Cost estimation accuracy in supply chain design: The role of decision-making complexity and management attention

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Purpose: The purpose of this paper is to investigate how management attention and supply chain complexity affect the decision-making process and cost estimation accuracy of supply chain design (SCD) decisions. Design/methodology/approach: The research follows an embedded case study design. Through the lens of the behavioural theory of the firm, the SCD decision process and realised outcomes are investigated through longitudinal data collection across ten embedded cases with varying degrees of supply chain decision-making complexity and management attention. Findings: The findings suggest that as supply chain decision-making complexity increases, cost estimation accuracy decreases. The extent to which supply chain decision-making complexity is readily recognised influences the selection of strategies for information search and analysis and, thus, impacts resulting cost estimation errors. The paper further shows the importance of management attention for cost estimation accuracy, especially management attention based on conflicting goals induce behaviours that improve estimation ability. Research limitations/implications: A framework proposing a balance between supply chain decision-making complexity and management attention in SCD decisions is proposed. However, as an embedded case study the research would benefit from replication to externally validate results. Originality/value: The method used in this study can identify how supply chain complexity is related to cost estimation errors and how management attention is associated with behaviours that improve cost estimation accuracy, indicating the importance of management attention in complex supply chain decision-making.

Original languageEnglish
JournalInternational Journal of Physical Distribution & Logistics Management
Volume48
Issue number10
Pages (from-to)995-1019
ISSN0960-0035
DOIs
Publication statusPublished - 2018

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Supply chains
Decision making
supply
decision making
costs
management
Costs
Error analysis
Supply chain design
Supply chain
Cost estimation
decision-making process
Lenses
firm
methodology
ability
Values

Cite this

@article{270b90dea49c441a9be07ddc2e7a74ef,
title = "Cost estimation accuracy in supply chain design: The role of decision-making complexity and management attention",
abstract = "Purpose: The purpose of this paper is to investigate how management attention and supply chain complexity affect the decision-making process and cost estimation accuracy of supply chain design (SCD) decisions. Design/methodology/approach: The research follows an embedded case study design. Through the lens of the behavioural theory of the firm, the SCD decision process and realised outcomes are investigated through longitudinal data collection across ten embedded cases with varying degrees of supply chain decision-making complexity and management attention. Findings: The findings suggest that as supply chain decision-making complexity increases, cost estimation accuracy decreases. The extent to which supply chain decision-making complexity is readily recognised influences the selection of strategies for information search and analysis and, thus, impacts resulting cost estimation errors. The paper further shows the importance of management attention for cost estimation accuracy, especially management attention based on conflicting goals induce behaviours that improve estimation ability. Research limitations/implications: A framework proposing a balance between supply chain decision-making complexity and management attention in SCD decisions is proposed. However, as an embedded case study the research would benefit from replication to externally validate results. Originality/value: The method used in this study can identify how supply chain complexity is related to cost estimation errors and how management attention is associated with behaviours that improve cost estimation accuracy, indicating the importance of management attention in complex supply chain decision-making.",
author = "Asmussen, {Jesper Norman} and Jesper Kristensen and W{\ae}hrens, {Brian Vejrum}",
year = "2018",
doi = "10.1108/IJPDLM-07-2018-0268",
language = "English",
volume = "48",
pages = "995--1019",
journal = "International Journal of Physical Distribution & Logistics Management",
issn = "0960-0035",
publisher = "JAI Press",
number = "10",

}

TY - JOUR

T1 - Cost estimation accuracy in supply chain design

T2 - The role of decision-making complexity and management attention

AU - Asmussen, Jesper Norman

AU - Kristensen, Jesper

AU - Wæhrens, Brian Vejrum

PY - 2018

Y1 - 2018

N2 - Purpose: The purpose of this paper is to investigate how management attention and supply chain complexity affect the decision-making process and cost estimation accuracy of supply chain design (SCD) decisions. Design/methodology/approach: The research follows an embedded case study design. Through the lens of the behavioural theory of the firm, the SCD decision process and realised outcomes are investigated through longitudinal data collection across ten embedded cases with varying degrees of supply chain decision-making complexity and management attention. Findings: The findings suggest that as supply chain decision-making complexity increases, cost estimation accuracy decreases. The extent to which supply chain decision-making complexity is readily recognised influences the selection of strategies for information search and analysis and, thus, impacts resulting cost estimation errors. The paper further shows the importance of management attention for cost estimation accuracy, especially management attention based on conflicting goals induce behaviours that improve estimation ability. Research limitations/implications: A framework proposing a balance between supply chain decision-making complexity and management attention in SCD decisions is proposed. However, as an embedded case study the research would benefit from replication to externally validate results. Originality/value: The method used in this study can identify how supply chain complexity is related to cost estimation errors and how management attention is associated with behaviours that improve cost estimation accuracy, indicating the importance of management attention in complex supply chain decision-making.

AB - Purpose: The purpose of this paper is to investigate how management attention and supply chain complexity affect the decision-making process and cost estimation accuracy of supply chain design (SCD) decisions. Design/methodology/approach: The research follows an embedded case study design. Through the lens of the behavioural theory of the firm, the SCD decision process and realised outcomes are investigated through longitudinal data collection across ten embedded cases with varying degrees of supply chain decision-making complexity and management attention. Findings: The findings suggest that as supply chain decision-making complexity increases, cost estimation accuracy decreases. The extent to which supply chain decision-making complexity is readily recognised influences the selection of strategies for information search and analysis and, thus, impacts resulting cost estimation errors. The paper further shows the importance of management attention for cost estimation accuracy, especially management attention based on conflicting goals induce behaviours that improve estimation ability. Research limitations/implications: A framework proposing a balance between supply chain decision-making complexity and management attention in SCD decisions is proposed. However, as an embedded case study the research would benefit from replication to externally validate results. Originality/value: The method used in this study can identify how supply chain complexity is related to cost estimation errors and how management attention is associated with behaviours that improve cost estimation accuracy, indicating the importance of management attention in complex supply chain decision-making.

U2 - 10.1108/IJPDLM-07-2018-0268

DO - 10.1108/IJPDLM-07-2018-0268

M3 - Journal article

VL - 48

SP - 995

EP - 1019

JO - International Journal of Physical Distribution & Logistics Management

JF - International Journal of Physical Distribution & Logistics Management

SN - 0960-0035

IS - 10

ER -