the retailers and managers to understand the consumer reactions towards assortment variety and assortment unavailability which will help them to maintain an appropriate assortment size and display.

The positive effect of assortment size on purchase likelihood: The moderating influence of decision order

The effect of assortment size on purchase decisions is an ongoing subject of debate, in light of conflicting findings (Scheibehenne, Greifeneder, & Todd, 2010). The authors show that a key determinant of the effect is the order in which “whether to buy” and “which option to choose” decisions are made. Increasing assortment size has a more positive effect on the likelihood of consumers to make a purchase when the initial decision emphasis is on whether to make a purchase from a given set of options, as opposed to first identifying the best available option in the set. This prediction is based on the proposition that decision order determines how likely consumers are to make trade-offs between the perceived costs and benefits associated with a large product assortment, and that the benefits are given relatively greater weight when consumers decide first “whether to buy” (rather than “which option to choose”). Two incentive-compatible studies, using a systematic manipulation of assortment size and decision order, support the prediction.

The Effects of Regulatory Focus, Assortment Size, and Choice Mode on Consumer Choice of Financial Products

The Effects of Regulatory Focus, Assortment Size, and Choice Mode on Consumer Choice of Financial Products

An efficient algorithm for capacitated assortment planning with stochastic demand and substitution

The ever increasing product variety in grocery retailing is in conflict with the limited shelf space. Managing the assortment and regular order quantity for perishable and non-perishable products is therefore a core task for retailers. Retailers want to maximize profit by considering potential revenues, purchase costs, diminishing profits for products and opportunity costs for unfulfilled demand when determining assortment sizes and order volume to meet stochastic consumer demand.We considered a newsvendor-based decision model that jointly optimizes assortment size and the associated order volumes for listed items. The model considers out-of-assortment (OOA) and out-of-stock (OOS) substitution effects. The model is a structural equivalent to the model described in Kök and Fisher (2007) and solved there via a heuristic procedure. We develop an optimal solution procedure and a time-efficient heuristic that solves the model. The heuristic suggested is applicable for practically relevant, large-scale problem instances. Numerical tests reveal that the heuristic procedure produces close-to-optimal solutions and outperforms the Kök and Fisher heuristic with regard to both computational time and solution quality. A simulation study with discrete demand justifies our approach with using continuous demand distributions. The numerical analyses show that considering substitution effects in a decision-based model has a significant impact on the total profit and solution structure. Further managerial insights are presented with regard to assortment heterogeneity when shelf size, substitution and demand variability are varied.

Understanding business customer value in a retail environment: a scale development study

Our study has two primary objectives. First, we intend to contribute to the understanding of critical success factors retailers need to consider when aiming for the growing target group of business customers. To this end, we develop a new scale for measuring business customer value in a retail environment, based on a literature review and in-depth interviews with scholars and decision-makers from retail, wholesale and market research in Germany, Switzerland and the UK. Second, we examine the relative importance of the dimensions of business customer value through a combination of statistical techniques, such as exploratory factor analysis and confirmatory factor analysis. We determine that business customer value should be measured along seven dimensions. In descending order of relative importance, these are: conditional value, value of business services, value of personal care, value of assortment quality, value for money, value of assortment size and variety and emotional value. Retailers from different branches of trade, such as food, DIY, electronics or office supplies, are provided with strategic guidelines that will help attract business customers.

On search cost and the long tail: the moderating role of search cost

E-commerce researchers and managers have argued that long tail effects on pricing and product purchase are an important way in which Internet retail differs from traditional "brick & mortar" businesses. These effects have been attributed to several factors including increase assortment size and the reduction of search costs amongst others. While the Internet by its nature lowers search costs, its effect is not uniform. This study looks at that heterogeneity. Specifically, we investigate whether the role of reduced search costs in the long tail phenomenon is better conceptualized as a direct effect, or as a moderating effect. We contribute to the literature by combining the rationale from variety seeking behavior and need for uniqueness found in marketing with information systems research on search costs. Using consumer purchase information for over 16,000 purchases in a single product category, from over 4000 households, we perform a direct test of the impact of search costs on the Internet by comparing the product dispersion of purchases within homes with broadband service to those in homes with dial-up service. This study provides evidence that the conventional view that search costs directly impact consumer propensity to purchase a niche good can be improved by looking at search costs as an environmental condition which alters purchase behavior. Specifically, we find that search costs act primarily as a moderating factor for socio-economic status independent variables, altering the impact of classic consumer purchase factors.

