Faculty & Research

Nicole DeHoratius

Nicole DeHoratius

Adjunct Professor of Operations Management

Nicole DeHoratius is an expert in the management of retail operations. As a faculty member of the University of Chicago's Booth School of Business, she has published in leading journals such as Management Science, Harvard Business Review, and California Management Review. The Manufacturing & Service Operations Management (M&SOM) Society recognized her article "Retail Inventory Management When Records are Inaccurate" (coauthored with Adam Mersereau and Linus Schrage) for its Best Paper Award.

Nicole's industry projects include work with Fred Meyer, McDonald's, Procter & Gamble, Staples, Target, Ulta Beauty, and Walmart, among others. For her work with Hugo Boss (conducted with Nathan Craig and Ananth Raman), Nicole received the Ralph Gomory 2016 Best Industry Studies Award. She serves as the Past-President of the Production and Operations Management (POM) Society's College of Supply Chain Management, an associate editor for MSOM, and a department editor for POM.

Nicole received her D.B.A from Harvard Business School, her M.Sc. from the University of Sussex as a Rotary Ambassadorial Scholar, and her A.B., magna cum laude, from Harvard College. She joined Chicago Booth in 2001 and since then has taught operations management, service operations, and supply chain management to executives in programs and companies around the globe. For exemplifying the characteristics students most value in their professors, Nicole earned the 2015 and 2016 Rotman School of Management Teaching Award.


2019 - 2020 Course Schedule

Number Title Quarter
40801 Operations Management 2019 (Fall)
40810 Strategic Service Design and Delivery 2020 (Summer)

Research Activities

Supply chain management, retail operations, execution, product availability, vendor management, incentives, operations strategy, labor planning, customer satisfaction, consumer goods, operations management, emerging markets, executive development, operations strategy, apparel, Asia-Pacific.

  1. Mou, S., Robb D., and N. DeHoratius. Forthcoming. Retail Store Operations: Literature Review and Research Directions. European Journal of Operational Research.
  2. Bendoly, E., Craig, N., and N. DeHoratius. Forthcoming. Consistency and Recovery in Retail Supply Chains. Journal of Business Logistics.
  3. Jin, M., DeHoratius, N., and G. Schmidt. Forthcoming. Want to Reduce the Bullwhip Effect? Measure It. Here's How. Supply Chain Management: an International Journal.
  4. Jin, M., DeHoratius, N., and G. Schmidt. 2017. In Search of Intra-Industry Bullwhips. International Journal of Production Economics, 191: 51-65.
  5. Craig, N., DeHoratius, N., A. Raman. 2016. The Impact of Supplier Inventory Service Level on Retailer Demand. M&SOM, 18(4): 461-474. Ralph Gomory 2016 Best Industry Studies Award.
  6. Goyal, S., Hardgrave, B., Aloysius, J., N. DeHoratius. 2016. The Effectiveness of RFID in Backroom and Sales Floor Inventory Management. International Journal of Logistics Management, 27(3): 795-815. Abstract
  7. DeHoratius, N., D. Pajovic. 2015. Opportunities and Challenges for Engaging Merchants in the Protection of Retail Assets. Retail Industry Leaders Association. Press Coverage
  8. DeHoratius, N., Z. Ton. 2015. The Role of Execution in Managing Product Availability, Chapter 4 in Retail Supply Chain Management, edited by N. Agrawal and S. Smith. New York: Springer. Abstract
  9. Rohrer, L, N. DeHoratius. 2015. SeyfarthLean: Transforming Legal Service Delivery at Seyfarth Shaw. Harvard Law School HLS 15-13. Abstract 
  10. Craig, N., DeHoratius, N., Jiang, Y., D. Klabjan. 2015. Execution Quality: An Analysis of Fulfillment Errors in a Retail Distribution Center. Journal of Operations Management, 38: 25-40. Abstract
  11. DeHoratius, N. 2014. Global Sourcing at Walmart. The University of Chicago Booth School of Business.
  12. Barratt, M., N. DeHoratius. 2012. Retail Analytics and Behavioral Operations: A Recipe for Superior Performance. Cutter Consortium Data Insight & Social BI Executive Update, 12(13): 1-6. Abstract
  13. DeHoratius, N., E. Rabinovich. 2011. Field Research in Operations and Supply Chain Management. Journal of Operations Management, 29: 371-375. Abstract
  14. DeHoratius, N. 2011. Inventory Record Inaccuracy in Retail Supply Chains, Wiley Encyclopedia of Operations Research and Management Science, edited by J. Cochran. John Wiley & Sons, v. 4, p. 2,611-2,625. Abstract
  15. Aksin, Z., N. DeHoratius. 2010. Introduction to the Special Issue, Teaching Services & Retail Operations Management. INFORMS Transactions on Education
  16. Raman, A., N. DeHoratius, Z. Kanji. 2009.Supply Chain Optimization at Hugo Boss (A) and (B)Harvard Business School 9-609-029, 9-609-055. Abstract
  17. DeHoratius, N., A. Raman. 2008. Inventory Record Inaccuracy: An Empirical Analysis. Management Science, 54(4): 627-641. Abstract (E-Companion)
  18. DeHoratius, N., M. L. Fisher, S. Netessine. 2008. McDonald's Corporation: Launching McCafe, The Wharton School, University of Pennsylvania.
  19. DeHoratius, N., R. K. Baxter. 2008. Opportunities and Challenges in the Bicycle Industry: Strategic Growth, Retail Execution, and Collaboration. Bicycle Product Suppliers Association.
  20. DeHoratius, N., Mersereau A. J., L. Schrage. 2008. Retail Inventory Management When Records are Inaccurate. M&SOM, 10(2): 254-277. 2009 Best Paper Award
  21. DeHoratius, N., A. Raman. 2007. Store Manager Incentive Design and Retail Performance:  An Exploratory Investigation. M&SOM, 9(4): 518-534. Abstract (Technical Appendix)
  22. Kulp, S., N. DeHoratius, Z. Kanji. 2007. Vendor Compliance at Geoffrey Ryans (A), (B), and Teaching Note. Harvard Business School 9108-022, 9108-023, 5108-029. Abstract

