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Activity Number:
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314
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Type:
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Invited
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Date/Time:
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Tuesday, July 31, 2007 : 2:00 PM to 3:50 PM
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Sponsor:
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Section on Statistics and Marketing
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| Abstract - #307866 |
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Title:
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Deconstructing Each Item's Category Contribution
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Author(s):
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Sharad Borle*+ and Peter Boatwright and Kirthi Kalyanam
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Companies:
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Rice University and Carnegie Mellon University and Santa Clara University
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Address:
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Jones Graduate School of Management, Houston, TX, 77005,
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Keywords:
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Apparel Retailing ; Retail assortment ; Category Management ; out-of-stocks ; hierarchical Bayes ; COM-Poisson
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Abstract:
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This paper provides an empirical study of the role of every item in an assortment. Our results show many items affect category sales over and above their own sales volume. After deconstructing the role of a stockout of individual items into three effects, lost own sales, substitution to other items, and the category sales impact, we find that the category impact has the largest magnitude. Interestingly almost every single individual item affects category sales (it is not restricted to top selling items); variety indeed is the price of entry in retailing. Our results support recent findings that more frequently purchased categories are less adversely affected by reductions in assortment. We also find that the assortment appears to gain attractiveness when certain items are out of stock, a result that is consistent with the discussion in the literature concerning category clutter.
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