A Multi-Method Investigation of Overordering Behavior in Supply Chains

摘要

Misperception of feedback (MOF) hypothesis, a central theory in dynamic decision making, posits that decision makers are incapable of being cognizant of feedback delays and underweight the supply line of inventories and capacities. This paper reconsiders this assumption. Field studies of manufacturing supply chains in India revealed an alternative mechanism of overordering, which I call supply line discounting. The weak institutional structures, capacity shortages, and polychronic cultures that characterize emerging economies engender deliberate order inflation by buyers, which triggers supply line discounting and undersupply by suppliers. An eye tracking experiment helps flesh out and validate this behavior.