An Information‐Processing Approach for Evaluating In‐Store Retail Operational Design Strategies

We develop a model to evaluate retail store operational design strategies using an information‐processing perspective of organizational design. We propose that three model constructs pertaining to in‐store shopper task uncertainty—the product mix complexity, the service production complexity, and the product mix changeover—create shopper encounter information requirements (IR). These requirements can be met using specific retail service operational design choices for managing shopper encounters, namely, designing layouts for self‐service (SS) and providing employees with task empowerment (TE). The model is then operationalized using a two‐stage approach to develop new multi‐item, measurement scales. The psychometric properties and predictive validity of the scales and model are then confirmed by using structural equation modeling with survey data from 175 merchandise retail store managers. We find that our model can be generically applied across the retail industry to understand how shopper encounter IR motivate retailer store design choices and can be used to determine whether to design stores for SS or to provide store employees with TE. We then evaluate the efficacy of the studied store design choices on customer delivery satisfaction, and offer some suggestions for future research.     

Decision Bias in Capacity Allocation Games with Uncertain Demand

Existing studies on capacity allocation games have demonstrated that the standard Nash theory exaggerates retailers' tendency of ordering more than they need in the situation of supply shortage. Adding to the results in the literature, our experimental study with consideration of demand uncertainty demonstrates that the standard Nash theory also exaggerates retailers' tendency of telling the truth in their ordering strategy. To account for these systematic biases, based on the quantal response equilibrium framework, we develop a behavioral model with different mental weights on the underage and overage costs to characterize a retailer's perception bias regarding a critical fractile. Based on the parameter estimates, we show that retailers perceive the critical fractile as being closer to 0.5 than it is, and the perceived critical fractile increases over time. Such empirical evidence of retailers' behavior in capacity allocation games can be valuable, for example, in the mechanism design of coordination and in improving supply chain performance.     

Channel Strategies and Stocking Policies in Uncapacitated and Capacitated Supply Chains*

A supply chain consisting of a single supplier distributing two independent products through multiple retailers is analyzed in this paper. The supplier needs to incentivize its retailers to adopt stocking policies that are mutually advantageous and that result in the optimal level of market coverage. The focus is on determining the optimal stocking policies for retailers and the resulting distribution strategy given that the supplier has either unlimited or limited capacity. The results provide insights on the optimal distribution strategy and stocking policies for the supply chain. In general, the paper shows that it is optimal for the supplier to use an intensive distribution strategy (i.e., the products are stocked by all retailers). Selective or exclusive strategies are optimal only when retailers are risk averse, stocking synergies exist, and there are differences in demand or supply uncertainties across products. The analysis also shows that retailers hold larger stocks of a product which generates higher supplier margins but only when the supplier has unlimited capacity. If the supplier has limited capacity, then their margins have no effect on retailers' stocking decisions. Contrary to conventional wisdom, retailers hold larger stocks of a product that has less demand uncertainty as compared to one that has more demand uncertainty.     

Price Incentives and Coordination in a Two‐Product Decentralized Supply Chain

We investigate pricing incentives for competing retailers who distribute two variants of a manufacturer's product in a decentralized supply chain. Under a two‐dimensional Hotelling model, we derive decentralized retailers' prices for the products, and distortions in pricing when compared to centrally optimal prices. We show that price distortions decrease as consumers' travel cost between retailers increases, due to less intense competition. However, price distortions do not change monotonically in consumers' switching cost between products within stores. To fix decentralized retailers' price distortions, we construct a two‐part pricing contract that coordinates the supply chain. We show that the coordinating contract is Pareto‐improving and analyze increase in the supply chain profit under coordination.     

