Behavioral Operations Management Research Articles

Internet of behaviors: conceptual model, practical and theoretical implications for supply chain and operations management

The Internet of Behaviours (IoB) is a network designed and used for replicating, understanding, predicting, and influencing human behaviour through data analytics. This study aims to advance our understanding of how the IoB will impact supply chain and operations management (SCOM). Based on a combination of the existing IoB frameworks with industrial Metaverse and digital supply chain twins, we propose a framework for IoB in SCOM encompassing management, organisation, and technology dimensions. We conclude that the IoB will impact a multitude of SCOM areas such as supply chain design, demand forecasting, sales and operations planning, distribution and transportation, inventory and production management, sourcing strategy and purchasing, vehicle routeing, supply chain resilience and sustainability. We offer a structured future research agenda pointing to new research questions and topics stemming from IoB-driven real-time visibility, data analytics, and remote control. Methodology of SCOM can also be enriched by the IoB through a combination of artificial intelligence and digital technology with operations research and behavioural operations management.

Trust Relationship with Suppliers, Collaborative Action, and Manufacturer Resilience in the COVID-19 Crisis.

Frequent emergencies highlight the importance of corporate resilience, and relationship governance behaviors have received much attention for improving firms' resilience. This study uses structural equation modeling to test hypotheses based on trust theory and synergy theory. It investigates the impact of the behavioral operations management approach of collaborative action on manufacturers' resilience in Chinese manufacturing firms during the COVID-19 pandemic. Environmental uncertainty is used as a moderating variable to explore its role between the trust relationship with suppliers and collaborative action, which are two types of relationship management behaviors. The results show that collaborative action positively affects each of the three stages of manufacturer resilience. Moreover, collaborative action mediates between the trust relationship with suppliers and the different dimensions of manufacturer resilience. Environmental uncertainty does not moderate the facilitative effect of the trust relationship with suppliers on collaborative action. This study examines the relational governance behavior of firms in the context of a particular Chinese culture to build a bridge between relational governance behavioral science and firm resilience management. This study tries to provide inspiration for managers to improve the risk management ability of manufacturing enterprises by using relationship management theory and behavioral science.

Pricing decisions for a social comparison product supply chain

As a natural psychological tendency of human beings, social comparison is pervasive among consumers. However, while plenty of literature studied the role of social comparison in affecting consumer psychology empirically, few focus on the problem of social comparison in supply chains. This paper proposes a modified utility model in which a consumer has an intrinsic and social value from the social-comparison products. Furthermore, the social value incorporates two different consumer psychologies from social comparison: the assimilate effect from upward comparison and the contrast effect from downward comparison. Based on this model, we derive the firm’s price decisions for a social-comparison product supply chain consisting of a manufacturer and a retailer under two cases, the centralized case and the decentralized case. We find several interesting patterns of consumers’ behavior in the presence of social comparison. We also find that when consumers are highly sensitive to social comparison, the supply chain can be coordinated spontaneously using a simple wholesale price contract. Moreover, even when consumers are not very sensitive to social comparison, the wholesale and retail prices in a decentralized supply chain will significantly reduce compared to those for non-social-comparison products — social comparison can mitigate the double marginalization effect. Also, we obtain some other interesting managerial insights. For instance, while social comparison always benefits the manufacturer, it benefits the retailer under certain conditions. This paper contributes to the behavioral operations management literature by first revealing a new mechanism that coordinates supply chains through consumer social comparison.

A framework for human-centered production planning and control in smart manufacturing

Smart manufacturing systems have to meet high performance expectations in form of customer individual products, short lead times, high due date reliability and resilience by the integration of new technologies and by intelligent process design. The planning and control of such smart manufacturing systems necessitates several instances of human decision-making. The latest research at the nexus of operations management and psychology reveals that human decision-making in such fast-paced, dynamic and complex environments is often biased, resulting in suboptimal operational performance. Human-centered design of planning and control processes can mitigate biased decisions, thus boosting performance in smart manufacturing systems. Current research is silent about the impact and mitigation of cognitive biases in operations management, though. We intend to close this research gap. We combine systematic reviews of literature on behavioral operations management and cognitive biases in operations management, particularly in production planning and control with an in-depth case study based on 12 expert interviews. We explore two decision-making models and combine them in a PPC framework. We create a framework for human-centered PPC in smart manufacturing systems, which includes the main impact factors, challenges and performance capabilities. Based on a detailed case study of a steel producer, we present a framework of human-centered PPC comprising five hypotheses on the impact of cognitive biases on human decision-making and on manufacturing performance.

