Pub Date : 2020-08-09DOI: 10.1080/03155986.2020.1800975
Alireza Rahimi, M. Rönnqvist, L. Lebel, J. Audy
Abstract A large portion of expenses in the forest industries is associated with wood supply procurement. Numerous suppliers are involved and securing wood supply contracts with competitive prices is a constant challenge for procurement managers. A major difficulty is the procurement exposure to various sourcing risks including the start of the spring thaw, contract breach, or unreliability of suppliers. A procurement plan should anticipate random events and include measures that counter their negative impact. Recourse actions must be planned by considering volume uncertainty and wood price fluctuations. Relying on manual tools is hardly capable of considering all aspects of this problem. A stochastic programming approach is proposed to support the development of a procurement plan. In this model, several types of contracts including fixed, flexible and option contracts with different durations are included. The proposed selection of contracts from a stochastic programming model yields average optimality in the presence of plausible scenarios. The developed two-stage stochastic programming model decides on the selection of the optimal portfolio of contracts to minimize total procurement costs. Based on a case study in Quebec, an average saving of 4% was shown by using stochastic programming compared to the deterministic approach.
{"title":"Selecting wood supply contracts under uncertainty using stochastic programming","authors":"Alireza Rahimi, M. Rönnqvist, L. Lebel, J. Audy","doi":"10.1080/03155986.2020.1800975","DOIUrl":"https://doi.org/10.1080/03155986.2020.1800975","url":null,"abstract":"Abstract A large portion of expenses in the forest industries is associated with wood supply procurement. Numerous suppliers are involved and securing wood supply contracts with competitive prices is a constant challenge for procurement managers. A major difficulty is the procurement exposure to various sourcing risks including the start of the spring thaw, contract breach, or unreliability of suppliers. A procurement plan should anticipate random events and include measures that counter their negative impact. Recourse actions must be planned by considering volume uncertainty and wood price fluctuations. Relying on manual tools is hardly capable of considering all aspects of this problem. A stochastic programming approach is proposed to support the development of a procurement plan. In this model, several types of contracts including fixed, flexible and option contracts with different durations are included. The proposed selection of contracts from a stochastic programming model yields average optimality in the presence of plausible scenarios. The developed two-stage stochastic programming model decides on the selection of the optimal portfolio of contracts to minimize total procurement costs. Based on a case study in Quebec, an average saving of 4% was shown by using stochastic programming compared to the deterministic approach.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"33 1","pages":"191 - 211"},"PeriodicalIF":1.3,"publicationDate":"2020-08-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82173407","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-08-04DOI: 10.1080/03155986.2020.1796065
M. Bieniek
Abstract Consignment is a form of business arrangement, in which a vendor places goods at a retailer’s location without receiving payment until the products are sold. This paper examines consignment with consumer non-defective returns behaviour, where the upstream vendor makes a contract with the downstream retailer. The vendor decides what the consignment and refund prices are, and the retailer chooses the retail price. The vendor gets paid based on the sold units, salvages and returns. We analyze two contracts, called retailer and vendor managed consignment inventory (RMCI and VMCI, respectively), the only difference being that under RMCI, the retailer chooses the service level, and under VMCI, the vendor specifies it. We present precise solutions to VMCI for additive uncertainty and compare them to the multiplicative case. We prove that the vendor’s optimal return policy depends on a salvage value since if it is equal to zero, the vendor should not offer the return policy. We show that the channel may gain profit from the return policy for the positive salvage value. We demonstrate that the form of uncertainty and the presence of consumer returns considerably affect the solutions to the problems. As an extension, we give the results obtained under RMCI.
