Suchergebnisse

ABSTRACTMake‐to‐order firms use different approaches for managing their lead‐times and pricing in the face of changing market conditions. A particular firm's approach may be largely dictated by environmental constraints. For example, it makes little sense to carefully manage lead‐time if its effect on demand is muted, as it can be in situations where leadtime is difficult for the market to gauge or requires investment to estimate. Similarly, it can be impractical to change capacity and price. However, environmental constraints are likely to become less of an issue in the future with the expanding e‐business infrastructure, and this trend raises questions into how to manage effectively the marketing mix of price and lead‐time in a more "friction‐free" setting.We study a simple model of a make‐to‐order firm, and we examine policies for adjusting price and capacity in response to periodic and unpredictable shifts in how the market values price and lead‐time. Our analysis suggests that maintaining a fixed capacity while using lead‐time and/or price to absorb changes in the market will be most attractive when stability in throughput and profit are highly valued, but in volatile markets, this stability comes at a cost of low profits. From a pure profit maximization perspective, it is best to strive for a short and consistent lead‐times by adjusting both capacity and price in response to market changes.

ABSTRACTThis articles considers a decentralized supply chain in which a single manufacturer is selling a perishable product to a single retailer facing uncertain demand. It differs from traditional supply chain contract models in two ways. First, while traditional supply chain models are based on risk neutrality, this article takes the viewpoint of behavioral principal–agency theory and assumes the manufacturer is risk neutral and the retailer is loss averse. Second, while gain/loss (GL) sharing is common in practice, there is a lack of analysis of GL‐sharing contracts in the supply chain contract literature. This article investigates the role of a GL‐sharing provision for mitigating the loss‐aversion effect, which drives down the retailer order quantity and total supply chain profit. We analyze contracts that include GL‐sharing‐and‐buyback (GLB) credit provisions as well as the special cases of GL contracts and buyback contracts. Our analytical and numerical results lend insight into how a manufacturer can design a contract to improve total supply chain, manufacturer, and retailer performance. In particular, we show that there exists a special class of distribution‐free GLB contracts that can coordinate the supply chain and arbitrarily allocate the expected supply chain profit between the manufacturer and retailer; in contrast with other contracts, the parameter values for contracts in this class do not depend on the probability distribution of market demand. This feature is meaningful in practice because (i) the probability distribution of demand faced by a retailer is typically unknown by the manufacturer and (ii) a manufacturer can offer the same contract to multiple noncompeting retailers that differ by demand distribution and still coordinate the supply chains.

AbstractWe study a firm's capacity reservation and sourcing decisions under exchange‐rate and demand uncertainty. The firm initially reserves capacity from one domestic and one international supplier in the presence of exchange‐rate and demand uncertainty. After observing exchange rates, the firm determines the amount of capacity to utilize for sourcing under demand uncertainty. The article makes four contributions. First, it identifies the set of optimal capacity reservation policies for sourcing activities: One onshore, two offshore, and two dual sourcing policies. The first dual sourcing policy is a defensive action where the firm rations limited capacity between the two sources. The second dual sourcing policy is an opportunistic approach as it features excess capacity investment in order to benefit from currency fluctuations. The analysis shows how the optimal sourcing policy changes with increasing degrees of exchange‐rate volatility. Second, while earlier publications classify cost as an order qualifier, we find that characterization of a dominant sourcing strategy is more nuanced under exchange rate uncertainty. In particular, a buyer might not reserve capacity at a supplier who has a lower (expected) cost and choose to work only with a supplier who has a higher unit expected cost. Third, the article shows that risk aversion reduces the likelihood of single sourcing, specifically offshore sourcing, and increases the likelihood of dual sourcing. Fourth, the study demonstrates that financial hedging can eliminate the negative consequences of risk aversion and make the policy findings more pronounced.