The effects of learning and forgetting on the optimal lot size quantity of intermittent production runs

This paper studies the effects of learning and forgetting on the production lot size problem with infinite and finite planning horizons. It is assumed that the determination of the economic manufactured quantity (EMQ) in the succeeding production run is dependent on: (1) the maximum inventory accumulated prior to interruption; (2) the length of the interruption period which incurs total forgetting; and (3) the level of experience in equivalent units remembered at the start-up of the next production run. The optimum operating inventory doctrines is obtained by trading off procurement cost per unit time and the inventory carrying cost per unit time, so that their sum will be a minimum. A numerical example is presented to demonstrate the application of learning and forgetting to the determination of the EMQ.     

Energy Performance Contracting in a Competitive Environment*

Energy Performance Contracting (EPC) is an important and effective energy conservation mechanism, under which an energy service company (ESCO) provides an energy‐saving service to its client and shares the resulting energy cost savings. Using a game‐theoretic model, we investigate the impacts of EPC on two competing manufacturers, of which one is more energy‐efficient in production than the other. The less energy‐efficient firm first proposes an energy‐saving sharing contract to the more energy‐efficient firm, who, if accepting the contract, acts as an ESCO that decides the energy‐saving target and helps realize it for the client. Then the firms engage in Cournot competition by producing/selling substitutable products. By solving the equilibrium solutions, we show that under an EPC project, the total production quantity of both firms increases (so the market price of the product decreases) with the ESCO producing less while its client producing more, which also leads to a higher consumer surplus. Meanwhile, both manufactures are better off under EPC and would obtain strictly higher profits when the service cost rate is high. Nevertheless, EPC may not result in a better environmental performance in that the total energy consumption of both firms may be higher under EPC, which happens when the market size is small and the ESCO has not much energy‐efficiency advantage over its client. We also study four extensions: When the energy saving service and production decisions are made separately, we find the more energy‐efficient firm is worse off when implementing EPC; when the energy‐saving sharing ratio is determined by the ESCO instead of the client, the ESCO extracts all the surplus derived from the EPC project while the total energy consumption of both firms is always reduced; when the energy‐saving sharing ratio is determined via Nash bargaining, the main insights from the base model remain valid; finally, when the client sets the target of overall cost reduction, it extracts all the surplus derived from the EPC project.     

When Gray is Good: Gray Markets and Market‐Creating Investments

Gray markets arise when an intermediary buys a product in a lower‐priced, often emerging market and resells it to compete with the product's original manufacturer in a higher priced, more developed market. Evidence suggests that gray markets make the original manufacturer worse off globally by eroding profit margins in developed markets. Thus, it is interesting that many firms do not implement control systems to curb gray market activity. Our analysis suggests that one possible explanation lies at the intersection of two economic phenomena: firms investing to build emerging market demand, and investments conferring positive externalities (spillovers) on a rival's demand. We find that gray markets amplify the incentives to invest in emerging markets, because investments increase both emerging market consumption and the gray market's cost base. Moreover, when market‐creating investments confer positive spillovers, each firm builds its own market more efficiently. Thus, firms can be better off with gray markets when investments confer spillovers, provided the spillover effect is sufficiently large. These results provide a perspective on why firms might not implement control systems to prevent gray market distribution in sectors where investment spillovers are common (e.g., the technology sector) and, more broadly, why gray markets persist in the economy.     

The Effect of Competition on the Efficient–Responsive Choice

In determining their operations strategy, a firm chooses whether to be responsive or efficient. For firms competing in a market with uncertain demand and varying intensity of substitutability for the competitor's product, we characterize the responsive or efficient choice in equilibrium. To focus first on the competitive implications, we study a model where a firm can choose to be responsive at no additional fixed or marginal cost. We find that competing firms will choose the same configuration (responsive or efficient), and responsiveness tends to be favorable when demand uncertainty is high or when product competition is not too strong. Intense competition can drive firms to choose to be efficient rather than responsive even when there is no additional cost of being responsive. In such a case, both firms would be better off by choosing to be responsive but cannot credibly commit. We extend the basic model to study the impact of endogenized production timing, multiple productions and product holdback (or, equivalently, postponed production). For all these settings, we find structurally similar results; firms choose the same configuration, and the firms may miss Pareto‐improvements. Furthermore, through extensions to the basic model, we find that greater operational flexibility can make responsiveness look less attractive in the presence of product competition. In contrast to our basic model and other extensions, we find it is possible for one firm to be responsive while the other is efficient when there is either a fixed cost or variable cost premium associated with responsive delivery.     

Short‐Run Subsidies and Long‐Run Adoption of New Health Products: Evidence From a Field Experiment

Short‐run subsidies for health products are common in poor countries. How do they affect long‐run adoption? A common fear among development practitioners is that one‐off subsidies may negatively affect long‐run adoption through reference‐dependence: People might anchor around the subsidized price and be unwilling to pay more for the product later. But for experience goods, one‐off subsidies could also boost long‐run adoption through learning. This paper uses data from a two‐stage randomized pricing experiment in Kenya to estimate the relative importance of these effects for a new, improved antimalarial bed net. Reduced form estimates show that a one‐time subsidy has a positive impact on willingness to pay a year later inherit. To separately identify the learning and anchoring effects, we estimate a parsimonious experience‐good model. Estimation results show a large, positive learning effect but no anchoring. We black then discuss the types of products and the contexts inherit for which these results may apply.     

