How analytic reasoning style and global thinking relate to understanding stocks and flows. Issue 1 (26th July 2015)

• Record Type: Journal Article
• Authors: Weinhardt, Justin M.; Hendijani, Rosa; Harman, Jason L.; Steel, Piers; Gonzalez, Cleotilde
• Is Part Of: Journal of operations management. Volume 39/40:Issue 1(2015)
• Page Start: 23
• Page End: 30
• Publication Date: 2015-07-26
• Subjects: Cognitive reflection -- Global/local reasoning -- Stock‐flow failure -- Correlation heuristic -- Behavioral operations; Production management -- Periodicals; Management -- Periodicals; 658.5
• DOI: 10.1016/j.jom.2015.07.003
• Languages: English
• ISSNs: 0272-6963

Abstract

Abstract: Understanding stock‐flow relationships is fundamental to the management of operational systems. In their most basic form, stock‐flow systems consist of resources that accumulate and flows that change their level. Managing stock‐flow systems is an indispensable part of operations management, including supply chain, inventory, and capacity planning. Previous studies have shown that most people, even experts and well‐educated individuals, make persistent errors when inferring the behavior of accumulation (i.e., stock) over time. However, little is known about what individual characteristics make a decision maker better or worse at understanding stock‐flows. In this paper, we report the results of investigating the relationship between analytical‐intuitive thinking and global‐local processing on performance in a simple stock‐flow problem. We find that individuals with an analytical thinking style, rather than an intuitive one, perform significantly better on a stock‐flow problem; whereas individuals with a global, rather than a local, thinking style do not necessarily perform better. However, even individuals who exhibit analytical thinking have a poor understanding of stock‐flow problems. Analytical thinking may be related to understanding stock and flows, but more work is needed to better understand what cognitive abilities are required to solve these problems. Highlights: The paper examines the understanding of stock‐flow systems, which consist of resources that accumulate and flows that change their level over time. Managing stock‐flow systems is an indispensable part of operations management, including supply chain management, inventory management, and capacity planning. Research has found that individuals make persistent errors in inferring the behavior of accumulation (i.e., stock) over time. We investigated the relationship of individual's analytical‐intuitive thinking and global‐local processing and performance in a simple stock‐flow problem. Results indicate that analytical thinking is positively related to performance, but global thinking is not.