Demand forecasts with judgement bias in a newsvendor problem

We explore the impact of judgement bias on demand forecast accuracy and profit to identify the driving force of decision-makers to be biased. We study the accuracy-maximising forecasts and the profit-maximising forecasts, which results in the least error of demand forecasts and minimum deviation from the optimal order decision, respectively. Under the assumption that period-to-period demand is independent over time, we find that both types of forecasts are biased. It implies that a newsvendor has the motivation to be biased to obtain either a more accurate demand forecast or a higher profit. Moreover, the decision error under the accuracy-maximising forecasts can be lower than that under unbiased demand forecasts and be bounded by twice of the error under profit-maximising forecasts. It suggests that the biased accuracy-maximising forecasts can perform satisfactorily in both forecasts and decisions. We further relax the assumption of independent demand by considering correlated and trended demand processes, and show the robustness of the positive impact of judgement bias. We then propose a method to solve pure data-driven newsvendor problem and examine its performance with empirical evidence. Our paper contributes to the literature on behavioural operations management by investigating the rationality of judgement bias and its implications.

Rationally trust, but emotionally? The roles of cognitive and affective trust in laypeople's acceptance of AI for preventive care operations

AbstractArtificial intelligence (AI) is transforming healthcare operations. Nevertheless, particularly in the context of preventive care, little is known about how laypeople perceive and accept AI and change their behavior accordingly. Grounded in a solid theoretical framework of trust, this study bridges this gap by exploring individuals’ acceptance of AI‐based preventive health interventions and following health behavior change, which is critical for preventive care providers’ operational and business performance. Through a randomized field experiment with 15,000 users of a mobile health app complemented by a survey, we first show that the use and disclosure of AI in preventive health interventions improve their effectiveness. However, individuals are less likely to accept and achieve the health behavior change suggested by AI than when they receive similar interventions from health experts. We also observe that the effectiveness of AI‐based interventions can be improved by combining them with human expert opinions, increasing their algorithmic transparency, or emphasizing their genuine care and warmth. These results collectively suggest that, different from conventional technologies, AI's deficient affective trust, rather than comparable cognitive trust, play a decisive role in the acceptance of AI‐based preventive health interventions. This study sheds light on the literature on the role of new‐age information technologies in behavioral operations management, consumer marketing, and healthcare as well as the role of trust in technology acceptance. Valuable practical implications for more effective management of AI for preventive care operations and promotion of consumers’ health behavior are also provided.

The impact of corporate support programs on environmental and social innovation: empirical insights from the food and beverage industry

PurposeThe purpose of this paper is to analyze the influence of corporate support programs on managers' environmental and social innovation behaviors. To offer a more comprehensive understanding of these relationships, the moderating role of technological reflectiveness and business moral values is also accounted for.Design/methodology/approachA scenario-based experimental study to test the impact of corporate support programs on environmental and social innovation behaviors is also adopted. After running a pretest to verify the effectiveness of alternative scenarios through 100 respondents with managerial experience residing in the UK and EU countries, we collected data from a sample of 220 senior managers of firms from the Australian food and beverage industry for the main study. One-way analysis of variance (ANOVA) with Dunnett's test to investigate direct relationships and the PROCESS Model to test the moderating role of technological reflectiveness and business moral values were used.FindingsThe findings reveal time provision, budget provision and advice provision as salient forms of corporate support programs that positively impact managers' environmental and social innovation behaviors. It is found that technological reflectiveness positively moderates the link between time provision and managers' social innovation behavior and negatively moderates the link between advice provision and managers' social innovation behavior. Furthermore, it is found that business moral values positively moderate the relationships between time and budget provisions and managers' environmental innovation behavior and between budget and advice provisions and managers' social innovation behavior.Originality/valueThe authors contribute to innovation and operations management research by adopting a behavioral operations management perspective and empirically analyzing the influences of managers' technological reflectiveness and business moral values on the relationship between organizational corporate support programs and managers' environmental and social innovation behavior in the context of the food and beverage industry.

