Timing of the Effects: A Dynamic Analysis of Pack-Size Variety, Demand and Cost

Abstract

As an importation logistics factor, pack-size variety (the number of different pack-sizes, such as packs of 6 units and 12 units of products) is involved in a dynamic system. This system includes the forward impacts of the present pack-size variety on the present demand and the present cost, as well as the reverse influences of past demand and past cost on present pack-size variety decisions. Any static analysis of this system misses an important factor of these effects: the timing. In this study, we unveil the timing of these dynamic relationships among pack-size variety, demand, and cost. Our findings suggest that the effect of past demand on present pack-size variety follows a short-delayed and long-lasting pattern, while the effect of past cost on present pack-size variety follows a long-delayed and short-lasting pattern. These findings offer important implications for pack-size variety decisions in industrial practices.

Keywords: Pack-Size Variety, Timing Effect, Cost, Dynamic Analysis