Problem definition: Do the benefits of operational transparency depend on when the work is done? Academic/practical relevance: This work connects the operations management literature on operational transparency with the psychology literature on the peak-end effect. Methodology: This study examines how customers respond to operational transparency with parcel delivery data from the Cainiao Network, the logistics arm of Alibaba. The sample comprises 4.68 million deliveries. Each delivery has between 4 and 10 track-package activities, which customers can check in real time, and a delivery service score, which customers leave after receiving the package. Instrumental-variable regressions quantify the causal effect of track-package-activity times on delivery scores. Results: The regressions suggest that customers punish early idleness less than late idleness, leaving higher delivery service scores when track-package activities cluster toward the end of the shipping horizon. For example, if a shipment takes 100 hours, then delaying the time of the average action from hour 20 to hour 80 increases the expected delivery score by approximately the same amount as expediting the arrival time from hour 100 to hour 73. Managerial implications: Memory limitations make customers especially sensitive to how service operations end.
{"title":"Operational Transparency: Showing When Work Gets Done","authors":"R. Bray","doi":"10.2139/ssrn.3215560","DOIUrl":"https://doi.org/10.2139/ssrn.3215560","url":null,"abstract":"Problem definition: Do the benefits of operational transparency depend on when the work is done? Academic/practical relevance: This work connects the operations management literature on operational transparency with the psychology literature on the peak-end effect. Methodology: This study examines how customers respond to operational transparency with parcel delivery data from the Cainiao Network, the logistics arm of Alibaba. The sample comprises 4.68 million deliveries. Each delivery has between 4 and 10 track-package activities, which customers can check in real time, and a delivery service score, which customers leave after receiving the package. Instrumental-variable regressions quantify the causal effect of track-package-activity times on delivery scores. Results: The regressions suggest that customers punish early idleness less than late idleness, leaving higher delivery service scores when track-package activities cluster toward the end of the shipping horizon. For example, if a shipment takes 100 hours, then delaying the time of the average action from hour 20 to hour 80 increases the expected delivery score by approximately the same amount as expediting the arrival time from hour 100 to hour 73. Managerial implications: Memory limitations make customers especially sensitive to how service operations end.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"50 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2019-04-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90611474","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In consumer-to-consumer online platforms that enable selling (e.g., eBay, Taobao) or sharing (e.g., Airbnb, Uber) of goods and services, information asymmetry between providers (e.g., sellers, hosts, drivers) and consumers (e.g., buyers, guests, passengers) pose challenges. Such platforms facilitate transactions between users (providers and consumers), who are often strangers. Stricter screening, background cheeks, and identity verification requirements may reduce the probability of bad users entering the platform. However, users are reluctant to share personal information on the internet. We design a matching mechanism to maximise platform profit when users are heterogeneous with some more likely to be good than others, but the platform does not know who. We argue that in some cases, the platform increases its profit by allowing users with a higher probability of being bad to join as well.
{"title":"Screening Mechanism When Online Users Have Privacy Concerns","authors":"Jagan Jacob","doi":"10.2139/ssrn.3373110","DOIUrl":"https://doi.org/10.2139/ssrn.3373110","url":null,"abstract":"In consumer-to-consumer online platforms that enable selling (e.g., eBay, Taobao) or sharing (e.g., Airbnb, Uber) of goods and services, information asymmetry between providers (e.g., sellers, hosts, drivers) and consumers (e.g., buyers, guests, passengers) pose challenges. Such platforms facilitate transactions between users (providers and consumers), who are often strangers. Stricter screening, background cheeks, and identity verification requirements may reduce the probability of bad users entering the platform. However, users are reluctant to share personal information on the internet. We design a matching mechanism to maximise platform profit when users are heterogeneous with some more likely to be good than others, but the platform does not know who. We argue that in some cases, the platform increases its profit by allowing users with a higher probability of being bad to join as well.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"44 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2019-04-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86067728","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider a two-tier inventory management system with one retailer and one supplier. The retailer serves a demand driven by a stationary moving average process (of possibly in nite order) and places periodic inventory replenishment orders to the supplier. In this setting, we study the interplay between information sharing and order smoothing under the assumption that rms' inventory cost parameters (e.g., per unit holding and backordering costs) are functions of two forms of supply chain variability: (i) on-hand inventory variability and (ii) replenishment order variability. We show that there is a natural tension between these two sources of variability and characterize a Pareto frontier" between them by identifying optimal inventory replenishment strategies that trade-o one type of variability for the other in a cost efficient way. For the case in which the retailer is able to share her complete demand history, we provide a full characterization of the efficient frontier, as well as of an optimal replenishment policy. On the other hand, when the retailer is not able (or willing) to share any demand information we provide a partial characterization of an optimal solution and show that information sharing does not always add value.We also show that the question of identifying conditions under which information sharing does o er value reduces to a delicate analysis of the invertibility (in a time series sense) of a specific stationary process.
