Design of Product Grading Procedures*

Consider a situation in which the items produced by a production process are sorted into two grades according to predetermined specifications and sold at two different prices. A loss is incurred by the producer when an item is classified into a grade and its quality does not meet the consumer's requirement of that grade. A loss in selling price is also incurred when an item is classified into a lower quality grade when it can meet the consumer's requirement of a higher grade. Consequently, the producer's profit is determined by sale prices and losses due to consumer dissatisfaction. The optimal grading specifications are determined to maximize the expected profit. Design of product grading procedures can be based on the performance variable of interest or a surrogate variable correlated with the performance variable. The practice of using correlated variables in product grading is common in industry. We develop product grading models for both the performance variable and a correlated variable.     

A Test of the Cross-Sectional Robustness of the Arbitrage Pricing Model Using Foreign Exchange Rates*

This paper tests the cross-sectional robustness of the arbitrage pricing theory (APT) model using foreign exchange rate data to determine if the model is robust with respect to the various random samples and various factor analytic techniques. Factor scores are developed using various samples and factor analytic techniques to explain the returns for other samples and groupings. The APT model is found to be robust across samples and techniques.     

Measuring the Impact of Increased Product Substitution on Pricing and Capacity Decisions Under Linear Demand Models

We consider two substitutable products and compare two alternative measures of product substitutability for linear demand functions that are commonly used in the literature. While one leads to unrealistically high prices and profits as products become more substitutable, the results obtained using the other measure are in line with intuition. Using the more appropriate measure of product substitutability, we study the optimal investment mix in flexible and dedicated capacities in both monopoly and oligopoly settings. We find that the optimal investment in manufacturing flexibility tends to decrease as the products become closer substitutes; this is because (1) pricing can be used more effectively to balance supply and demand, and (2) the gains obtained by shifting production to the more profitable product are reduced due to increased correlation between the price potentials of the substitutable products. The value of flexibility always increases with demand variability. We also show that, as long as the optimal investments in dedicated capacity for both products are positive, the optimal expected prices and production quantities do not depend on the cost of the flexible capacity. Manufacturing flexibility simply allows the firm to achieve those expected values with lower capacity, while leading to higher expected profits.     

An Optimal Model for Cell Formation Decisions

This study develops an approach to cell formation decisions for cellular manufacturing layouts in group technology settings. An optimal 0–1 integer programming model is used to provide an analysis for determining which machines and parts should be assigned to cells in cellular manufacturing layouts. This approach minimizes the cost of manufacturing exceptional parts outside the cellular system, subject to machine capacity constraints. Part–machine matrices are partitioned into disconnected cells and use far fewer 0–1 variables than earlier approaches. Formulation of the model is described with a numerical example and computer solutions to realistic problems are obtained. The characteristics of computer run times, model performance, and applications of the model are discussed.     

The Impact of Manufacturers' Wholesale Prices on a Retailer's Shelf‐Space and Pricing Decisions*

This article examines shelf‐space allocation and pricing decisions in the marketing channel as the results of a static game played à la Stackelberg between two manufacturers of competing brands and one retailer. The competing manufacturers act as leaders that play a simultaneous and noncooperative game. They fix their transfer prices by taking into account the shelf‐space allocation and price‐markup decisions of their common exclusive dealer. The results indicate that the wholesale prices of brands are strongly linked to their share of the shelf. The main results of our numerical simulations may be summarized as follows: first, the lower the unit cost and/or the greater the price elasticity, the greater the shelf space allocated to that brand. Second, the higher the shelf‐space elasticity, the lower are the wholesale prices and the profits of all channel members.     

Incorporating Price and Replacement Purchases in New Product Diffusion Models for Consumer Durables*

The article presents theoretical and empirical research findings which incorporate price and replacement purchases in new product diffusion models. On the theoretical side, this paper characterizes, qualitatively, optimum pricing policies for new products. Possible entry of rivals is not considered, but repeat sales, cost learning dynamics and discounting of future profit streams are allowed. Theoretical research findings suggest that the inclusion of repeat purchases in the diffusion model significantly changes the derived optimal pricing policy even if replacements were not price dependent. On the empirical side, alternative first purchase and repeat purchase models have been estimated and compared using nonlinear procedures. The diffusion data analyzed is related to nine consumer durables. Empirical research findings suggest that, for the considered product categories, diffusion is basically an imitative process, price can affect first and replacement purchases, and unit production cost is a decreasing function of cumulative first purchases. Managerial implications of the research findings are also discussed.     

A Generalized Framework for Quantity Discount Pricing Schedules

The use of price to influence a buyer's purchasing behavior and thus improve supply chain coordination has received considerable attention. The vendor and buyer are independent economic entities, each maximizing its own profit. We consider the case of a buyer with fixed annual demand, independent of cost. The vendor's objective is to set a price schedule that encourages the buyer to raise its order quantity, increasing the vendor's profits. We present a unified treatment of the problem, categorize different variations, and provide a common solution procedure for all cases.     