The effect of shelf layout on satisfaction and perceived assortment size: An empirical assessment

This research compares the effect of different shelf visual layouts on decision satisfaction and perceptions of the retailer assortment, with a focus on how (e.g. vertically vs. horizontally) to display products rather than on how many products to display. The combined evidence from three experimental studies shows that displaying assortment breadth horizontally and depth vertically led participants to perceive a larger selection and to be more satisfied. Furthermore, linear displays increase decision satisfaction but decrease perceived assortment size and preference strength for the top brand, whereas visual layouts with the preferred brand in the central position increase decision satisfaction, make the assortment appear larger, and enhance preference strength for the top brand. The findings provide guidelines about how to organize products on the shelves and suggest that – even when actual assortment size is constant – consumer responses to the assortment depend from how the retailer displays the products.

The Effects of Need for Cognition and Assortment Size on Preference Consistency

The Effects of Need for Cognition and Assortment Size on Preference Consistency

Newsvendor pricing and assortment under Poisson decomposition

This article studies the structure of and the interdependence among the critical decisions on pricing, inventory, and assortment of a retailer’s product line. It considers substitutable retail products that are horizontally differentiated variants under a logit consumer choice model, within a newsvendor-type supply setting and homogeneous pricing. The focus of this article is on analyzing joint pricing and inventory decisions for a given assortment, within a natural Poisson decomposition setting, under a “multiplicative–additive” demand model, where both variance and coefficient of variation of the demand depend on the price. For this problem, a Taylor series-based approximation is developed for the inventory cost and its accuracy is subsequently demonstrated. It is then shown that, under this approximation, the expected profit is unimodal in the price, and sufficient conditions are provided for the “risky” price, at optimal inventory, to be above (or below) the “riskless” price, pertaining to a make-to-order system. It is also shown that inventory considerations alter the behavior of the risky price in demand and cost parameters. Furthermore, joint assortment and inventory decisions under exogenous pricing are considered, and the unimodularity of the expected profit in the assortment size is proven. Also, a comparative statics analysis is performed and insights are presented.

The Garment Industry Problems

Fashion industry is a multimillion industry. Garment industry is divided into the production of clothes and fashion products. It is focused on achieving optimal results concerning supplies, preparation, production and distribution of fashion products. It is characterized by development of fashion trends, brands, development of distributive network and stores and optimization of logistics from production to retail stores. Technical-technological development in the last forty years enabled garment industry to implement new methods and procedures and increase productivity while using new textiles and knitting. On that way the industry keeps up with more complex wishes of consumers, demands and fashion trends in the world. The most important tone concerning the rate of growth, design, fashion, utilization and size of assortment is given by centers of large consumption, i.e. the richest countries.

Positive affect moderates the impact of assortment size on choice satisfaction

The present research proposes that positive affect mitigates choice overload. Results from four studies show that whereas people in neutral affect feel less satisfied when choosing from a large relative to a small assortment, people in positive affect do not experience a decline in satisfaction and may even feel more satisfied when choosing from a large, relative to a small assortment. It is proposed that positive affect has these effects by shifting people's attention from the difficulty of the choice task to the quality of the assortment, as a basis for judgment of choice satisfaction.

Impact of treatment heterogeneity on drug resistance and supply chain costs

The efficacy of scarce drugs for many infectious diseases is threatened by the emergence and spread of resistance. Multiple studies show that available drugs should be used in a socially optimal way to contain drug resistance. This paper studies the tradeoff between risk of drug resistance and operational costs when using multiple drugs for a specific disease. Using a model for disease transmission and resistance spread, we show that treatment with multiple drugs, on a population level, results in better resistance-related health outcomes, but more interestingly, the marginal benefit decreases as the number of drugs used increases. We compare this benefit with the corresponding change in procurement and safety stock holding costs that result from higher drug variety in the supply chain. Using a large-scale simulation based on malaria transmission dynamics, we show that disease prevalence seems to be a less important factor when deciding the optimal width of drug assortment, compared to the duration of one episode of the disease and the price of the drug(s) used. Our analysis shows that under a wide variety of scenarios for disease prevalence and drug cost, it is optimal to simultaneously deploy multiple drugs in the population. If the drug price is high, large volume purchasing discounts are available, and disease prevalence is high, it may be optimal to use only one drug. Our model lends insights to policy makers into the socially optimal size of drug assortment for a given context.

Marketing Issues in Assigning Odd Prices by the Romanian Retailers

Odd prices are distinguished by their last digit just below a round number, the most frequent being ended in 9. This tactic is used especially in retailing, aimed to generate an underestimation of monetary sacrifice paid by the consumers. The exposure to odd prices conducts to specific characteristics of some psychological processes as: perception, representation, and memorization. Their effects are manifested on sales, on customer's buying intentions, on product image or on fairness perceptions. The present paper has analyzed odd prices assigned by six important electronics and appliance retailers that operate in Romanian market. The data collection was made by observation and the product categories studied were: TV-sets, hair dryers and mobile phones. The results shows that Romanian retailers use in a very great extend odd prices, not taking into account assortment size, brand image, product value or market share. They assign odd prices mainly of inertia, based on belief that this kind of prices increases sales in any conditions, such orientation being contradicted by previous academic studies.