{"title":"Inventory Policies and Information Sharing: An Efficient Frontier Approach","authors":"René Caldentey, Avi Giloni, C. Hurvich","doi":"10.2139/ssrn.3333371","DOIUrl":"https://doi.org/10.2139/ssrn.3333371","url":null,"abstract":"We consider a two-tier inventory management system with one retailer and one supplier. The \u0000retailer serves a demand driven by a stationary moving average process (of possibly in nite order) and places periodic inventory replenishment orders to the supplier. In this setting, we study the interplay between information sharing and order smoothing under the assumption that rms' inventory cost parameters (e.g., per unit holding and backordering costs) are functions of two forms of supply chain variability: (i) on-hand inventory variability and (ii) replenishment order variability. We show that there is a natural tension between these two sources of variability and characterize a Pareto frontier\" between them by identifying optimal inventory replenishment strategies that trade-o one type of variability for the other in a cost efficient way. For the case in which the retailer is able to share her complete demand history, we provide a full characterization of the efficient frontier, as well as of an optimal replenishment policy. On the other hand, when the retailer is not able (or willing) to share any demand information we provide a partial characterization of an optimal solution and show that information sharing does not always add value.We also show that the question of identifying conditions under which information sharing does o er value reduces to a delicate analysis of the invertibility (in a time series sense) of a specific stationary process.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"27 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2019-02-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84415223","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Purpose . The article is aimed at designing a control system for the parameters of a production line for an enterprise with a straight flow method of organizing production. Methodology . The production line at the enterprise with a straight flow method of organizing production is a complex dynamic distributed system. The flow route for manufacturing a product for many modern enterprises contains several hundreds of technological operations, in the inter-operating reserve each of which there are thousands of products waiting to be processed. The flow routes of different parts of the same type of products intersect (re-entrant manufacturing systems). This leads to the fact that the distribution of subjects of labor along the technological route has a significant impact on the throughput capacity of the production line. To describe such systems, a new class of production line models (PDE-model) has been introduced. To describe the behavior of the flow parameters of the production line, a production line model containing partial differential equations (PDE model) was used. The PDE-model of the production line is built in the article, the flow parameters of which depend on the value of utilization rate of the technological equipment for each operation. Findings . The authors obtained the optimal control of the flow parameters of the production line, which is based on the algorithm for changing the utilization rate of the technological equipment of the production line. The single-shift working time pattern is considered as a basic regulatory treatment of the production line operation. To simulate the work of technological equipment after the shift, the generalized Dirac function was used. Originality consists in the development of a method for designing control systems for the parameters of the production line of enterprises with a straight flow method of organizing production based on the PDE-model of the control object. The authors proposed a method for constructing an optimal control of the parameters of the production line through the control of the utilization rate of the technological equipment. When designing a control system, the production line is represented by a dynamic system with distributed flow parameters. Practical value . The proposed method for designing a control system for the flow parameters of a production line can be used as the basis for designing highly efficient production flow control systems for enterprises manufacturing semiconductor products of the automobile industry.
