Based on a simulation, the authors of "Newsvendor Demand Chasing Revisited"recommended using correlation of orders with lagged demand to measure chasing behavior. They concluded that measuring chasing with regression based on partial adjustment is prone to false positives. We show the purported false positives are due to autocorrelation and recommend using partial adjustment regression-based approaches to evaluate chasing.
All Science Journal Classification (ASJC) codes
- Strategy and Management
- Management Science and Operations Research