Storage constrained vendor managed inventory models with unequal shipment frequencies

We consider a supply chain where a vendor manages its multiple retailers' stocks under a vendor managed inventory (VMI) contract that specifies upper stock limits at the retailers' premises and overstock costs for exceeding those limits. We formulate a mixed integer nonlinear program that minimizes total supply chain costs and allows unequal shipment frequencies to the retailers. We develop an algorithm to solve its relaxed version which provides a lower bound cost solution. We propose a cost efficient heuristic procedure to generate delivery schedules to the retailers. We conduct a sensitivity analysis to provide insights on the performance of the proposed heuristic. Results show that our heuristic finds optimal or near optimal solutions, and it proposes substantial savings compared to the total supply-chain cost in the cases where there is no VMI and where there is VMI but with equal shipment frequencies to retailers.     

VERTICAL INFORMATION EXCHANGE IN A SUPPLY CHAIN WITH DUOPOLY RETAILERS

We consider a supply chain with one manufacturer in the upstream and two competing retailers in the downstream. The retailers sell differentiated goods and are endowed with some private demand information. The paper shows that the manufacturer's optimal strategy is independent of the type of downstream competition, Cournot or Bertrand, and that no information will be shared with the manufacturer on a voluntary basis. However, complete information sharing, which benefits all three parties, can be achieved through side payment when the retailers' information is statistically less accurate or when the leakage effect is more beneficial to the retailers.     

Analyzing the Efficient Execution of In‐Store Logistics Processes in Grocery Retailing—The Case of Dairy Products

In this article, we examine in‐store logistics processes for handling dairy products, from the incoming dock to the shelves of supermarkets and hypermarkets. The efficient execution of the in‐store logistics related to such fast‐moving, sensitive, and essential items is challenging and crucial for grocery retailers' sales, profits, and image. In our empirical study, we survey in‐store logistics processes in 202 grocery supermarkets and hypermarkets belonging to a major retail chain in central Europe. Using a data envelopment analysis (DEA) and simulation, we facilitate process benchmarking. In particular, we identify ways of improving in‐store logistics processes by showing the performance impacts of different managerial strategies and tactics. The DEA results indicate different efficiency levels for different store formats; the hybrid store format of the small hypermarket exhibits a comparatively worse performance in the analyzed execution of in‐store logistics processes. The process simulation analysis reveals that the strategic and tactical design of in‐store logistics processes (such as store locations/layouts, capacity management, reorder time, order period, and safety stock factors) lead to substantial service performance improvements (such as higher on‐shelf availability combined with reduced inventory obsolescence costs). The results also show marginal improvements in the performance figures when delivery delays and damage to products are reduced.     

Competition and Coordination in a Two‐Channel Supply Chain

We study competition and coordination in a supply chain in which a single supplier both operates a direct channel and sells its product through multiple differentiated retailers. We study analytically the supply chain with symmetric retailers and find that the supplier prefers to have as many retailers as possible in the market, even if the retailers' equilibrium retail price is lower than that of the supplier, and even if the number of retailers and their cost or market advantage prevent sales through the direct channel. We find that the two‐channel supply chain may be subject to inefficiencies not present in the single‐channel supply chain. We show that several contracts known to coordinate a single‐channel supply chain do not coordinate the two‐channel supply chain; thus we propose a linear quantity discount contract and demonstrate its ability to perfectly coordinate the two‐channel supply chain with symmetric retailers. We provide some analytical results for the supply chain with asymmetric retailers and propose an efficient solution approach for finding the equilibrium. We find numerically that the supplier still benefits from having more retailers in the market and that linear quantity discount contracts can mitigate supply chain inefficiency, though they no longer achieve perfect coordination.     

考虑不同经营模式的零售商纵向整合策略选择:前向,后向还是不整合？

随着互联网的发展,"新零售"表现形式之一的纵向整合成为零售商转型升级的重要策略。考虑了产品之间竞争性,分别研究了分销模式、平台模式和混合模式下,零售商采取不进行纵向整合、前向整合和后向整合的利润,通过对比给出零售商最优的纵向整合策略选择条件。最后,分析了不同经营模式对零售商纵向整合策略选择的影响。研究发现：第一,随着潜在需求的增加,在三种经营模式下零售商的最优策略都从不进行纵向整合变为后向整合、前向整合;第二,随着产品之间竞争程度增加,在分销模式和平台模式下,零售商的最优策略从后向整合变为不进行纵向整合、前向整合,在混合模式下,零售商的最优策略从后向整合或不进行纵向整合变为前向整合;第三,随着佣金费率增加,在平台模式下,零售商的最优策略从前向整合变为后向整合、不进行纵向整合,在混合模式下,零售商的最优策略从前向整合或后向整合制造商2变为不进行纵向整合、后向整合制造商1。     

