Identifying the underlying structure of demand during promotions: a structural equation modelling approach
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Issue Date
2011-05Subjects
demand-factor modelstructural equation modelling
information exchange
supply chain collaboration
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It is widely recognized that promotions enhance product sales. Other factors such as seasonality, special days, customer preferences and economic factors may also have an impact on demand. Yet, endeavours to model the dependency of demand on various factors are scarce. We develop a conceptual demand-factor model to represent the dependency of demand on these factors. We examine and validate the conceptual model through structural equation modelling, using sales data of a leading soft drink company involved in supply chain collaboration with downstream retailers. We find that promotional and seasonal factors have a large and direct impact on sales, while special days like festivals and bank holidays have limited influence. Our approach is versatile and can assist demand planners in understanding the demand during promotional events, and in the planning and execution of promotional deals.Citation
Identifying the underlying structure of demand during promotions: A structural equation modelling approach 2011, 38 (5):5544-5552 Expert Systems with ApplicationsPublisher
ElsevierJournal
Expert Systems with ApplicationsAdditional Links
http://linkinghub.elsevier.com/retrieve/pii/S0957417410012261Type
ArticleLanguage
enISSN
09574174ae974a485f413a2113503eed53cd6c53
10.1016/j.eswa.2010.10.082