Suchergebnisse

AbstractThis paper focuses on certain types of distribution networks in which commodity flows must go through connections that are subject to congestion. Connections serve as transshipment and/or switching points and are modeled as M/G/1 queues. The goal is to select connections, assign flows to the connections, and size their capacities, simultaneously. The capacities are controlled by both the mean and the variability of service time at each connection. We formulate this problem as a mixed integer nonlinear optimization problem for both the fixed and variable service rate cases. For the fixed service rate case, we prove that the objective function is convex and then develop an outer approximation algorithm. For the variable service rate case, both mean and second moment of service time are decision variables. We establish that the utilization rates at the homogeneous connections are identical for an optimal solution. Based on this key finding, we develop a Lagrangian relaxation algorithm. Numerical experiments are conducted to verify the quality of the solution techniques proposed. The essential contribution of this work is the explicit modeling of connection capacity (through the mean and the variability of service time) using a queueing framework. © 2005 Wiley Periodicals, Inc. Naval Research Logistics, 2005.

AbstractExternal environmental factors can deeply shape customer behavior and contribute to uncertainty in retail operations. In this study, we use field data from a national fashion sporting goods retail chain to empirically study the effect on retail store performance from one important but underappreciated external environmental factor, air pollution; and investigate the potential mechanism of this air pollution's impact. We find that air pollution has an inverted U‐shaped effect on store traffic, which is attributed to a shift of customers between offline shopping and other activities with different air pollution exposure levels. The variation in store traffic caused by air pollution further leads to a U‐shaped relationship between air pollution and the retail conversion rate. In addition, air pollution can affect customer composition as well as the perceived utility of products, reflected by more men's wear and less sportswear sold in hazy weather. In view of the globally increasing air pollution problem, especially in the context of climate change, our findings highlight the importance and value of taking air pollution into account in operations and marketing management.

AbstractRisk‐Adjusted‐Return‐On‐Capital (RAROC) is a loan‐pricing criterion under which a bank sets the loan term such that a certain rate of return is achieved on the regulatory capital required by the Basel regulation. Some banks calculate the amount of regulatory capital for each loan under the standardized approach ("standardized banks," the regulatory capital is proportional to the loan amount), and others under the internal rating‐based (IRB) approach ("IRB banks," the regulatory capital is related to the Value‐at‐Risk of the loan). This article examines the impact of the RAROC criterion on the bank's loan‐pricing decision and the retailer's inventory decision. We find that among the loan terms that satisfy the bank's RAROC criterion, the one that benefits the retailer the most requires the bank to specify an inventory advance rate in addition to the interest rate. Under this loan term, the retailer's inventory level is more sensitive to his asset level when facing an IRB bank compared to a standardized bank. An IRB (standardized) loan leads to higher profit and inventory level for retailers with high (low) asset. For retailers with medium asset, an IRB loan results in a higher retailer profit but a lower consumer welfare. Calibrated numerical study reveals that the benefit of choosing standardized banks (relative to IRB banks) can be as high as 30% for industries with severe capital constraints, volatile demands, and low profit margins, highlighting the importance for retailers to carefully choose the type of banks to borrow from. When the interest rate is capped by regulation, retailers borrowing from a standardized bank are more likely to be influenced by the interest rate cap than those borrowing from an IRB bank. Under strong empire‐building incentives (the bank will offer loan terms to maximize the size of the loan), retailers with medium initial asset level shift their preference from IRB banks to standardized banks.