Hierarchical Screening for Capacity Allocation in Supply Chains: The Role of Distributors

We consider a two‐stage principal–agent screening environment in a decentralized supply chain with retailers, distributors, and a supplier. The retailers possess private information regarding their local market profitabilities. The distributors can partially observe the retailers' profitabilities and are heterogeneous with regard to the precision of that information. The supplier determines the level of production, but knows neither the local market profitabilities nor the precision of the distributors' information. The supplier first allocates finished products to distributors, and the distributors then contract with local retailers with a capacity constraint. We find that due to the distributors' superior information, the quantity distortion on the retailers' side is mitigated, and the upstream information asymmetry subsequently affects the quantity allocation among the downstream retailers. The supplier may not benefit from contracting with the distributors. In addition, no distributor is excluded based on the heterogeneity of the information precision, even though some distributors do not have better information than the supplier. In the numerical examples, we further analyze how the local market heterogeneity and inventory costs affect the capacity allocation, the retailers' payoffs, and the supply chain profits. We document some counter‐intuitive quantity allocation rules that arise from the distributors' information advantage.     

Allocating Capacity with Demand Competition: Fixed Factor Allocation*

We consider a supply chain consisting of a supplier and two retailers. The supplier sells a single product to the retailers, who, in turn, retail the product to customers. The supplier has limited production capacity, and the retailers compete for the supplier's capacity and are duopolists engaged in Cournot competition for their customers. When the sum of the retailers' orders exceeds the supplier's capacity, the supplier allocates his capacity according to a preannounced allocation rule. We propose a new capacity allocation rule, fixed factor allocation, which incorporates the ideas of proportional and lexicographic allocations: it prioritizes retailers as in lexicographic allocation, but guarantees only a fixed proportion of the total available capacity to the prioritized retailer. We show that (1) the fixed factor allocation rule incorporates lexicographic and proportional allocations from the perspectives of the supplier and the supply chain; (2) under fixed factor allocation, the supply chain profit is not affected by the allocation factor when it is greater than a threshold; (3) the retailers share the supply chain profit with the supplier depending on the value of the allocation factor; and (4) the fixed factor allocation coordinates the supply chain when the market size is sufficiently large. We also compare fixed factor with proportional and lexicographic allocations, respectively. Furthermore, we demonstrate how the supplier can optimize his capacity level and wholesale price under fixed factor allocation.     

Distributing a Product Line in a Decentralized Supply Chain

Although there is a rich literature on single product distribution in decentralized supply chains, the incentive problems that arise in distributing a product line have largely not been investigated. In practice, most manufacturers distribute a line of products with different features and qualities and not just a single product. Consider a manufacturer who distributes a product line through competing downstream retailers. In this setting, we investigate how and why the retailers' price and inventory decisions deviate from the centrally optimal decisions. Due to substitution between different product variants, as well as between different retailers, the incentive problems associated with distributing a product line are more complicated than that of distributing a single product. We characterize retailers' incentive distortions under a residual‐claimancy contract, and construct contracts that achieve channel coordination. We show that retail price floors or inventory buybacks, appropriately tailored to each product variant, are among the contracts that can achieve coordination. Using numerical simulations, we demonstrate how the optimal contract terms (such as wholesale prices and buyback prices) for each variant are influenced by the parameters of an underlying consumer choice model.     