{"title":"Consumer returns in consignment contracts with inventory control and additive uncertainty","authors":"M. Bieniek","doi":"10.1080/03155986.2020.1796065","DOIUrl":"https://doi.org/10.1080/03155986.2020.1796065","url":null,"abstract":"Abstract Consignment is a form of business arrangement, in which a vendor places goods at a retailer’s location without receiving payment until the products are sold. This paper examines consignment with consumer non-defective returns behaviour, where the upstream vendor makes a contract with the downstream retailer. The vendor decides what the consignment and refund prices are, and the retailer chooses the retail price. The vendor gets paid based on the sold units, salvages and returns. We analyze two contracts, called retailer and vendor managed consignment inventory (RMCI and VMCI, respectively), the only difference being that under RMCI, the retailer chooses the service level, and under VMCI, the vendor specifies it. We present precise solutions to VMCI for additive uncertainty and compare them to the multiplicative case. We prove that the vendor’s optimal return policy depends on a salvage value since if it is equal to zero, the vendor should not offer the return policy. We show that the channel may gain profit from the return policy for the positive salvage value. We demonstrate that the form of uncertainty and the presence of consumer returns considerably affect the solutions to the problems. As an extension, we give the results obtained under RMCI.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"7 1","pages":"169 - 189"},"PeriodicalIF":1.3,"publicationDate":"2020-08-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91103859","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-23DOI: 10.1080/03155986.2020.1796064
Armagan Ozbilge, Aydin Ulucan, Kazim Baris Atici
Abstract The current paper aims to provide a novel approach for the assignment of students to elective courses using historical records of course capacities and student demand. With this aim, we establish a link between the course assignment problem and the airline seat allocation modeling of Revenue Management. An analogy is set up relying on the assumption that the students form distinct groups and intend to enroll in the elective courses with limited capacities, which is similar to different classes of customers to purchase tickets for the flights with limited capacities. We illustrate the proposed idea in a real-world case utilizing the historical demand and capacity data of a public university in which the senior students have priority in enrolling. The results of the proposed modeling can serve not only for capacity allocations to the courses but also offers suggestions to evaluate the potential capacity augmentation or reduction decisions.
{"title":"Elective course assignment problem: a revenue management based approach","authors":"Armagan Ozbilge, Aydin Ulucan, Kazim Baris Atici","doi":"10.1080/03155986.2020.1796064","DOIUrl":"https://doi.org/10.1080/03155986.2020.1796064","url":null,"abstract":"Abstract The current paper aims to provide a novel approach for the assignment of students to elective courses using historical records of course capacities and student demand. With this aim, we establish a link between the course assignment problem and the airline seat allocation modeling of Revenue Management. An analogy is set up relying on the assumption that the students form distinct groups and intend to enroll in the elective courses with limited capacities, which is similar to different classes of customers to purchase tickets for the flights with limited capacities. We illustrate the proposed idea in a real-world case utilizing the historical demand and capacity data of a public university in which the senior students have priority in enrolling. The results of the proposed modeling can serve not only for capacity allocations to the courses but also offers suggestions to evaluate the potential capacity augmentation or reduction decisions.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"24 1","pages":"145 - 168"},"PeriodicalIF":1.3,"publicationDate":"2020-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77636948","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-20DOI: 10.1080/03155986.2020.1794227
Maryam Safarnezhad, M. Aminnayeri, R. G. Yaghin
Abstract In many real-world situations, there are a fraction of defective items in a received lot whose quality should be evaluated before storage. In this article, we address the joint ordering, pricing, and inspection planning problem for a retailer facing price-sensitive demand and stochastic supply lead-time. The fraction of nonconforming items in a received lot follows a beta distribution and the buyer considers different kinds of inspection policies that include no inspection, inspection and sampling. Moreover, a novel non-linear optimization model is developed in order to determine optimal ordering, pricing and inspection policies. An analytical solution procedure based on mathematical properties of the model is proposed to find optimal decision variables. Numerical studies are conducted in order to show the applicability of the developed model and effectiveness of the proposed algorithms.