{"title":"Распределенная динамическая PDE-модель программного управления загрузкой технологического оборудования производственной линии (Distributed Dynamic PDE-Model of Program Control by Utilization of the Technological Equipment of Production Line)","authors":"G. K. Kozevnikov, O. Pihnastyi","doi":"10.15802/STP2019/159489","DOIUrl":"https://doi.org/10.15802/STP2019/159489","url":null,"abstract":"Purpose . The article is aimed at designing a control system for the parameters of a production line for an enterprise with a straight flow method of organizing production. Methodology . The production line at the enterprise with a straight flow method of organizing production is a complex dynamic distributed system. The flow route for manufacturing a product for many modern enterprises contains several hundreds of technological operations, in the inter-operating reserve each of which there are thousands of products waiting to be processed. The flow routes of different parts of the same type of products intersect (re-entrant manufacturing systems). This leads to the fact that the distribution of subjects of labor along the technological route has a significant impact on the throughput capacity of the production line. To describe such systems, a new class of production line models (PDE-model) has been introduced. To describe the behavior of the flow parameters of the production line, a production line model containing partial differential equations (PDE model) was used. The PDE-model of the production line is built in the article, the flow parameters of which depend on the value of utilization rate of the technological equipment for each operation. Findings . The authors obtained the optimal control of the flow parameters of the production line, which is based on the algorithm for changing the utilization rate of the technological equipment of the production line. The single-shift working time pattern is considered as a basic regulatory treatment of the production line operation. To simulate the work of technological equipment after the shift, the generalized Dirac function was used. Originality consists in the development of a method for designing control systems for the parameters of the production line of enterprises with a straight flow method of organizing production based on the PDE-model of the control object. The authors proposed a method for constructing an optimal control of the parameters of the production line through the control of the utilization rate of the technological equipment. When designing a control system, the production line is represented by a dynamic system with distributed flow parameters. Practical value . The proposed method for designing a control system for the flow parameters of a production line can be used as the basis for designing highly efficient production flow control systems for enterprises manufacturing semiconductor products of the automobile industry.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"13 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2019-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89572923","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Multiple online channels allow a retailer to cover a wider range of situational purchase settings but also expose it to a more complex spectrum of consumer purchase behavior. Compared with the conventional desktop computer-based Web channel, the mobile-based application channel enables retailers to understand consumers better and, also, makes them more vulnerable to impulse purchases. The unique features of consumer experience and purchase behavior in each online channel raise the question of whether these channels should be managed jointly or separately. This study seeks to identify retail settings that favor a particular organizational choice. The extant literature on multi-channel retail has paid scant attention to differences between these primary online channels. Our study helps to fill this gap, and it aims to equip retailers with a simple tool for comparing the organization's choices with regard to managing sales across the two channels. We build a parsimonious model that captures key aspects of consumers' impulsive purchase behavior across various product types and two different online channels. In this model, the consumer's utility from purchasing a product via a particular channel consists of two correlated components: a channel-independent "base'' component and a channel-specific "impulsive'' component. We use this model to examine retailer performance when pricing is delegated to managers under separate-channel and joint-channel management schemes. We find that products which induce impulsive purchase behavior strongly correlated with the base product valuation, such as high-value hedonic products, favor the joint-channel setup. In contrast, products with strong negative correlation between the base and impulsive valuation components, such as high-end durables, do better under separate-channel management. Online retailers should carefully curate their delegation strategies to manage the interplay between channels' natural differences and the product characteristics that shape how consumers' impulsive purchase behavior is related to their base valuations.