Manufacturer's pricing strategy for supply chain with warranty period-dependent demand

This article presents a review of the issues associated with a manufacturer's pricing strategies in a two-echelon supply chain that comprises one manufacturer and two competing retailers, with warranty period-dependent demands. The manufacturer, as a Stackelberg leader, specifies wholesale prices to two competing retailers who face warranty period-dependent demand and have different sales costs. The manufacturer considers three pricing options: (1) setting the same price for both retailers, while disregarding their difference with regard to sales cost; (2) setting a different price to each retailer on the basis of their sales cost; and (3) setting the same price to both retailers according to the average sales cost of the industry. In this article, the retailers' optimal warranty periods and their optimal profit, manufacturer's optimal wholesale price, and his/her optimal profit associated with different pricing strategies have been derived using the game theory. Our analysis shows that the results for retailers are the same with Strategy 1 or Strategy 3. In addition, we compared the effects of different pricing strategies of the manufacturer on supply chain decisions and profit. We conclude from the results that the manufacturer should either adopt Strategy 2 with symmetrical sales cost information or Strategy 3 if retailers' sales costs are asymmetrical.     

考虑跨渠道退货的双渠道供应链最优策略

基于零售商线上线下销售与消费者退货并存的双渠道供应链,构建考虑退货的双渠道供应链定价模型以及考虑跨渠道退货策略的双渠道供应链定价决策模型。通过理论分析和数值实验对比,研究集中决策与分散决策下的零售商最优定价策略以及总利润的变化情况,同时分析在不同退货策略下顾客偏好以及退货率对零售商定价和收益的影响。结果表明：零售商渠道的最优价格设置与顾客对渠道的偏好成正比,与退货率成正比。当顾客对某一渠道偏好程度高时,分散决策下的利润要高于集中决策,并且随着该渠道退货率的提高,这种利润差距会进一步扩大,因此零售商应实施分散决策的渠道策略,鼓励线上线下两个渠道进行竞争,从而获得更大的收益。从仿真结果可以看出,对于一般的服装产品,提供跨渠道退货服务的零售商总利润更高,在一定条件下跨渠道服务水平的投入会增加零售商的收入,但这种投入应该控制在一个合理的水平上,并保持服务与顾客回报之间的正相关关系。     

考虑网络退货和渠道成本时全渠道BOPS定价与服务决策

随着线上线下融合的全渠道零售的兴起，越来越多的品牌商开始为顾客提供线上购买线下取货BOPS （Buy Online and Pickup in Store）的购物选择。本文考虑网络退货和渠道成本，基于网络渠道、实体渠道和BOPS渠道下的消费者效用函数构建品牌商开设BOPS渠道前后的利润模型，分析BOPS模式对品牌商需求分布和盈利能力的影响，研究定价和服务的最优决策。结果表明：（1）当网络退货率和BOPS渠道不便利程度之间满足特定关系时，开设BOPS渠道可使品牌商总需求增加、网络渠道和实体渠道的需求减少；（2）当网络退货率达到一定阈值或BOPS渠道很便利时，开设BOPS渠道可使品牌商总利润增加；（3）当网络退货率很低而网络渠道购物成本较高时，开设BOPS渠道可使品牌商获利更大；（4）在交通便利之处增设具有体验服务的顾客自提门店，不论网络渠道购物成本和网络退货率高低，甚至适当提升商品定价也可使品牌商有利可图。本研究可为品牌商实施BOPS全渠道战略提供一定的管理见解。     

Disentangling reciprocal relationships between R&D intensity,profitability and capital market performance: A panel VAR analysis

Research and development (R&D) investments are strategic choices that firms make to create and sustain competitive advantage. Extant literature proposes that firms’ R&D investments and their profitability and capital market performance are reciprocally related. However, the direction of these relationships and their temporal nature are unclear. We take a real options perspective to argue that the long-run firm performance effects of R&D investments are better than their short-term ones, and that the initial level of R&D intensity influences the nature of these relationships. We apply panel vector autoregression (P-VAR) to a sample of 6623 U.S. firms over the 1990–2020 period in order to test our hypotheses. Our results indicate that increases in R&D intensity have negative effects on profitability in the short term, yet these effects diminish relatively quickly. The effects of increases in R&D intensity on capital market performance are positive and persist over time. Consistent with our predictions, they are contingent on the initial levels of R&D intensity and performance. The findings are fundamentally in line with the real options perspective employed here, yet they add important nuance to our understanding of when, how, and under which conditions R&D investments and firm performance affect one another.     

