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    Identifying the underlying structure of demand during promotions: a structural equation modelling approach

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    Authors
    Ramanathan, Usha
    Muyldermans, Luc
    Issue Date
    2011-05
    Subjects
    demand-factor model
    structural equation modelling
    information exchange
    supply chain collaboration
    
    Metadata
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    Abstract
    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 Applications
    Publisher
    Elsevier
    Journal
    Expert Systems with Applications
    URI
    http://hdl.handle.net/10547/251121
    DOI
    10.1016/j.eswa.2010.10.082
    Additional Links
    http://linkinghub.elsevier.com/retrieve/pii/S0957417410012261
    Type
    Article
    Language
    en
    ISSN
    09574174
    ae974a485f413a2113503eed53cd6c53
    10.1016/j.eswa.2010.10.082
    Scopus Count
    Collections
    Business and Information Systems Research Centre (BISC)

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