{"title":"Managing Impulsive Purchases in Multi-Channel Online Retailing: Product Categories and Organizational Choices","authors":"Nitish Jain, Sergei Savin, Narendra Singh","doi":"10.2139/ssrn.3306898","DOIUrl":"https://doi.org/10.2139/ssrn.3306898","url":null,"abstract":"Multiple online channels allow a retailer to cover a wider range of situational purchase settings but also expose it to a more complex spectrum of consumer purchase behavior. Compared with the conventional desktop computer-based Web channel, the mobile-based application channel enables retailers to understand consumers better and, also, makes them more vulnerable to impulse purchases. The unique features of consumer experience and purchase behavior in each online channel raise the question of whether these channels should be managed jointly or separately. This study seeks to identify retail settings that favor a particular organizational choice. \u0000 \u0000The extant literature on multi-channel retail has paid scant attention to differences between these primary online channels. Our study helps to fill this gap, and it aims to equip retailers with a simple tool for comparing the organization's choices with regard to managing sales across the two channels. \u0000 \u0000We build a parsimonious model that captures key aspects of consumers' impulsive purchase behavior across various product types and two different online channels. In this model, the consumer's utility from purchasing a product via a particular channel consists of two correlated components: a channel-independent \"base'' component and a channel-specific \"impulsive'' component. We use this model to examine retailer performance when pricing is delegated to managers under separate-channel and joint-channel management schemes. \u0000 \u0000We find that products which induce impulsive purchase behavior strongly correlated with the base product valuation, such as high-value hedonic products, favor the joint-channel setup. In contrast, products with strong negative correlation between the base and impulsive valuation components, such as high-end durables, do better under separate-channel management. Online retailers should carefully curate their delegation strategies to manage the interplay between channels' natural differences and the product characteristics that shape how consumers' impulsive purchase behavior is related to their base valuations.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"20 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86261241","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper draws on word embedding and community discovery algorithms to allow researchers to easily and effectively gather information on markets for remanufactured and refurbished products. Off-the-shelf, pre-trained vectors created using word embedding are employed and neither input on remanufacturing or related concepts (e.g., data or corpus containing specific information on product remanufacturing) nor human interactions are required. The study’s outcomes have implications for academics and practitioners alike. First, environmental concerns only weakly appear in the discourse on product remanufacturing and refurbishing. Second, the terms remanufactured and refurbished are strongly associated with product type. Third, product remanufacturing is associated with industries such as car parts and printers, in both the B2B and B2C markets. Fourth, product refurbishing is associated mostly with consumer electronics and predominantly the B2C markets.Fifth, in the remanufacturing/refurbishing business, OEMs’ presence is more salient than that of independent remanufacturers. Sixth, the salience of Japanese and US OEMs is higher than that of OEMs based elsewhere. OEMs that manufacture printing equipment, cars and consumer electronics are the most salient. By contrasting the CSLC academic literature with the clusters obtained through big data analysis, this study also identifies products and brands that are understudied in the academic literature.
{"title":"Using Word Embedding and Community Discovery to Understand the Market for Remanufactured and Refurbished Products","authors":"J. Quariguasi Frota Neto","doi":"10.2139/ssrn.3328475","DOIUrl":"https://doi.org/10.2139/ssrn.3328475","url":null,"abstract":"This paper draws on word embedding and community discovery algorithms to allow researchers to easily and effectively gather information on markets for remanufactured and refurbished products. Off-the-shelf, pre-trained vectors created using word embedding are employed and neither input on remanufacturing or related concepts (e.g., data or corpus containing specific information on product remanufacturing) nor human interactions are required. The study’s outcomes have implications for academics and practitioners alike. First, environmental concerns only weakly appear in the discourse on product remanufacturing and refurbishing. Second, the terms remanufactured and refurbished are strongly associated with product type. Third, product remanufacturing is associated with industries such as car parts and printers, in both the B2B and B2C markets. Fourth, product refurbishing is associated mostly with consumer electronics and predominantly the B2C markets.Fifth, in the remanufacturing/refurbishing business, OEMs’ presence is more salient than that of independent remanufacturers. Sixth, the salience of Japanese and US OEMs is higher than that of OEMs based elsewhere. OEMs that manufacture printing equipment, cars and consumer electronics are the most salient. By contrasting the CSLC academic literature with the clusters obtained through big data analysis, this study also identifies products and brands that are understudied in the academic literature.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"50 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78275888","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper exploits the insolvency announcement of Hanjin Shipping in 2016 to study the causal effects of supply chain disruptions on firm outcomes and sourcing behavior. This insolvency announcement stranded cargo in transit as ports refused to unload Hanjin vessels. Over 8,300 cargo owners and $14 billion USD of cargo were affected by this announcement. I use a novel dataset that links 5 million shipments from U.S. Customs with real-time vessel movement data to identify impacted firms and the distribution of cargo delays to study their causal effects. I present four key findings. First, I show that disruptions to the flow of inventory - characterized by uncertainty in resolution - can drive firms to place large panic orders. Second, I provide novel evidence that pre-existing supply chain redundancies can benefit firms during disruptions as hedging tools. Third, I show that supply chain disruptions can cause firms to modify future sourcing strategies. Finally, instrumenting for the increases in inventory with disruption variables, I re-examine the link between excess inventory and abnormal stock returns. In contrast to prior work, I find no such associations.