Rising to the Top: Motivational Forces Influencing Status Conflict in Sourcing Teams

Organizations often use cross‐functional teams to make key Operations and Supply Chain Management decisions, but doing so risks instigating conflict between team members since cross‐functional delegates often have opposing functional goals. While previous work has explored the effect of functional goals (i.e., external motivation) in cross‐functional team performance, we extend research in this area to incorporate individual team members' psychological needs (i.e., internal motivation). Specifically, we consider how the interplay of these motivational mechanisms can lead to status conflict within the team, and the ensuing implications on team performance. We conduct an experiment of 136 ad hoc team‐based sourcing decisions, complemented with a sequential qualitative study involving interviews with 37 practicing managers. The results show that functional goal misalignment leads to status conflict, as expected. Yet, counterintuitively, this effect can be mitigated with the team's composition in individual psychological needs for dominance, specifically with heterogeneously dominant individuals. Our study contributes to the behavioral operations management literature on sourcing teams and to the team motivation literature. We provide guidance on how managers can compose cross‐functional teams to improve decision outcomes considering the interplay of external and internal motivational mechanisms.

Why Are Minimum Order Quantity Contracts Popular in Practice? A Behavioral Investigation

Problem definition: In theory, all coordinating contracts are equivalent; however, the minimum order quantity (MOQ) contract is observed to be more popular in practice. We seek to understand whether decision makers as suppliers can perform better with the MOQ contract and, if so, why. We also study whether MOQ is indeed the preferred contract when subjects are allowed to choose among coordinating contracts. Academic/practical relevance: The behavioral operations management literature has established a trade-off between complex coordinating and simple noncoordinating contracts. This paper fills a gap in the literature by studying whether and how the coordinating MOQ contract attenuates this trade-off. Methodology: First, we test whether subjects in the role of suppliers given only a single contract type can optimize its parameters. Second, we introduce treatments where the coordinating contracts subject to demand risk are hedged such that risk is eliminated. Third, we repeat two of the initial sets of treatments with a cognitive load survey and introduce single-variable versions of those treatments to reduce cognitive burden. Fourth, we introduce a novel experimental design where, in each period, subjects choose both the type of contract to offer and the parameters of that contract. Results: We find that (i) subjects perform significantly better with the MOQ contract compared with other coordinating contracts; (ii) this can be attributed to the risk inherent in and cognitive burden induced by those contracts; and (iii) subjects choose the MOQ contract more frequently over theoretically equivalent coordinating contracts. Managerial implications: We show that the trade-off between efficiency and complexity can be mitigated by simpler yet efficient contracts. Hence, there is considerable benefit to identifying contractual mechanisms that ameliorate the adverse effects of complexity. This explains the prevalence of MOQ terms in supply contracts.

Behavioral operations management and supply chain coordination mechanisms: a systematic review and classification of the literature

PurposeThe recent surge in behavioral studies on the coordination mechanisms in supply chains (SCs) and advanced methods highlights the role of SC coordination (SCC) and behavioral issues associated with improving the performance of the operations. This study aims to critically review the behavioral aspect of channel coordination mechanisms.Design/methodology/approachFollowing a systematic literature review methodology, the authors adopt a combination of bibliometric (to reflect the current state of the field), content (using Leximancer data mining software to develop thematic maps) and theory-oriented qualitative analyzes that provide a holistic conceptual framework to unify the literature’s critical concepts.FindingsThe analysis confirms the plethora of risk-oriented publications, demonstrating that the second largest category of studies is concerned with social preferences theory. Most studies were based on experiments, followed by analytical modeling, revealing the impact of heuristics and individual preferences in SC decisions and suggesting promising managerial and theoretical avenues for future research.Originality/valueThe study sheds light on behavioral decision theories applied to SC coordination by categorizing the literature based on the adopted theories. The methodological contributions include using automated content analysis and validating the outcome by interviewing leading scholars conducting active research on “behavioral operations management and SC contracts.” The authors also propose several directions for future research based on the research gaps.

