Company interest and research in the circular economy and remanufacturing have increased as a means of reducing negative environmental impacts. Remanufacturing is an industrial process whereby used products are returned to a state of like-new. However, few products are designed for remanufacturing, and further research and industrial efforts are needed to facilitate more widespread use of design for remanufacturing. One crucial factor facilitating design for remanufacturing is the integration of feedback in the product design process. Thus, the objective of this paper is to analyse feedback flows from remanufacturing to product design. Hence, a literature study and multiple case studies were conducted at three companies that design, manufacture and remanufacture different kinds of products. The cross-case analysis revealed the five barriers of the lack of internal awareness, lack of knowledge, lack of incentives, lack of feedback channels and non-supportive organisational structures, and the five enablers of business opportunities, integrated design processes, customers’ demand, laws, regulations and standards, and new technologies. To establish improved feedback from remanufacturing to product design, the barriers need to be addressed and the enablers explored. Thus, improved feedback from remanufacturing to product design will improve the design of future products suited for a more circular economy.
{"title":"Feedback from Remanufacturing: Its Unexploited Potential to Improve Future Product Design","authors":"Louise Lindkvist Haziri, E. Sundin, T. Sakao","doi":"10.3390/SU11154037","DOIUrl":"https://doi.org/10.3390/SU11154037","url":null,"abstract":"Company interest and research in the circular economy and remanufacturing have increased as a means of reducing negative environmental impacts. Remanufacturing is an industrial process whereby used products are returned to a state of like-new. However, few products are designed for remanufacturing, and further research and industrial efforts are needed to facilitate more widespread use of design for remanufacturing. One crucial factor facilitating design for remanufacturing is the integration of feedback in the product design process. Thus, the objective of this paper is to analyse feedback flows from remanufacturing to product design. Hence, a literature study and multiple case studies were conducted at three companies that design, manufacture and remanufacture different kinds of products. The cross-case analysis revealed the five barriers of the lack of internal awareness, lack of knowledge, lack of incentives, lack of feedback channels and non-supportive organisational structures, and the five enablers of business opportunities, integrated design processes, customers’ demand, laws, regulations and standards, and new technologies. To establish improved feedback from remanufacturing to product design, the barriers need to be addressed and the enablers explored. Thus, improved feedback from remanufacturing to product design will improve the design of future products suited for a more circular economy.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131093386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper, we relax the restriction on the identical distribution for the random utility parts under discrete choice models. The derived new choice model can allow more flexible substitution pattern, and has the potential to describe choice behavior more accurately. If an alternative's nominal utility is relatively high, its choice probability is higher when an individual uses its mean of utility in her choice process, whereas the choice probabilities for other alternatives are lower. We show that in the pricing problem the optimal prices are product-invariant for products with the same levels of utility uncertainty and use this result to simplify the multi-product pricing problem. We also characterize the oligopolistic problems for competition in price and choice probability respectively, and provide efficient algorithms to compute the Nash equilibrium. The assortment problem is generally NP-hard, so we develop a fully polynomial-time approximation scheme that can find an arbitrarily near-optimal solution in a timely manner. Surprisingly, if the utility of a product of the focal firm rather than the outside option is deterministic, the revenue-ordered assortment is optimal for the assortment problem. To implement the newly proposed choice model with different levels of utility uncertainty, we develop an efficient estimation algorithm with estimated product attractiveness in closed form. Several extensions are also considered, including relaxing the restriction under the multi-stage nested logit model.
