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Publications
  • 2022
  • Working Paper

Human-Computer Interactions in Demand Forecasting and Labor Scheduling Decisions

By: Caleb Kwon, Ananth Raman and Jorge Tamayo
  • Format:Print
  • | Language:English
  • | Pages:39
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Abstract

We empirically analyze how managerial overrides to a commercial algorithm that forecasts demand and schedules labor affect store performance. We analyze administrative data from a large grocery retailer that utilizes a commercial algorithm to forecast demand and schedule labor across all their stores. In total, this data encompasses 29 million shifts covering 50,000 employees in more than 500 stores, totaling more than 800,000 store-date observations. Using an instrumental variables strategy that exploits exogenous events where the algorithm requires human intervention, we find that managerial overrides made to aggregate labor minutes and employee teams increase store performance. We make the broader point that exercising discretion based on private knowledge about demand and employee relationships is one channel by which managers add value to their stores.

Keywords

Employees; Human Capital; Performance; Applications and Software; Management Skills; Management Practices and Processes; Retail Industry

Citation

Kwon, Caleb, Ananth Raman, and Jorge Tamayo. "Human-Computer Interactions in Demand Forecasting and Labor Scheduling Decisions." Working Paper, December 2022.
  • SSRN

About The Authors

Ananth Raman

Technology and Operations Management
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Jorge Tamayo

Strategy
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More from the Authors

    • 2023
    • Faculty Research

    The Effects of Fair Workweek Laws on Store Performance: Evidence from Chicago

    By: Caleb Kwon and Ananth Raman
    • December 2022
    • Faculty Research

    Hamptonshire Gas and Convenience

    By: Ananth Raman, Nathan Craig and Ehsan Valavi
    • December 2022
    • Faculty Research

    How Do You Compete and Cooperate? Understanding Strategic Interactions

    By: Jorge Tamayo
More from the Authors
  • The Effects of Fair Workweek Laws on Store Performance: Evidence from Chicago By: Caleb Kwon and Ananth Raman
  • Hamptonshire Gas and Convenience By: Ananth Raman, Nathan Craig and Ehsan Valavi
  • How Do You Compete and Cooperate? Understanding Strategic Interactions By: Jorge Tamayo
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