Assessing the Accuracy of Purchase Quantity Decisions

This study investigates decision-making accuracy with respect to quantity aspects of purchase decisions. A set of experiments simulated a retail purchase context. These experiments gauged decision accuracy and tested factors that bias quantity judgments. Experiment participants tended to overbuy, but overall accuracy was high: 88 percent of decisions were within ten percent of the optimal quantity. Decision accuracy worsened in the presence of demand trends, increased variation in demand probabilities, and increased attention to non-diagnostic framing information. Subjects were largely unable to assess their decision accuracy. Results identify decision contexts that may produce poor decisions by professional buyers.