{"title":"Discrete Choice Models with Different Levels of Utility Uncertainty","authors":"Ruxian Wang","doi":"10.2139/ssrn.3458759","DOIUrl":"https://doi.org/10.2139/ssrn.3458759","url":null,"abstract":"In this paper, we relax the restriction on the identical distribution for the random utility parts under discrete choice models. The derived new choice model can allow more flexible substitution pattern, and has the potential to describe choice behavior more accurately. If an alternative's nominal utility is relatively high, its choice probability is higher when an individual uses its mean of utility in her choice process, whereas the choice probabilities for other alternatives are lower. We show that in the pricing problem the optimal prices are product-invariant for products with the same levels of utility uncertainty and use this result to simplify the multi-product pricing problem. We also characterize the oligopolistic problems for competition in price and choice probability respectively, and provide efficient algorithms to compute the Nash equilibrium. The assortment problem is generally NP-hard, so we develop a fully polynomial-time approximation scheme that can find an arbitrarily near-optimal solution in a timely manner. Surprisingly, if the utility of a product of the focal firm rather than the outside option is deterministic, the revenue-ordered assortment is optimal for the assortment problem. To implement the newly proposed choice model with different levels of utility uncertainty, we develop an efficient estimation algorithm with estimated product attractiveness in closed form. Several extensions are also considered, including relaxing the restriction under the multi-stage nested logit model.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129392651","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Implementing certain lean methods or tools and blindly following the TPS principles doesn’t always promise success. Lean operations can even hide potential dangers as they are considered “high risk/high return ventures”. In fact, many companies have failed due to their inability to properly implement the lean philosophy and uncover its full potential. In reality, every production system is different and following the same lean principles will logically lead to different outcomes. In the given context, this paper will offer insights important for both practice and theory. Through the use of system dynamics, this research will suggest companies an approach that they can use in order to improve the overall performance of their production systems.
{"title":"Introduction Strategy for Lean Methods - System Dynamics Approach","authors":"Lyubomira Todorova","doi":"10.2139/ssrn.3909348","DOIUrl":"https://doi.org/10.2139/ssrn.3909348","url":null,"abstract":"Implementing certain lean methods or tools and blindly following the TPS principles doesn’t always promise success. Lean operations can even hide potential dangers as they are considered “high risk/high return ventures”. In fact, many companies have failed due to their inability to properly implement the lean philosophy and uncover its full potential. In reality, every production system is different and following the same lean principles will logically lead to different outcomes. In the given context, this paper will offer insights important for both practice and theory. Through the use of system dynamics, this research will suggest companies an approach that they can use in order to improve the overall performance of their production systems.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"26 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131726491","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Digital transformation in the era of Industry 4.0, with its revised, prescribed frameworks of practice, include those which are redefining the contextual characteristics that strongly advocate collaboration within the supply chain; and in doing so, see this element of the operations function as being an increasingly critical contributor to operational performance. We deepen the understanding of the concept and operationalization of the collaborative supply network in terms of it being a value ecosystem wherein value is captured and exploited within servitization practices (Baines & Lightfoot, 2013), as present within a mature public transport system.
{"title":"Industry 4.0: Exploring Collaborative Supply Networks from the Perspective of Servitization of a Mature Public Transport System","authors":"C. Ennis, N. Barnett","doi":"10.2139/ssrn.3532254","DOIUrl":"https://doi.org/10.2139/ssrn.3532254","url":null,"abstract":"Digital transformation in the era of Industry 4.0, with its revised, prescribed frameworks of practice, include those which are redefining the contextual characteristics that strongly advocate collaboration within the supply chain; and in doing so, see this element of the operations function as being an increasingly critical contributor to operational performance. We deepen the understanding of the concept and operationalization of the collaborative supply network in terms of it being a value ecosystem wherein value is captured and exploited within servitization practices (Baines & Lightfoot, 2013), as present within a mature public transport system.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-05-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127156245","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Classical inventory theory suggests that inventory plays a vital role in matching demand and supply. In this paper, we provide evidence that inventory can be used as a financial instrument to take advantage of arbitrage opportunities in financial markets with limited capital mobility. We develop a model based on prevalent industry practices in China to demonstrate how a firm can utilize the inventory of an imported product (typically a commodity) to carry lower-cost capital into a country with strict capital controls, and thus gain higher financial returns. We first use country-level data in China to show that the inventory levels of commodities are positively associated with the expected returns from financial arbitrage. We then utilize firm-level data from China’s metal processing industries (with metal commodities as their primary inputs) to empirically test several model predictions. We find that a higher expected return from financial arbitrage will incentivize a firm to increase its inventory level through increased short-term borrowing. In addition, firms with higher short-term borrowing capacity are more active in using inventory as a financial instrument to seek higher yields.