{"title":"Supply Chain Disruptions: Evidence from the Bankruptcy of Hanjin Shipping","authors":"Caleb Kwon","doi":"10.2139/ssrn.3293272","DOIUrl":"https://doi.org/10.2139/ssrn.3293272","url":null,"abstract":"This paper exploits the insolvency announcement of Hanjin Shipping in 2016 to study the causal effects of supply chain disruptions on firm outcomes and sourcing behavior. This insolvency announcement stranded cargo in transit as ports refused to unload Hanjin vessels. Over 8,300 cargo owners and $14 billion USD of cargo were affected by this announcement. I use a novel dataset that links 5 million shipments from U.S. Customs with real-time vessel movement data to identify impacted firms and the distribution of cargo delays to study their causal effects. I present four key findings. First, I show that disruptions to the flow of inventory - characterized by uncertainty in resolution - can drive firms to place large panic orders. Second, I provide novel evidence that pre-existing supply chain redundancies can benefit firms during disruptions as hedging tools. Third, I show that supply chain disruptions can cause firms to modify future sourcing strategies. Finally, instrumenting for the increases in inventory with disruption variables, I re-examine the link between excess inventory and abnormal stock returns. In contrast to prior work, I find no such associations.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"1 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-11-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91208152","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bioattacks, i.e., the intentional release of pathogens or biotoxins against humans to cause serious illness and death, pose a significant threat to public health and safety due to the availability of pathogens worldwide, scale of impact, and short treatment time window. In this paper, we focus on the problem of prepositioning inventory of medical countermeasures (MCM) to defend against such bioattacks. We introduce a two-stage robust optimization model that considers the policymaker’s static inventory decision, attacker’s move, and policymaker’s adjustable shipment decision, so as to minimize inventory and life loss costs, subject to population survivability targets. We consider a heuristic solution approach that limits the adjustable decisions to be affine, which allows us to cast the problem as a tractable linear optimization problem. We prove that, under mild assumptions, the heuristic is in fact optimal. Experimental evidence suggests that the heuristic’s performance remains near-optimal for general settings as well. We illustrate how our model can serve as a decision support tool for policy making. In particular, we perform a thorough case study on how to preposition MCM inventory in the United States to guard against anthrax attacks. We calibrate our model using data from multiple sources, including publications of the National Academies of Sciences and the U.S. Census. We find that, for example, if U.S. policymakers want to ensure a 95% survivability target for anthrax attacks that simultaneously affect at most two cities (in the same or different states), the minimum annual inventory budget required is approximately $330 million. We also discuss how our model can be applied in other contexts as well, e.g., to analyze safety-stock placement in supply-chain networks to hedge against disruptions.
{"title":"Designing Response Supply Chain against Bioattacks","authors":"D. Simchi-Levi, Nikolaos Trichakis, P. Zhang","doi":"10.2139/ssrn.2832329","DOIUrl":"https://doi.org/10.2139/ssrn.2832329","url":null,"abstract":"Bioattacks, i.e., the intentional release of pathogens or biotoxins against humans to cause serious illness and death, pose a significant threat to public health and safety due to the availability of pathogens worldwide, scale of impact, and short treatment time window. In this paper, we focus on the problem of prepositioning inventory of medical countermeasures (MCM) to defend against such bioattacks. We introduce a two-stage robust optimization model that considers the policymaker’s static inventory decision, attacker’s move, and policymaker’s adjustable shipment decision, so as to minimize inventory and life loss costs, subject to population survivability targets. We consider a heuristic solution approach that limits the adjustable decisions to be affine, which allows us to cast the problem as a tractable linear optimization problem. We prove that, under mild assumptions, the heuristic is in fact optimal. Experimental evidence suggests that the heuristic’s performance remains near-optimal for general settings as well. We illustrate how our model can serve as a decision support tool for policy making. In particular, we perform a thorough case study on how to preposition MCM inventory in the United States to guard against anthrax attacks. We calibrate our model using data from multiple sources, including publications of the National Academies of Sciences and the U.S. Census. We find that, for example, if U.S. policymakers want to ensure a 95% survivability target for anthrax attacks that simultaneously affect at most two cities (in the same or different states), the minimum annual inventory budget required is approximately $330 million. We also discuss how our model can be applied in other contexts as well, e.g., to analyze safety-stock placement in supply-chain networks to hedge against disruptions.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"45 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88201810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Taylor Guitars purchased an ebony mill in Cameroon to ensure corporate social and environmental responsibility (CSER) in sourcing, and shared the responsibly-sourced supply of ebony with competitors through horizontal sourcing. Inspired by this case, we investigate vertical integration as an alternative strategy for CSER in sourcing in which a firm can vertically integrate with its supplier in order to ensure responsible practices in the supply chain. In a competitive setting, an exposed CSER violation in one supply chain may increase the competing supply chain’s demand (positive externalities) due to substitution, or decrease the competing supply chain’s demand (negative externalities) due to public’s suspicion about industry’s social and environmental practices. Furthermore, NGOs’ scrutiny and reporting policies may influence the chance of a violation exposure, as well as demand externalities between the competing supply chains. We examine horizontal sourcing as a potential strategy for mitigating the impact of a CSER externality caused by a competing supply chain. When horizontal sourcing is infeasible, we find that higher violation exposure externalities induces better CSER, but overly intensive violation scrutiny alongside strongly negative externalities may backfire and discourage CSER. By contrast, when horizontal sourcing is feasible, intensive violation scrutiny induces CSER, but strongly positive externalities may impair industry-wide CSER. These findings have instructive implications for firms interested in ensuring CSER in their supply chain, as well as for NGOs’ violation scrutiny and reporting policies.
