  The purpose of this paper is to identify the immediate and future retailer
response to wholesale stockouts. We perform a statistical analysis of
historical customer order and delivery data of a local tool wholesaler and
distributor, whose customers are retailers, over a period of four years. We
investigate the effect of customer service on the order fill rate and the rate
of future demand, where the customer service is defined in terms of timely
delivery and the fill rate is defined as the fraction of the order that is
eventually materialized, i.e., is not cancelled following a stockout.We find
that for customers who order frequently, stockouts have an adverse effect on
the fill rate of their orders and on the frequency but not the value of their
future demand; however, this latter effect seems to be more short-term than
long-term. Practically all studies on the effects of stockouts measure
immediate reported/intended consumer purchase incidence and choice decision
behavior in response to stockouts in retail environments, mostly based on
surveys. This study looks at how stockouts affect future demand in a wholesale
environment, based on historical behavioral data analysis.