Inventory decision-making biases: a review and suggestions for future research

PurposeThe paper provides a comprehensive overview of the biases in inventory decisions, under the umbrella of behavioural operations, considering research findings that used experimental methods. Research in this field has gained traction but, to the best of our knowledge, review articles that summarize these research findings are scarce. Hence, there is a need to synthesize the anomalies and biases reported in inventory decision-making literature to gain a more integrated understanding.Design/methodology/approachThis study reviews themes relevant to inventory and behavioural operations management from the articles published in recognized top-tier journals during the period between 2000 and 2020 with an aim to build a classification framework. Further, using a systematic review procedure, the relevant research studies are divided into sub-sections and appropriate search strategies are adopted to pleat more information on inventory ordering biases.FindingsThis study presents a classification framework by highlighting the factors influencing the biases in inventory decisions and describes the effects of utility preferences on the decision-making behaviour. It highlights the inventory ordering pattern under unconventional settings and also for different supply chain settings. This systematic review helps in identifying the research gap and in giving directions for future researchers.Originality/valueThe study presents a systematic review and detailed analysis of the research in inventory decision making through a behavioural lens. The study shows a clear direction of progress over the years, and implies new directions for looking beyond placing orders and for moving towards a more integrated approach while making supply chain decisions. It will be useful for researchers and practitioners working on newsvendor decisions, supply chain contracts, behavioural economics, behavioural operations management, bounded rationality theory and experimental economics.

An empirical analysis of suppliers' trade-off behaviour in adopting digital supply chain financing solutions

PurposeReverse factoring (RF)–a form of supply chain finance (SCF)–is widely recognised as a win-win for both buyers and suppliers. Still, there is evidence that suppliers are often hesitant to join RF programmes initiated by their buyers. This study advances our understanding of how suppliers assess the importance of various attributes of a buyer's offer to join RF and discusses the role of programme configuration and digital technology in overcoming impediments to RF adoption.Design/methodology/approachUsing a choice-based conjoint experimental design validated by experts, we isolate and manipulate the main attributes of a RF programme offer. This enables us to estimate the attributes' importance and to examine suppliers' trade-off behaviour. The authors complement the experimental study with content analysis of respondents' comments.FindingsThis study reveals the importance of behavioural considerations in RF adoption. The main findings are (1) suppliers are willing to reject offers that they perceive to be unfair even if these offers benefit them financially, (2) suppliers are willing to trade-off their financial benefit for non-financial reasons–most notably attributes that relate to trustworthiness of the buyer–and (3) suppliers expect technologies to increase transparency and reduce variability in trade processes.Research limitations/implicationsNon-financial attributes that influence supplier perception need to be considered in the programme configuration. Technologies that reduce information asymmetry, increase trust and transparency, increase the speed of execution and reduce process inefficiencies will have a positive impact on RF offer acceptance.Originality/valueThis research opens new lines of inquiry on the role of digital technologies in influencing behavioural operations management specifically suppliers' adoption of digital SCF solutions.

Learning effects and mental fatigue of forklift operators in food retail logistics: An empirical analysis through the lens of behavioral operations management

Even though the ongoing digital transformation in the forms of artificial intelligence and robotics offer promising concepts on automating warehouse operations, a majority of processes in intralogistics rely on manual human work. Since order picking has been identified as the most labour-intensive, as well as costly activity in warehouses, forklift operators receive significantly less attention in research. To shed light on the cognitive aspects of forklift operators, this paper aspires to quantify the learning process for n = 5 forklift operators and mental fatigue effects for another n = 5 operators in a retail warehouse for cooled and perishable items. Our results indicate that learning, as well as fatigue effects, can be observed in this field of operations and are measurable through a multivariable parametric approach.

