Gone Today, Here Tomorrow: Behavioral Causes of Product Returns in the Agribusiness Industry

摘要

Hybrid seed suppliers experience excessive and costly rates of seed returns from dealers, who order inadvance of grower demand realization and may return unsold seeds at the end of the season. Here wedevelop a formal dynamic model of the interaction of sales effort allocation and dealer hoarding behaviorto understand the dynamics of corn seed returns through a model-based field study. Sales representativesknow they should carefully gather information on grower demand for seed types and quantities toimprove their demand forecast (positioning effort). However, they abandon time-consuming seedpositioning late in the sales cycle to push out dealers' inflated orders and quickly meet revenue quotas.Such push effort leads to excessive returns in the next period, generating more inflated orders by dealersand increasing the total sales that agents must achieve to meet their quota, requiring them to push stillmore seed. Depending on the availability of sales resources, this biased sales effort allocation cangenerate a self-perpetuating stream of returns. Our analysis highlights the importance of adequatelymanaging sales resources to ensure desired system performance while maintaining system robustness.