This study examines human ordering behavior in service‐level inventory contracts, a class of contracts important in practice. Studies of wholesale price contracts find that people tend to place orders that are suboptimal and biased toward mean demand. Unlike wholesale price contracts,...

The ordering behavior of human decision makers under stochastic demand has been analyzed for various supply contracts. A consistent finding is that people place orders that both deviate from expected profit-maximizing quantities and exhibit high variability. We consider service level contracts,...

We analyze how performance metrics that contain the same information affect actual decisions. We consider two such metrics from inventory management, days of supply and inventory turn rate, where one is the inverse of the other. We argue that individuals tend to assess performance based on the...