The role of motivation in the results of total productive maintenance

Abstract Paper aims The aim is to analyze the role of motivation of work teams in production lines in the operational results obtained with the implementation of a Total Productive Maintenance (TPM) program in a single company. Originality The areas of industrial production and maintenance require that human factors influencing performance be continuously investigated and cannot focus exclusively on the reliability of equipment and systems. Studies that contemplate these factors are relatively scarce but of great value for companies and society. Research method This is an exploratory case study that used a measurement of motivation with two teams of employees who participated in the implementation of TPM, comparing it to measures of operational performance. Unstructured interviews and nonparticipant observation were also used for data collection. Main findings The level of motivation of the team was positively associated with a change in operational performance, and the implementation of TPM had a positive impact on performance. Implications for theory and practice This study contributes to the behavioral operations management literature by showing empirical evidence that operational results may depend on motivated workers during TPM implementation. Managers must pay attention to the factors that determine the motivation of work teams when implementing improvement programs.

연속조사 재고정책하에서 소매업체 행동 편향 정보를 활용한 최적 재고관리 방안

We consider a supply chain consisting of one warehouse and multiple retailers under a continuous review policy. In this setting, warehouse inventory management utilizing real-time inventory information of retailers has been an important topic. Recent progress in behavioral operations management suggests that the reorder decisions of retailers may deviate from optimal decisions due to behavioral bias. Thus, incorporating human decision bias in deriving the reorder decisions of retailers is crucial in the inventory management of warehouses. In this study, we propose a behavioral order risk model to determine optimal reorder timing considering the behavioral bias of decision-makers. We consider two types of behavioral bias: ex-post inventory error and loss aversion. Through behavioral experiments and computer simulation, we show that a cost reduction of 24.9% can be achieved by considering the behavioral bias of retailers in the inventory management of warehouses.

An experimental investigation of newsvendor decisions under ambiguity

ABSTRACT The literature on decision biases in the newsvendor model assumes classical version of the problem where the distribution of random demand is known. This context is decision-making under risk. In many real-life settings, firms are not able to elicit complete and exact information about the demand distribution. This results in decision-making under ambiguity. We examine the newsvendor ordering preferences under ambiguity. Our study is the first attempt in behavioural operations management research to examine the biases in newsvendor decisions under ambiguity. We design experiments to understand the ordering preferences under ambiguity and risk. The experimental results show that subjects deviate from the normative benchmarks. We observe ‘pull-to-center’ bias in newsvendor decisions under ambiguity. We also observe that subjects exhibit ‘asymmetry in ordering’. Both these biases have significant implications for both theory and practice. Our research is a building block for research in a variety of normative models in operations management literature where ambiguity in demand is a highly relevant context for decision-making.

The Behavioral Investigation of Industry 4.0 Concept: A Research On Twitter


 
 
 
 Abstract:
 Aim: This paper is going to investigate how Industry 4.0 concept especially the components of it, behaves in social networks and the context of this innovative approach find a place in time in means of content and sentiment comprising.
 Design / Research methods: Expeditious progress in industrialization and information techniques has made great advancement in developing the next span of production technology. Industry 4.0 is an imperative action where the intention is the alteration of modern production through digitalization and profiteering of the capabilities of new advancements. Today, the absence of powerful appliances still feigns a significant impediment for utilizing the ample potential of Industry 4.0. Notably, behavioral approaches are essential for understanding Industry 4.0, which professes novel trials. This paper briefly surveys the area of Industry 4.0 as it relates to behavioral operations by using sentiment analysis and social network analysis methods and tools by describing features of the relationship network either through numerical and visual representation
 Conclusions / findings: First of all, it should be presumed that the name Industry 4.0 describes various, fundamentally internet-based developments in manufacturing operations. These advancements do not only have technological but moreover accomplished organizational engagements. Appropriately, a shift from product to service orientation is assumed. Following, the introduction of novel varieties of businesses can be envisioned which embraces new particular functions within the production process sequentially the value-creation networks.
 Originality / value of the article: Within the context of the current state of the art in operations management literature, this paper fulfills the gap between behavioral operations and industry 4.0 context for the researchers both in operations management and behavioral sciences will benefit from this analysis.
 