The Impact of the Online Channel on Retailers' Performances: An Empirical Evaluation

The use of the Internet as an additional sales channel offers traditional retailers opportunities to reach expanded markets while improving the efficiency of their operations. Although the potential benefits of the online channel are clear, there are significant variations in the scope and depth of online channel use among retailers. Drawing from data on more than 100 publicly traded companies, this study examines the impact of online‐channel use on retailers’ performance. The results suggest that the online channel provides significant improvements in sales, cost, inventory, and return on investments. In addition, we find that the timing of online‐channel adoption does not play a significant role in performance improvement, but having a local store presence does.     

两种激励条件下三级供应链产品质量控制策略研究

本文基于四阶段Stackelberg博弈分析,研究了在三级供应链中如何进行产品质量控制策略问题。构建了由制造商、零售商与最终顾客组成的三级供应链博弈模型,制造商进行产品质量决策,即生产高质量产品或者低质量产品,零售商进行产品采购决策和零售定价决策,最终顾客根据两种产品质量水平和零售价格的差异,决定产品的购买数量;当零售商采购高质量产品时,制造商将会向其提供价格折扣策略;当零售商采购低质量产品时,制造商将会向其提供延迟付款策略。运用最优化原理,求解了制造商的产品质量水平、价格折扣、延迟付款期限和零售商的零售价格、最终顾客的购买数量,及期望收益函数。进行了算例分析,结果表明:高质量产品零售价格关于价格折扣下降幅度更大,而低质量产品零售价格关于延迟付款期限下降幅度更大;制造商提供的价格折扣越大、延迟付款期限越长,其期望收益将会减少,此时零售商的期望收益将会增加,最终顾客产品需求量将会增加;制造商的总期望收益函数将呈现"倒U"型,求解了期望收益的最大值及各契约参数的值,结果证明所提出的产品质量控制策略是可行的。     

Impact of secondary market on consumer return policies and supply chain coordination

In this paper, we develop a unified model to study the inventory management problem of a product and the coordination of the associated supply chain consisting of a single supplier and considerably many retailers in the presence of a secondary market. Specifically, consumer returns are allowed in the initial sales. Then, we introduce a secondary market to salvage the returns and the leftovers from the initial sales. In this secondary market, a discount price will be offered to the consumers but no returns are accepted. Moreover, between the primary and the secondary market, there is an internal market where retailers can trade among themselves so that they are able to adjust their inventory levels to prepare for the sales in the secondary market. We study the retailers' and the supply chain's inventory decision in this case and highlight the impact of the secondary market on the sales as well as on the supply chain coordination contracts. We conclude that the secondary market helps us to increase the total wholesale volume. Numerical examples show that the total sales profit is also increased. However, the secondary market aggravates the incentive conflict between the retailers and the supply chain on deciding the optimal inventory levels and hence requires the supplier to offer more generous buyback or sales rebate contracts for coordination of the supply chain. Finally, we extend our analysis to more general cases and also show that our results are robust to some of the modeling assumptions.     

Impact of product proliferation on the reverse supply chain

Product variety is one of the most important advantages in highly competitive markets. However, excessive product proliferation's reducing the profit margin has caused increased focus on developing a management method for maximal profit. In a closed-loop supply chain, product proliferation affects the reverse supply chain as well as the forward supply chain. Although increasing the number of product types can better satisfy diverse customer needs, complexity in the product recycling, remanufacturing, and resale processes may erode a firm's overall profits. In this study, we develop a mathematical model for analyzing a capacitated reverse supply chain consisting of a single manufacturer and multiple retailers. We reveal closed-form solutions for the optimal batch size and maximal profit, and discuss managerial insights into how the number of products and other factors can affect both batch size and profit. Finally, we investigate the relationship between product proliferation and the choice of logistics strategy.