Learning‐by‐Doing,Organizational Forgetting,and Industry Dynamics

Learning‐by‐doing and organizational forgetting are empirically important in a variety of industrial settings. This paper provides a general model of dynamic competition that accounts for these fundamentals and shows how they shape industry structure and dynamics. We show that forgetting does not simply negate learning. Rather, they are distinct economic forces that interact in subtle ways to produce a great variety of pricing behaviors and industry dynamics. In particular, a model with learning and forgetting can give rise to aggressive pricing behavior, varying degrees of long‐run industry concentration ranging from moderate leadership to absolute dominance, and multiple equilibria.     

When good deals need help getting done: Articulating side payment strategies

Value creation often requires coordinated action by multiple firms. Existing research on value-based strategy emphasizes situations where both parties reasonably anticipate sharing the gains to cooperation and develop arms-length contracts through bargaining. Less existing research on value-based strategy addresses situations where value-creating market transactions fail to occur because one party expects to be worse off from coordinated action, precluding their participation. Although vertical integration or informal contracts potentially overcome this reticence, these solutions are not always feasible or incur costs of their own. We model how firms may be able to strike a stable deal and create value by employing a side payment strategy. This technique mitigates transactional frictions by playing a biform game with a cooperative first stage, which modifies the payoffs in a non-cooperative second stage so that coordinated action becomes feasible in a stable agreement. We also extend the basic analysis to consider variations in contract enforceability, reneging, and presence of multiple counterparties.     

基于模糊神经网络的企业财务危机非线性组合预测方法研究

本文提出了一种基于模糊神经网络的企业财务危机非线性组合建模与预测新方法,并给出了相应的混合学习算法。通过与多元线性回归模型、Fisher模型和Logistic回归模型的预测结果对比表明,该方法具有预测精度高,学习与泛化能力强,适应性广的优点。在预测上市公司财务危机方面优于其他方法。     

基于企业学习策略的集群持续创新机制及实证研究

由于集群网络的复杂性,集群创新机制的研究目前较为缺乏,有限的研究也往往假设集群企业具有同质性.本文提出,集群企业依据其在集群网络中的位置采用不同的学习策略,领导型企业更加侧重于探索式学习,跟随型企业更加侧重于利用式学习,两者的分工和异质性互动构成了集群持续创新的内在机理.本文在个体和企业层次双重学习研究的基础上,结合集群特有的组织条件,提出集群双重学习的机制,据此将集群企业进行分类,并建立集群中企业学习的理论模型,接着选取国内某地化工产业集群的236家企业作为样本,运用结构方程模型对集群中企业进行分类检验和比较研究.研究结果表明,集群中不同类型企业的学习策略存在差异,集群网络的作用是产生这一差异的可能原因;集群中不同类型企业的学习策略具有互补性,有利于企业间互动和集群的持续创新.     

Economic manufacturing quantities under conditions of learning and forgetting (EMQ/LaF)

Abstract

Abstract. It has been empirically observed that productivity improves as production continues due to system 'learning’, but that it deteriorates once the activity is stopped due to system 'forgetting’. Both learning and forgetting follow an exponential form with a 'doubling factor’ ranging between 0.75 and 0.98. We review and critique two previously proposed models, correct some minor errors in them, and expand one of them to accommodate a finite horizon. We also propose a new model that is more in harmony with the established learning function, for the determination of the optimal number and size of the lots in the finite and infinite horizon. The methodology used throughout is dynamic programming. We investigate the impact of all three models on the optimal lot sires and their costs, and establish the functional relations between the total cost and the various factors affecting them.     

Discrete time-varying demand lot-sizing models with learning and forgetting effects

This paper deals with the problem of incorporating both learning and forgetting effects into discrete timevarying demand lot-sizing models to determine lot sizes. Forgetting is retrogression in learning which causes a loss of labour productivity due to breaks between intermittent production runs. Formulae are derived for calculating the production cost required to produce the first unit of each successive lot over a finite planning horizon. An optimal lotsizing model and three heuristic models are developed by extending the existing models without learning and forgetting considerations. Numerical examples and computational experience indicate that larger lot sizes are needed when the phenomenon of learning and forgetting exists. Several important conclusions are drawn from a comparison of the three heuristic solutions with the optimal solution, and suggestions for future research and for lot-size users to choose an appropriate lot-sizing technique are made.     

Emerging themes in distance learning research and practice: some food for thought

With the rapid spread of distance learning as a medium for delivering instruction, the practice of distance learning has outpaced research. This paper describes major themes identified in a review of selected research papers published in the past five years. Themes include the following: definitions of distance learning and why it should be studied; identification of the major learning theories on which research is based; how collaboration can be achieved via distance learning; the role that learner characteristics play in the success of distance learning systems, and issues related to measuring the effectiveness of distance learning. The authors conclude that more research is needed to identify critical success factors for distance learning.     