Taylor Guitars在喀麦隆购买了一家乌木工厂，以确保采购中的企业社会和环境责任(CSER)，并通过横向采购与竞争对手分享负责任的乌木供应。受此案例的启发，我们研究了垂直整合作为CSER采购的一种替代策略，在这种策略中，公司可以与其供应商垂直整合，以确保供应链中的负责任行为。在竞争环境中，一条供应链中暴露的CSER违规行为可能会由于替代而增加竞争供应链的需求(正外部性)，或者由于公众对行业社会和环境实践的怀疑而减少竞争供应链的需求(负外部性)。此外，非政府组织的审查和报告政策可能会影响违规曝光的机会，以及竞争供应链之间的需求外部性。我们研究了横向采购作为一种潜在的策略，以减轻竞争供应链造成的CSER外部性的影响。当横向采购不可行时，我们发现更高的违规暴露外部性会导致更好的CSER，但过度密集的违规审查以及强烈的负面外部性可能会适得其反并阻碍CSER。相比之下，当横向采购可行时，密集的违规审查会产生CSER，但强烈的正外部性可能会损害整个行业的CSER。这些发现对有意确保供应链中的CSER的公司以及非政府组织的违规审查和报告政策具有指导意义。
{"title":"Ensuring Corporate Social and Environmental Responsibility through Vertical Integration and Horizontal Sourcing","authors":"Adem Orsdemir, B. Hu, V. Deshpande","doi":"10.2139/ssrn.2630733","DOIUrl":"https://doi.org/10.2139/ssrn.2630733","url":null,"abstract":"Taylor Guitars purchased an ebony mill in Cameroon to ensure corporate social and environmental responsibility (CSER) in sourcing, and shared the responsibly-sourced supply of ebony with competitors through horizontal sourcing. Inspired by this case, we investigate vertical integration as an alternative strategy for CSER in sourcing in which a firm can vertically integrate with its supplier in order to ensure responsible practices in the supply chain. In a competitive setting, an exposed CSER violation in one supply chain may increase the competing supply chain’s demand (positive externalities) due to substitution, or decrease the competing supply chain’s demand (negative externalities) due to public’s suspicion about industry’s social and environmental practices. Furthermore, NGOs’ scrutiny and reporting policies may influence the chance of a violation exposure, as well as demand externalities between the competing supply chains. We examine horizontal sourcing as a potential strategy for mitigating the impact of a CSER externality caused by a competing supply chain. When horizontal sourcing is infeasible, we find that higher violation exposure externalities induces better CSER, but overly intensive violation scrutiny alongside strongly negative externalities may backfire and discourage CSER. By contrast, when horizontal sourcing is feasible, intensive violation scrutiny induces CSER, but strongly positive externalities may impair industry-wide CSER. These findings have instructive implications for firms interested in ensuring CSER in their supply chain, as well as for NGOs’ violation scrutiny and reporting policies.","PeriodicalId":49886,"journal":{"name":"Manufacturing Engineering","volume":"107 1","pages":""},"PeriodicalIF":0.3,"publicationDate":"2018-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89977711","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"工程技术","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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