A Review and Analysis of Service Level Agreements and Chargebacks in the Retail Industry

Purpose: This study examines service level agreements (SLAs) in the retail industry and uses empirical data to draw conclusions on relationships between SLA parameters and retailer financial performance. Design/methodology/approach: Based on prior SLA theories, hypotheses about the impacts of SLA confidentiality, choice of chargeback mechanisms, and chargeback penalty on retailer inventory turnover are tested. Findings: Retailer inventory turnover could vary by the level of SLA confidentiality, and the variation of retailer inventory turnovers could be explained by chargeback penalty. Research limitations/implications – The research findings may not be readily applicable to SLAs outside of the retail industry. Also, most conclusions were drawn from publicly available SLAs. Practical implications: The significant relationships between SLA parameters and retailer inventory turnover imply that a retailer could improve its financial performance by leveraging its SLA design. Originality/value: Not only does this study contribute to the understanding of retail SLA design in practice, but it also extends prior theories by investigating the implications of SLA design on retailer inventory turnover

Shipment sizing for autonomous trucks of road freight

Unprecedented endeavors have been made to take autonomous trucks to the open road. This study aims to provide relevant information on autonomous truck technology and to help logistics managers gain insight into assessing optimal shipment sizes for autonomous trucks. Empirical data of estimated autonomous truck costs is collected to help revise classic, conceptual models of assessing optimal shipment sizes. Numerical experiments are conducted to illustrate the optimal shipment size when varying the autonomous truck technology cost and transportation lead time reduction. Autonomous truck technology can cost as much as 70% of the price of a truck. Logistics managers using classic models that disregard the additional cost could underestimate the optimal shipment size for autonomous trucks. This study also predicts the possibility of inventory centralization in the supply chain network. The findings are based on information collected from trade articles and academic journals in the domain of logistics management. Other technical or engineering discussions on autonomous trucks are not included in the literature review. Logistics managers must consider the latest cost information when deciding on shipment sizes of road freight for autonomous trucks. When the economies of scale in autonomous technology prevail, the classic economic order quantity solution might again suffice as a good approximation for optimal shipment size. This study shows that some models in the literature might no longer be applicable after the introduction of autonomous trucks. We also develop a new cost expression that is a function of the lead time reduction by adopting autonomous trucks