Purpose: Slotting is one of the main operations in warehouse management. It is based on the efficient allocation of slots for stock-keeping units (SKUs). Order picking and slotting represent a high percentage of total logistics costs; therefore, improving these activities leads to significant...

The paper shows that taking inventory control out of the hands of retailers and assigning it to an intermediary increases the value of a supply chain when demand volatility is high. This is because an intermediary can help solve two incentive problems associated with retailers' inventory control...