{"title":"Inventory as a Financial Instrument: Evidence from China’s Metal Industries","authors":"V. Hsu, Jing Wu","doi":"10.2139/ssrn.3382807","DOIUrl":"https://doi.org/10.2139/ssrn.3382807","url":null,"abstract":"Classical inventory theory suggests that inventory plays a vital role in matching demand and supply. In this paper, we provide evidence that inventory can be used as a financial instrument to take advantage of arbitrage opportunities in financial markets with limited capital mobility. We develop a model based on prevalent industry practices in China to demonstrate how a firm can utilize the inventory of an imported product (typically a commodity) to carry lower-cost capital into a country with strict capital controls, and thus gain higher financial returns. We first use country-level data in China to show that the inventory levels of commodities are positively associated with the expected returns from financial arbitrage. We then utilize firm-level data from China’s metal processing industries (with metal commodities as their primary inputs) to empirically test several model predictions. We find that a higher expected return from financial arbitrage will incentivize a firm to increase its inventory level through increased short-term borrowing. In addition, firms with higher short-term borrowing capacity are more active in using inventory as a financial instrument to seek higher yields.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129757706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In a hybrid-format supply chain, an intermediary serves as a reseller as well as a marketplace. This paper studies the intermediary’s incentive to share the privately observed demand in- formation with its upstream supplier when the supplier can also engage in the marketplace offered by the intermediary in a hybrid-format model. Conventional wisdom suggests that an intermediary is averse to sharing the demand information with its supplier due to the double marginalization effect of information sharing. We show that an intermediary may voluntarily establish an information sharing channel with its supplier when the intermediary engages in a hybrid-format supply chain. The intuition is that information sharing shifts power upstream, which enhances the supplier’s incentive to engage in the marketplace. The intermediary benefits from the lessened double marginalization effect and revenue sharing from the marketplace. This strategic role of information sharing is in contrast to most previous literature. We also find that when the proportional fee is not high, the supplier prefers to engage in the marketplace regardless of channel substitutability; when the proportional fee and channel substitutability is high, the intermediary withholds information and the supplier only resells through the intermediary. Our findings not only complement the emerging hybrid-format model literature but also develop relatively new insights on information sharing issue in the supply chain.
{"title":"Information Sharing in the Hybrid-Format Supply Chain","authors":"Yuansheng Wei, Pei Huang","doi":"10.2139/ssrn.3301639","DOIUrl":"https://doi.org/10.2139/ssrn.3301639","url":null,"abstract":"In a hybrid-format supply chain, an intermediary serves as a reseller as well as a marketplace. This paper studies the intermediary’s incentive to share the privately observed demand in- formation with its upstream supplier when the supplier can also engage in the marketplace offered by the intermediary in a hybrid-format model. Conventional wisdom suggests that an intermediary is averse to sharing the demand information with its supplier due to the double marginalization effect of information sharing. We show that an intermediary may voluntarily establish an information sharing channel with its supplier when the intermediary engages in a hybrid-format supply chain. The intuition is that information sharing shifts power upstream, which enhances the supplier’s incentive to engage in the marketplace. The intermediary benefits from the lessened double marginalization effect and revenue sharing from the marketplace. This strategic role of information sharing is in contrast to most previous literature. We also find that when the proportional fee is not high, the supplier prefers to engage in the marketplace regardless of channel substitutability; when the proportional fee and channel substitutability is high, the intermediary withholds information and the supplier only resells through the intermediary. Our findings not only complement the emerging hybrid-format model literature but also develop relatively new insights on information sharing issue in the supply chain.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121438787","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-12-11DOI: 10.31014/AIOR.1992.01.04.52
Shaharia Pavel
Thought of Circular economy (CE) or circularity is widely accepted by corporations, academics and social & environmental concern individuals and organizations that create new opportunities & challenges to adapt and practicing in industry and customers. This model is sustainable in terms of a win-win situation from producers' and customers' ends; both are benefited from value proposition to consumption by ensuring economic, social and environmental well-being. The circular economy is all about circularity, and execution in the value chain. This research has been conducted by the qualitative method through mini literature review, studying business case, stakeholders' website, books, and journals. This paper aims to draw a framework of circularity in the value chain and to understand how circularity works in it and stimulates organizations to gain competitiveness and sustainability.