 
 
 
 Keywords: Behavioral Operations Management, Sentiment Analysis, Industry 4.0, Social Network Analysis. 
 JEL: C88, D23, D24, E71, M11, O14, O33
 
 
 

Inventory and ordering decisions: a systematic review on research driven through behavioral experiments

PurposeThe success of a supply chain is highly reliant on effective inventory and ordering decisions. This paper systematically reviews and analyzes the literature on inventory ordering decisions conducted using behavioral experiments to inform the state-of-the-art.Design/methodology/approachThis paper presents the first systematic review of this literature. We systematically identify a body of 101 papers from an initial pool of over 12,000.FindingsExtant literature and industry observations posit that decision makers often deviate from optimal ordering behavior prescribed by the quantitative models. Such deviations are often accompanied by excessive inventory costs and/or lost sales. Understanding how humans make inventory decisions is paramount to minimize the associated consequences. To address this, the field of behavioral operations management has produced a rich body of research on inventory decision-making using behavioral experiments. Our analysis identifies primary research clusters, summarizes key learnings and highlights opportunities for future research in this critical decision-making area.Practical implicationsThe findings will have a significant impact on future research on behavioral inventory ordering decisions while informing practitioners to reach better ordering decisions.Originality/valuePrevious systematic reviews have explored behavioral operations broadly or its subdisciplines such as judgmental forecasting. This paper presents a systematic review that specifically investigates the state-of-the-art of inventory ordering decisions using behavioral experiments.

Behavioral perspective of newsvendor ordering decisions: review, analysis and insights

PurposeThe traditional newsvendor model has focused on deriving the optimal order quantity that minimises the balance between stocking too much or too less number of products. However, the managers make inventory decisions based on intuitions and shortcuts, which may involve human errors and biases. The effect of cognitive biases and heuristics influencing the inventory ordering decisions in newsvendor settings is highlighted. The advancement of research associated to the newsvendor biases is reviewed to appreciate the behavioral aspects of the minds underlying this process.Design/methodology/approachThe use of experimental and non-experimental methods to investigate the ordering behaviour of newsvendors is described and we present a framework of the existing literature and highlight the research gaps to point to future research possibilities and priorities.FindingsThe proposed framework gives a systematic approach to confirm the existence of a substantial scope of research opportunities and points to specific areas for further research. It synthesizes the existing results of behavioral newsvendor research and will act as a key reference paper. In addition, it will help the practitioners and software tool vendors to comprehend the behavioral perspective of newsvendor preferences and design strategies to mitigate this effect. The insights will be helpful for academicians, researchers and practitioners working in the areas of experimental economics, behavioral economics, behavioral operations, bounded rationality theory, newsvendor modelling and supply chain contracts.Originality/valueA summary of literature in this evolving area of research is very scarce. Considering the impact of behavioral economics on managerial decisions in the contemporary world, it is highly important to have an educational summary which can act as a tool for the practitioners and researchers in the area of behavioral operations management.

The impact of social media signals on supplier selection: insights from two experiments

PurposeOnline B2B markets offer buyers a new source of information provided by social media signals about suppliers. These signals have not yet received much attention in the supplier selection literature. This study advances our understanding of how buyers respond to social media signals in the supplier selection process.Design/methodology/approachWe develop a choice-based conjoint experimental design to isolate and manipulate two signals from social media: volume (the number of ratings) and valence (average evaluation of the ratings). We test how these signals are interpreted in the context of varying deal sizes and price points.FindingsBoth volume and valence are positively correlated with supplier selection. However, (1) the signals exhibit diminishing returns and (2) the efficacy of valence is interpreted in the context of volume. We also find that (3) there is no influence of the deal size and that (4) the relationships between signals and supplier selection are negatively moderated by deviations from the reference price.Research limitations/implicationsSocial media signals should be considered in supplier selection decisions as they convey valuable information to the buyer. However, signals go through a process of interpretation which has implications for buyers, suppliers, and owners of online B2B markets.Originality/valueOur research opens new lines of inquiry in behavioural operations management research regarding the mechanisms by which buyers interpret social media signals and how these ultimately influence their choice.