{"title":"Joint pricing and lot sizing model with statistical inspection and stochastic lead time","authors":"Maryam Safarnezhad, M. Aminnayeri, R. G. Yaghin","doi":"10.1080/03155986.2020.1794227","DOIUrl":"https://doi.org/10.1080/03155986.2020.1794227","url":null,"abstract":"Abstract In many real-world situations, there are a fraction of defective items in a received lot whose quality should be evaluated before storage. In this article, we address the joint ordering, pricing, and inspection planning problem for a retailer facing price-sensitive demand and stochastic supply lead-time. The fraction of nonconforming items in a received lot follows a beta distribution and the buyer considers different kinds of inspection policies that include no inspection, inspection and sampling. Moreover, a novel non-linear optimization model is developed in order to determine optimal ordering, pricing and inspection policies. An analytical solution procedure based on mathematical properties of the model is proposed to find optimal decision variables. Numerical studies are conducted in order to show the applicability of the developed model and effectiveness of the proposed algorithms.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"30 1","pages":"111 - 144"},"PeriodicalIF":1.3,"publicationDate":"2020-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87952561","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-20DOI: 10.1080/03155986.2020.1785263
P. Orenstein
Abstract Supply chain networks are complex and often proprietary, which implies that on the most part, the structure of a company’s supply chain is not well known nor accessible. This research investigates supply chain network topology, properties and supply network evolution using a data-driven approach. The key idea is to construct a sample set of data from a financial source and examine it in the context of supply network topology. This represents a new direction, since, while financial data has been applied by researchers to explore financial relationships in a supply chain, the application of this data source to determine the underlying topological characteristics is still in its infancy. As a starting point, we create a sample of supply networks from the retail industry sector (two from home improvement industry and one from the sporting goods industry). We expect that the retail industry will provide a rich and dynamic source of representative data for a typical supply chain network. We use the sample data sets to identify specific topological characteristics (for example, average degree, network diameter, average path length, and degree exponent) which help explain the evolution and dynamics of a modern supply network. Using these identified characteristics, our plan is to expand the selection to cover additional networks over a wider time-span in order to generalize the findings.
{"title":"The changing landscape of supply chain networks: an empirical analysis of topological structure","authors":"P. Orenstein","doi":"10.1080/03155986.2020.1785263","DOIUrl":"https://doi.org/10.1080/03155986.2020.1785263","url":null,"abstract":"Abstract Supply chain networks are complex and often proprietary, which implies that on the most part, the structure of a company’s supply chain is not well known nor accessible. This research investigates supply chain network topology, properties and supply network evolution using a data-driven approach. The key idea is to construct a sample set of data from a financial source and examine it in the context of supply network topology. This represents a new direction, since, while financial data has been applied by researchers to explore financial relationships in a supply chain, the application of this data source to determine the underlying topological characteristics is still in its infancy. As a starting point, we create a sample of supply networks from the retail industry sector (two from home improvement industry and one from the sporting goods industry). We expect that the retail industry will provide a rich and dynamic source of representative data for a typical supply chain network. We use the sample data sets to identify specific topological characteristics (for example, average degree, network diameter, average path length, and degree exponent) which help explain the evolution and dynamics of a modern supply network. Using these identified characteristics, our plan is to expand the selection to cover additional networks over a wider time-span in order to generalize the findings.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"32 1","pages":"53 - 73"},"PeriodicalIF":1.3,"publicationDate":"2020-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82702102","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-16DOI: 10.1080/03155986.2020.1789386
T. Drezner, Z. Drezner
Abstract In this note, we analyze location problems where the distance (time) to get to the destination by air is affected by winds. We propose two models: the asymmetric Weber location problem and the round-trip Weber location problem. The problems are analyzed and solved.
{"title":"Asymmetric distance location model","authors":"T. Drezner, Z. Drezner","doi":"10.1080/03155986.2020.1789386","DOIUrl":"https://doi.org/10.1080/03155986.2020.1789386","url":null,"abstract":"Abstract In this note, we analyze location problems where the distance (time) to get to the destination by air is affected by winds. We propose two models: the asymmetric Weber location problem and the round-trip Weber location problem. The problems are analyzed and solved.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"33 1","pages":"102 - 110"},"PeriodicalIF":1.3,"publicationDate":"2020-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77360568","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-06DOI: 10.1080/03155986.2020.1788328
Leila Khajemahalle, S. Emami, R. N. Keshteli
Abstract The dynamic facility layout problem (DFLP) deals with the arrangement of facilities/departments in a factory for different periods so that the location of the facilities can be changed from one period to another one. Traditionally, this problem is formulated to minimize the sum of material handling and rearrangement costs in the planning horizon by assuming that all parameters are deterministic. In this paper, we assume that the material flow between departments and rearrangement costs are uncertain and, accordingly, develop the robust counterpart (RC) of the DFLP model. The model is computationally intractable; therefore, we propose a hybrid algorithm based on nested partitions (NP) and simulated annealing (SA) algorithms, namely NP-SA. Moreover, we develop a heuristic algorithm to compute the values of the additional variables used in the RC model. The numerical results indicate that the NP-SA algorithm is very effective in giving a good solution in a short time. Furthermore, a simulation study demonstrates that, on average, robust solutions are better than nominal solutions.