Investing for Retirement: The Moderating Effect of Fund Assortment Size on the 1/N Heuristic

Does the number of funds offered in a defined contribution plan affect how many funds consumers choose to invest in or how they spread dollars across the funds they choose? Across three experiments and the analysis of defined contribution plan data, the authors explore these issues by examining investors' tendency to engage in the 1/n heuristic— that is, allocating their dollars evenly across all available investment options. The authors decompose this heuristic into its two underlying behavioral dimensions: the tendency to invest in all available funds (which they label “1/n#”) and the tendency to spread the invested dollars evenly across chosen funds (which they label “1/n$”). The authors argue that choosing from larger fund assortments taxes investors' cognitive resources, which leads to more simplified diversification strategies. They find that increasing the fund assortment size decreases the tendency to invest in all available funds (1/n#) but increases the tendency to spread the invested dollars evenly among the chosen alternatives (1/n$), provided that the number of funds chosen for investment allows for easy equal dollar allocations. The authors integrate their results with prior research regarding asset choice and allocation heuristics.

Choosing Here and Now versus There and Later: The Moderating Role of Psychological Distance on Assortment Size Preferences

Abstract Consumers prefer larger assortments, despite the negative consequences associated with choosing from these sets. This article examines the role of psychological distance (temporal and geographical) in consumers’ assortment size decisions and rectifies contradicting hypotheses produced by construal level theory. Six studies demonstrate that while consumers prefer larger assortments when the choice takes place in the here and now, they are more likely to prefer small assortments when choices pertain to distant locations and times. This decrease in preference for large assortments is due to psychological distance increasing the similarity of the options in a category, making them appear more substitutable. This effect of psychological distance reverses when consumers consider desirability/feasibility trade-off information inherent in the assortment size decision. These findings point to important outcomes of psychological distance, resolving opposing predictions of construal level theory, and identify boundary conditions for the well-established notion that consumers are attracted to large assortments.

The joint effects of choice assortment and regulatory focus on choice behavior

Past research presents contrasting views regarding the effect of assortment size on consumer decision making. Research has suggested that large assortments provide a diverse range of choices to consumers and thus increase their choice confidence levels and likelihood of making choices. Other research, however, has suggested that large assortments may have a negative impact on consumers' choice confidence and choice likelihoods because of cognitive load and anticipatory post-purchase regret. The current research aims to address these contrasting conclusions by examining the issue from the motivational goal perspective. Specifically, it is demonstrated that when consumers' regulatory orientations are promotion-focused, an increase in size of an alignable (non-alignable) assortment has a positive (negative) impact on their choice confidence levels and choice likelihood. In contrast, when consumers' regulatory orientations are prevention-focused, an increase in assortment size can have positive impacts on choice confidence levels and choice likelihood irrespective of whether the assortment is alignable or non-alignable. The findings are demonstrated in an experimental setting using a 2 (Consumer's self-regulatory focus: Promotion vs. Prevention)×2 (Assortment type: Alignable vs. Non-alignable)×4 (Size of assortment: 2 vs. 3 vs. 4 vs. 5) “between-subjects using an ANCOVA design” with “choice confidence” and “choice likelihood” being the dependent measures.

Investing for Retirement: The Moderating Effect of Fund Assortment Size on the 1/N Heuristic

Does the number of funds offered in your defined contribution plan affect how many funds you choose to invest in or how you spread dollars across the funds you choose? Across three experiments and the analysis of defined contribution plan data, we explore these issues by examining investors’ tendency to engage in the 1/n heuristic – allocating their dollars evenly across all available investment options (Benartzi and Thaler 2001). We decompose this heuristic into its two underlying behavioral dimensions: the tendency to invest in all available funds (which we label 1/n#) and the tendency to spread the invested dollars evenly across chosen funds (which we label 1/n$). We argue that choosing from larger fund assortments taxes investors’ cognitive resources, which leads to more simplified diversification strategies. We find that increasing the fund assortment size decreases the tendency to invest in all available funds (1/n#), but increases the tendency to spread the invested dollars evenly among the chosen alternatives (1/n$) – provided that the number of funds chosen for investment allows for easy equal dollar allocations. We integrate our results with prior research regarding asset choice and allocation heuristics.