For a listing of research publications, please visit the university library listing page.

REVISION: Execution Quality and Chargeback Penalties in Retail Supply Chains
Date Posted: Mar  30, 2020
Retailers procure inventory by placing purchase orders (POs) with suppliers. POs specify product price, quantity, quality, delivery times, and other aspects of the fulfillment process, such as carton labeling requirements and packaging formats. When servicing an order, a supplier may fail to meet the fulfillment terms, thus committing a fulfillment error and triggering a chargeback penalty. We collect supplier compliance manuals from 111 retailers to characterize fulfillment errors and chargebacks in practice. The majority of chargeback penalties listed by retailers pertain to execution quality: aspects of the fulfillment process beyond product price, quantity, quality, and delivery time. We use an empirically grounded analytical model in combination with game-theoretic analysis to demonstrate that the chargebacks most commonly used in practice do a poor job coordinating supply chains around execution quality. This result contradicts the recommendations in the trade literature.

REVISION: Modeling the Behavior of Patients Who Leave the Emergency Department Without Being Seen
Date Posted: May  06, 2019
Queue abandonment has a significant impact on system performance. However, the key drivers for abandonment, particularly in observable systems, are not well understood. To better inform our understanding of abandonment behavior, we study the effect of three operational drivers of abandonment from a hospital emergency department (ED), namely, waiting time, queue length, and observed service rate. We confirm that all three factors affect a patient's propensity for leaving the waiting area without being seen by a physician (LWBS), i.e., abandoning the queue. Further, these factors interact with each other in a non-linear fashion. Both ED crowding and observed service rate influence a patient's perception of waiting time. Moreover, patients are not homogenous in their abandonment response and we observe behavior that is distinct for patients with severe conditions. Specifically, patients who report to a congested ED with more severe conditions are more inclined to abandon the ED early in ...

REVISION: Execution Failures in Retail Supply Chains - A Virtual Reality Experiment
Date Posted: Aug  31, 2018
We conduct a real-effort experiment in an immersive virtual environment and quantify the impact of product similarity on operational execution in a retail setting. In our experiments, subjects must identify and sort two types of products based on their observable characteristics. We find measures of operational execution to be substantially lower when the observable characteristics of the two products types are very similar compared to when they are dissimilar. Specifically, we observe more sorting errors and more products left unsorted when subjects handle products with more similar observable characteristics. Introducing a visual cue to distinguish products improves execution when the products are dissimilar (by lowering the frequency of sorting mistakes) and, even more so, when they are similar (by reducing both the number of sorting mistakes and the number of products left unsorted). Overall performance (measured by the faction of products correctly sorted) increases by ...