{"title":"A hybrid nested partitions and simulated annealing algorithm for dynamic facility layout problem: a robust optimization approach","authors":"Leila Khajemahalle, S. Emami, R. N. Keshteli","doi":"10.1080/03155986.2020.1788328","DOIUrl":"https://doi.org/10.1080/03155986.2020.1788328","url":null,"abstract":"Abstract The dynamic facility layout problem (DFLP) deals with the arrangement of facilities/departments in a factory for different periods so that the location of the facilities can be changed from one period to another one. Traditionally, this problem is formulated to minimize the sum of material handling and rearrangement costs in the planning horizon by assuming that all parameters are deterministic. In this paper, we assume that the material flow between departments and rearrangement costs are uncertain and, accordingly, develop the robust counterpart (RC) of the DFLP model. The model is computationally intractable; therefore, we propose a hybrid algorithm based on nested partitions (NP) and simulated annealing (SA) algorithms, namely NP-SA. Moreover, we develop a heuristic algorithm to compute the values of the additional variables used in the RC model. The numerical results indicate that the NP-SA algorithm is very effective in giving a good solution in a short time. Furthermore, a simulation study demonstrates that, on average, robust solutions are better than nominal solutions.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"13 1","pages":"74 - 101"},"PeriodicalIF":1.3,"publicationDate":"2020-07-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89016041","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-02DOI: 10.1080/03155986.2019.1629771
Fredrik Ødegaard, C. Zheng
Abstract We analyze symmetric subgame perfect equilibria of the dollar auction in its original format, without the modifications that the literature adopts to rule out overbidding in the game. The game has a continuum of subgame perfect equilibria, generating expected revenues that range from zero to the full value of the contested prize. Such multiplicity of equilibria suggests that the overbidding pattern often observed in experiments of this game might be symptoms of coordination failure among bidders, consistent with the rational choice paradigm with no need for behavioral or psychological explanations. The analysis is shown robust to extensions considering: (i) alternative tie-breaking rule that allows for multiple frontrunners, and (ii) preemptive bidding by the frontrunner.
{"title":"Surplus dissipating equilibria in the dollar auction","authors":"Fredrik Ødegaard, C. Zheng","doi":"10.1080/03155986.2019.1629771","DOIUrl":"https://doi.org/10.1080/03155986.2019.1629771","url":null,"abstract":"Abstract We analyze symmetric subgame perfect equilibria of the dollar auction in its original format, without the modifications that the literature adopts to rule out overbidding in the game. The game has a continuum of subgame perfect equilibria, generating expected revenues that range from zero to the full value of the contested prize. Such multiplicity of equilibria suggests that the overbidding pattern often observed in experiments of this game might be symptoms of coordination failure among bidders, consistent with the rational choice paradigm with no need for behavioral or psychological explanations. The analysis is shown robust to extensions considering: (i) alternative tie-breaking rule that allows for multiple frontrunners, and (ii) preemptive bidding by the frontrunner.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"19 1","pages":"425 - 437"},"PeriodicalIF":1.3,"publicationDate":"2020-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77750615","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-07-02DOI: 10.1080/03155986.2019.1629770
Hesham K. Alfares, A. Alzahrani
Abstract This article presents a two-stage workforce scheduling approach for security guards at motor traffic gates. In the first stage, staffing requirements are determined based on analyzing workload variations for each gate. In the second stage, an integer programming model is formulated to assign guards to different work shifts in order to satisfy the staffing requirements of each gate. The objective is to minimize the total labour cost of two categories of security employees: non-supervising (guards), and supervising (supervisors). The new model considers multiple employee types, multiple shifts, and multiple locations, where security employees are assigned to work groups. Moreover, to maximize flexibility, each employee can be assigned to work at different gates during different shifts. Compared to the currently used schedule, the model produced an optimum work schedule that reduced the workforce size by 23% and the labour cost by 26%. Computational experiments with 40 randomly generated test problems confirmed the high savings potential of the proposed scheduling approach.