{"title":"Circular Economy: The Beauty of Circularity in Value Chain","authors":"Shaharia Pavel","doi":"10.31014/AIOR.1992.01.04.52","DOIUrl":"https://doi.org/10.31014/AIOR.1992.01.04.52","url":null,"abstract":"Thought of Circular economy (CE) or circularity is widely accepted by corporations, academics and social & environmental concern individuals and organizations that create new opportunities & challenges to adapt and practicing in industry and customers. This model is sustainable in terms of a win-win situation from producers' and customers' ends; both are benefited from value proposition to consumption by ensuring economic, social and environmental well-being. The circular economy is all about circularity, and execution in the value chain. This research has been conducted by the qualitative method through mini literature review, studying business case, stakeholders' website, books, and journals. This paper aims to draw a framework of circularity in the value chain and to understand how circularity works in it and stimulates organizations to gain competitiveness and sustainability.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"40 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-12-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133093183","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2018-08-01DOI: 10.1016/J.PROMFG.2018.03.142
R. Esmaeel, N. Zakuan, N. M. Jamal, Hamed Taherdoost
{"title":"Understanding of Business Performance from the Perspective of Manufacturing Strategies; Fit Manufacturing and Overall Equipment Effectiveness","authors":"R. Esmaeel, N. Zakuan, N. M. Jamal, Hamed Taherdoost","doi":"10.1016/J.PROMFG.2018.03.142","DOIUrl":"https://doi.org/10.1016/J.PROMFG.2018.03.142","url":null,"abstract":"","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"24 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132301246","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. Muruganandham, J. Dinesh, A. Basha, Venkatesh Kannan
In any organization, shop floor control seems to be a vital and pivotal activity and effective shop floor control paves the way for cent percent production. Effective utilization of resources, proper production planning, and successful maintenance would always pave the way for high productivity which in turn fulfills the commitment to meet out the delivery schedule for customers. Hence it is understood that continuous and consistent shop floor management demands a serious focus that contributes to sound operations management. More developments have taken place in the recent decade in framing new methodologies and adopting new advanced techniques to control the shop floor activities of an organization. The purposes of our paper is to bring out a new model for shop floor control using the Fuzzy Logic Decision Taking technique to help the operations professionals to enable them for successful professional decision making in shop floor control. Multi-Criteria Decision Making (MCDM) Techniques have witnessed tremendous application in operations management. Our paper has successfully attempted to apply Fuzzy Logic Decision-Making Technique which is one among the various MCDM tools. The technique considers many factors like Production, Wastages, Breakdown or Idle Time etc and these factors are treated as criteria and upon using the tool, the Management Information System(MIS) reports generated after mathematical manipulation using Fuzzy Logic seems to be much useful for corporate decision making.