Update: Execution Quality and Chargeback Penalties in Retail Supply Chains
Date Posted: Jun  22, 2017
Retailers procure inventory by placing purchase orders (POs) with suppliers. POs specify product price, quantity, quality, and delivery times as well as other aspects of the fulfillment process, such as bar code standards and placement, carton labeling requirements, and packaging format. Retailers expect suppliers to adhere to fulfillment terms to enable supply chain optimizations, e.g., automation and pack-by-store product flows. When servicing an order, a supplier may fail to adhere to the fulfillment terms, thus committing a fulfillment error and triggering a chargeback penalty. Chargebacks reduce supplier revenues, transferring billions of dollars from suppliers to retailers annually. We collect supplier compliance manuals from 111 retailers to characterize fulfillment errors and chargeback penalties in practice. We find that the majority of chargeback penalties listed by retailers pertain to execution quality: i.e., aspects of the fulfillment process beyond product price, ...
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REVISION: Consistency and Recovery in Retail Supply Chains
Date Posted: Jun  21, 2017
Practitioners and researchers describe inventory service level with metrics that communicate the likelihood of demand fulfillment without considering the on-going capabilities of the supplier, e.g., in-stock and _ll rate. We develop a method for measuring inventory service level that incorporates such supplier capabilities, namely consistency (the ability of a supplier to fulfill orders repeatedly) and recovery (the ability of a supplier to fulfill orders after a lapse in service). Using data from two retail supply chains, we illustrate our approach. To demonstrate the impact of consistency and recovery on supply chain performance, we model a retailer purchasing from competing suppliers with different levels of consistency and recovery. The model incorporates the retailer's uncertainty about demand and the retailer's uncertainty about its suppliers' service levels. We characterize how the retailer's orders and profitability change with a supplier's delivery performance through ...

REVISION: The Impact of Supplier Inventory Service Level on Retailer Demand
Date Posted: Jan  14, 2016
To set inventory service levels, suppliers must understand how changes in inventory service level affect demand. We build on prior research, which uses analytical models and laboratory experiments to study the impact of a supplier's service level on demand from retailers, by testing this relationship in the field. We analyze a field experiment at the supplier Hugo Boss to deter- mine how the supplier's inventory service level affects demand from its retailer customers. We find increases in historical fill rate to be associated with statistically significant and managerially substantial increases in current retailer orders (i.e., demand, not just sales). Specifically, a one percentage point increase in fill rate, measured over the prior year, is associated with a statistically significant 11% increase in current retailer demand, controlling for other factors that might affect retailer demand. We explore the drivers of this demand increase, including changes in retailer assortment and ...

REVISION: Point-of-Care Testing: Improving Emergency Department Performance through Process Redesign
Date Posted: Dec  08, 2012
Hospital emergency departments (EDs) typically rely on central laboratories to analyze patient samples for the purposes of diagnosing and treating patients. Point-of-care testing (POCT) is a process redesign that shifts the analysis of samples from the central lab to the ED. Using a queueing model, we generate hypotheses about how POCT impacts operational performance and then test those hypotheses empirically using data collected from a large, urban, tertiary, academic hospital. Specifically, ...

New: Supply Chain Optimization at Hugo Boss (B) - The M-Ratio
Date Posted: Jun  12, 2009
We evaluate the impact of a supply chain pilot implemented at Hugo Boss. This pilot entailed altering the way in which Hugo Boss orders from its suppliers. We explore the challenge of assessing the impact of supply chain change, the link between operational performance and firm performance, and the relationship between sales, inventory, and product availability.

New: Supply Chain Optimization at Hugo Boss (A)
Date Posted: Jun  12, 2009
Inventory, Order management cycle, Order processing, Order quantity, Lines of business, Product management, Consumer goods, Department stores, Retail stores, Retailers, Retailing, Supply chain management, Supply chains.