{"title":"Optimum workforce scheduling for multiple security gates","authors":"Hesham K. Alfares, A. Alzahrani","doi":"10.1080/03155986.2019.1629770","DOIUrl":"https://doi.org/10.1080/03155986.2019.1629770","url":null,"abstract":"Abstract This article presents a two-stage workforce scheduling approach for security guards at motor traffic gates. In the first stage, staffing requirements are determined based on analyzing workload variations for each gate. In the second stage, an integer programming model is formulated to assign guards to different work shifts in order to satisfy the staffing requirements of each gate. The objective is to minimize the total labour cost of two categories of security employees: non-supervising (guards), and supervising (supervisors). The new model considers multiple employee types, multiple shifts, and multiple locations, where security employees are assigned to work groups. Moreover, to maximize flexibility, each employee can be assigned to work at different gates during different shifts. Compared to the currently used schedule, the model produced an optimum work schedule that reduced the workforce size by 23% and the labour cost by 26%. Computational experiments with 40 randomly generated test problems confirmed the high savings potential of the proposed scheduling approach.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"53 1","pages":"438 - 455"},"PeriodicalIF":1.3,"publicationDate":"2020-07-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85211522","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-09DOI: 10.1080/03155986.2020.1774300
Chen Chen, Yongrui Duan
Abstract Along with the popularity of online shopping, the cash-back industry is witnessing dramatic development. Under this backdrop, retailers who sell products with network externalities make different decisions about affiliating with cash-back sites. In this paper, we set up a cash-back model considering network externalities. Our goal is to identify the condition under which it is profitable for retailers whose products exhibit network externalities to affiliate with a cash-back site and to find out the driving force of the profitability. We find that only when there are more low-type consumers than high-type consumers and the degree of network externalities is lower than a certain threshold is it profitable for such a retailer to affiliate with an independent cash-back site, because the cash-back rate is decreasing in the intensity of network externality. It is the price discriminative effect instead of the promotive effect that makes it profitable. We show that the double-marginalization problem between the retailer and an independent cash-back site leads to the cash-back paradox where all consumers pay more for the product in the presence of a cash-back channel. We also show that when the retailer affiliates with two cash-back sites, each site has the incentive to lower the cash-back rate to take advantage of network externalities, which makes the cash-back paradox more likely to happen and makes it less likely for a retailer to benefit from cash-back channels. Furthermore, we suggest the retailer establish his own cash-back channel. Our work provides implications for retailers as well as for cash-back sites and consumers.
{"title":"Online cash-back shopping with network externalities","authors":"Chen Chen, Yongrui Duan","doi":"10.1080/03155986.2020.1774300","DOIUrl":"https://doi.org/10.1080/03155986.2020.1774300","url":null,"abstract":"Abstract Along with the popularity of online shopping, the cash-back industry is witnessing dramatic development. Under this backdrop, retailers who sell products with network externalities make different decisions about affiliating with cash-back sites. In this paper, we set up a cash-back model considering network externalities. Our goal is to identify the condition under which it is profitable for retailers whose products exhibit network externalities to affiliate with a cash-back site and to find out the driving force of the profitability. We find that only when there are more low-type consumers than high-type consumers and the degree of network externalities is lower than a certain threshold is it profitable for such a retailer to affiliate with an independent cash-back site, because the cash-back rate is decreasing in the intensity of network externality. It is the price discriminative effect instead of the promotive effect that makes it profitable. We show that the double-marginalization problem between the retailer and an independent cash-back site leads to the cash-back paradox where all consumers pay more for the product in the presence of a cash-back channel. We also show that when the retailer affiliates with two cash-back sites, each site has the incentive to lower the cash-back rate to take advantage of network externalities, which makes the cash-back paradox more likely to happen and makes it less likely for a retailer to benefit from cash-back channels. Furthermore, we suggest the retailer establish his own cash-back channel. Our work provides implications for retailers as well as for cash-back sites and consumers.","PeriodicalId":13645,"journal":{"name":"Infor","volume":"17 1","pages":"26 - 52"},"PeriodicalIF":1.3,"publicationDate":"2020-06-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84626022","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"计算机科学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：