{"title":"An Efficient Operations Management Strategy Using Fuzzy Logic Decision Making Based Shop Floor Control Technique","authors":"R. Muruganandham, J. Dinesh, A. Basha, Venkatesh Kannan","doi":"10.2139/ssrn.3217427","DOIUrl":"https://doi.org/10.2139/ssrn.3217427","url":null,"abstract":"In any organization, shop floor control seems to be a vital and pivotal activity and effective shop floor control paves the way for cent percent production. Effective utilization of resources, proper production planning, and successful maintenance would always pave the way for high productivity which in turn fulfills the commitment to meet out the delivery schedule for customers. Hence it is understood that continuous and consistent shop floor management demands a serious focus that contributes to sound operations management. More developments have taken place in the recent decade in framing new methodologies and adopting new advanced techniques to control the shop floor activities of an organization. The purposes of our paper is to bring out a new model for shop floor control using the Fuzzy Logic Decision Taking technique to help the operations professionals to enable them for successful professional decision making in shop floor control. Multi-Criteria Decision Making (MCDM) Techniques have witnessed tremendous application in operations management. Our paper has successfully attempted to apply Fuzzy Logic Decision-Making Technique which is one among the various MCDM tools. The technique considers many factors like Production, Wastages, Breakdown or Idle Time etc and these factors are treated as criteria and upon using the tool, the Management Information System(MIS) reports generated after mathematical manipulation using Fuzzy Logic seems to be much useful for corporate decision making.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"116 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-07-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123064808","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Problem definition: Online retailers disclose product availability to influence customer decisions as a form of pressure selling designed to compel customers to rush into a purchase. Can the revelation of this information drive sales and profitability? We study the effect of disclosing product availability on market outcomes—product sales and returns—and identify the contexts where this effect is most powerful. Academic/practical relevance: Increasing sell-out is key for online retailers to remain profitable in the presence of thin margins and complex operations. We provide insights into how their information-disclosure policy—something they can tailor at virtually no cost—can contribute to this important objective. Methodology: We collaborate with an online retailer to procure a year of transaction data on 190,696 products that span 1,290 brands and 472,980 customers. To causally identify our results, we use a generalized difference-in-differences design with matching that exploits one policy of the firm: it discloses product availability only for the last five units. Results: The disclosure of low product availability increases hourly sales—they grow by 13.6%—but these products are more likely to be returned—product return rates increase by 17.0%. Because returns are costly, we also study net sales—product hourly sales minus hourly returns—which increase by 12.5% after the retailer reveals low availability. Managerial implications: The positive effects on sales and profitability amplify over wide assortments and when low-availability signals are abundantly visible and disclosed for deeply discounted products whose sales season is about to end. In addition, we propose a data-driven policy that exploits these results by using machine learning to prescribe the timing of disclosure of scarcity signals in order to boost sales without spiking returns.
{"title":"Disclosing Product Availability in Online Retail","authors":"E. Calvo, Ruomeng Cui, Laura Wagner","doi":"10.2139/ssrn.3195047","DOIUrl":"https://doi.org/10.2139/ssrn.3195047","url":null,"abstract":"Problem definition: Online retailers disclose product availability to influence customer decisions as a form of pressure selling designed to compel customers to rush into a purchase. Can the revelation of this information drive sales and profitability? We study the effect of disclosing product availability on market outcomes—product sales and returns—and identify the contexts where this effect is most powerful. Academic/practical relevance: Increasing sell-out is key for online retailers to remain profitable in the presence of thin margins and complex operations. We provide insights into how their information-disclosure policy—something they can tailor at virtually no cost—can contribute to this important objective. Methodology: We collaborate with an online retailer to procure a year of transaction data on 190,696 products that span 1,290 brands and 472,980 customers. To causally identify our results, we use a generalized difference-in-differences design with matching that exploits one policy of the firm: it discloses product availability only for the last five units. Results: The disclosure of low product availability increases hourly sales—they grow by 13.6%—but these products are more likely to be returned—product return rates increase by 17.0%. Because returns are costly, we also study net sales—product hourly sales minus hourly returns—which increase by 12.5% after the retailer reveals low availability. Managerial implications: The positive effects on sales and profitability amplify over wide assortments and when low-availability signals are abundantly visible and disclosed for deeply discounted products whose sales season is about to end. In addition, we propose a data-driven policy that exploits these results by using machine learning to prescribe the timing of disclosure of scarcity signals in order to boost sales without spiking returns.","PeriodicalId":369181,"journal":{"name":"Operations Strategy eJournal","volume":"108 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131587881","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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