供应链中纵向信息获取和横向信息共享策略研究

研究由一个制造商和两个零售商组成的二级供应链中,零售商之间的横向信息共享策略和制造商的信息获取以及最优定价问题。在模型中,制造商同时为两家零售商提供等价商品,零售商向消费者销售商品且进行价格竞争。以Bertrand博弈为研究手段,求解了零售商的均衡销售价格、订货量决策和信息共享策略,制造商的最大利润和最优批发价格,以及供应链利润。分析比较了在制造商不同的信息获取策略下,零售商、制造商和供应链的利润。研究表明,零售商之间完全信息共享始终为占优策略。但制造商获取下游信息时会使得自身利润增加,零售商利润减少,因此零售商不会主动把信息共享给制造商。考虑到下游的边界均衡解,供应链的利润变化还与市场的不确定性和产品的替代性有关。当产品替代性较高或产品替代率较低且市场的不确定性处于中间水平时,制造商获取信息后供应链利润增加,此时制造商可以用部分增加的利润成功购买零售商信息。该模型为上游制造商提供了最优定价和信息获取策略,也为下游零售商提供了求解自身最优销售价格、订货量和信息共享决策的方法。     

Reducing exposure to exchange rate risk: A case study

During the last decade, with the advent of large fluctuations in the values of currencies, business managers came to realize that effective international financial management could be a major contributor to a firm's profitability. This same period showed aggressive marketing by U.S. firms in foreign markets. The resulting expansions have led to requirements for increased knowledge concerning foreign consumer behavior, pricing procedures and trade regulations. In addition, transactions with foreign customers have resulted in a more complex cash management environment. The firms may desire all payments received to be denominated in U.S. dollars, but such a policy could result in reduced exports if potential foreign importers wished to make payment in their own currency. Consequently, the U.S. firms should accomodate importers' desires and then implement a strategy to deal with the exchange rate risk. This paper develops such a strategy and illustrates how the strategy can be applied to a realistic case.     

利益关联、评级资格管制与基金评级公正性

具有基金评级资格的证券公司与证券投资基金之间存在着紧密而有趣的经济关系,一方面,具有基金评级资格的证券公司可以对基金进行评级,另一方面,基金与证券公司之间可能存在利益关联,具体体现在:1)基金要通过证券公司的交易席位进行交易并相应地给予证券公司交易佣金;2)证券公司可能是投资基金的大股东.那么这两种利益关联会损害证券公司作为基金评级机构的公正性吗？研究发现:1)如果证券公司与投资基金之间存在交易佣金关系或股权关系,那么证券公司会显著提高基金的评级等级;2)通过利益关联获得的基金评级对基金未来业绩解释力明显较低;3)2010年实施基金评价资格管制之后,上述两种现象更为明显.综合研究结果表明,利益关联会损害证券公司作为基金评级机构的公正性,且基金评级资格管制可能进一步加剧了利益关联对评级公正性的损害.     

On pricing and protection of complementary products

The business literature advises firms producing complementary products to sell the core product at a low price, but to price the complementary product at a higher premium. This strategy, however, is problematic if firms face competitors in the market for complementary products as well, as observed in recent years for instance in the market for printers/ink cartridges. Motivated by several measures the firms have taken in this market, the current paper analyzes whether firms are interested in protecting their complementary product from outside competition. We find that firms protect their products only if consumers underestimate the demand for the complementary product when deciding which core product to buy. Moreover, we investigate how the decision to protect the complementary product interacts with a firm’s pricing decision. We show that the price policy proposed in the business literature should only be applied, if consumers sufficiently underestimate their demand for the complementary product so that firms strongly protect these products from outside competition.     

An Approximate Solution to Deterministic Kanban Systems

This paper presents a simple heuristic for computing the number of kanbans in a kanban system. The production systems under consideration have a multistage, uncapacitated, assembly tree structure, with every stage producing only one item at a time. The experimental results show that this method generates very good solutions. In more realistic problems where the master production schedule incorporates a smoothed demand, the solution found under the proposed method is identical to that of the linear programming approximation. This simple heuristic can be used in the real world to quickly determine the number of kanbans for daily just-in-time operations.     

DOWNSIZING AND JOB INSECURITY

This article offers an explanation of why firms' downsizing patterns may vary substantially in magnitude and timing, taking the form of one‐time massive cuts, waves of layoffs, or zero layoff policies. The key element of this theory is that workers' expectations about their job security affect their on‐the‐job performance. In a situation where firms face adverse shocks, the productivity effect of job insecurity forces firms to balance laying off redundant workers and maintaining survivors' commitment. The cost of ensuring commitment differs between firms with different characteristics and determines whether workers are laid off all at once or in stages. However, if firms have private information about their future profits, they may not lay off any workers in order to signal a bright future, boosting worker's confidence. (JEL: J21, J23, D21, D82)