无外部市场条件下中间产品转移价格的博弈分析与决策

本文首先用反例证明了文^[1]中在各分厂成本函数和最终产品需求函数已知的条件下,给出的中间产品最优转移价格的两个计算公式并不总是成立的,给出了这两个计算公式成立的充要条件,并分析了公司关于中间产品转移价格决策的动态一致性问题。接着,利用完全信息动态博弈对中间产品转移价格的确定问题做了进一步的分析研究。最后,针对文^[1]中给出的中间产品最优转移价格的两个计算公式不成立的情况,讨论了中间产品转移价格的确定问题。     

治理环境、政府控制和控制权定价——基于中国证券市场的实证研究

本文以我国上市公司2001-2004年间的经验数据为样本,实证分析了治理环境、政府控制对控制权交易定价的影响。研究发现,较好的治理环境会降低控制权的交易价格;对政府控制企业的控制权定价显著高于非政府控制的企业;股权制衡程度越高,对控制权的支付价格越低。进一步研究还表明,治理环境对控制权定价的负向作用在政府控制的企业中更为显著、影响更大。本文对理解转型经济中制度环境对公司治理的影响提供了有益视角。     

The Impact of Alternative Vendor/ Buyer Communication Structures on the Quality of Purchased Materials

This paper examines the critical interface between manufacturing, purchasing, and quality assurance by exploring the impact of two alternative structures of buyer and vendor communication on attempts to improve the quality of purchased items. Those two structures of communication are the parallel structure and the serial structure. The research analyzes and compares the advantages and disadvantages of these two specific communication structures; the results have implications for both researchers and managers. The analysis of data suggests that the parallel structure is associated with significantly higher levels of quality than the serial structure. From a managerial perspective, the results of the research suggest that manufacturers must consider the parallel communication structure as a viable alternative for improving the quality of purchased components. While this study has helped frame some key managerial issues, the need and opportunity for further research in related areas is delineated.     

考虑消费者短视和策略行为的动态定价研究

研究了消费者在行为规则上表现出策略型或短视型的不同特征且估价呈随机分布的市场环境下产品的二阶段动态定价决策问题.基于临界估价的定义,对策略型和短视型消费者的市场响应特征进行了统一的描述,应用逆推法得到产品的最优价格路径.数值实验表明,产品降价幅度、两类消费者总的期望购买数量和企业总的期望利润会随着策略型消费者所占比例的增加而减小.最后比较分析了只存在单一类型消费者条件下的决策结果.     

Pricing and Replenishment of Competing Perishable Product Variants under Dynamic Demand Substitution

I consider pricing and ordering decisions faced by a retailer selling a perishable product with a two‐period shelf life over an infinite horizon. In the first period, the product is “new”; in the next, it becomes “old.” The new product is perceived by customers to have a higher quality than the old product. Every period, the retailer makes three decisions: prices for the new and old products and how much new product to order. I first show, with some simple cases, that demand uncertainty can make the sale of the old product profitable. I then consider a more realistic case with dynamic demand substitution among customers. I recognize that the retailer's decisions may be constant or may vary across different periods, under different contexts. For instance, varying the price of the new product can sometimes be difficult due to the negative impact it generates among customers. I find that (i) the benefit obtained from selling the old product with constant decisions is much higher than the benefit from allowing all the decisions to vary; (ii) the former benefit increases with a higher procurement cost, a higher quality of the new product, and higher demand volatility; however, the latter benefit is non‐monotone in these parameters; (iii) most of the latter benefit can be obtained by just changing the order quantity; and (iv) as the inventory of the old product increases, when all the decisions vary, the optimal price of the new product may increase or decrease.     

考虑参照依赖与产品展示的体验式商品定价与订购策略

消费者在购买体验式商品时面临着产品价值的不确定性,因而会产生参照依赖行为。本文研究了考虑消费者参照依赖行为的定价与订购问题,并分析了产品展示策略的影响。研究发现,给定产品满足率时,只有当消费者获得高价值的概率大于某个临界值时,参照依赖下的最优价格才会高于没有参照依赖下的最优价格,并且产品价值维度与产品价格维度的参照依赖对最优价格起着相反的作用。进一步给出了最优订购量满足的条件,并发现在一定条件下最优价格随着订购量的增大而增大。当企业采取产品展示策略之后,会产生两方面的效应,一是消费者数量减少,二是剩余消费者的保留价格增大,此时最优价格随着展示系数的增大而增大。最后,通过数值分析得到了更多的管理启示。     

Subordinate Participation in Audit Budgeting Decisions: A Comparison of Decisions Influenced by Organizational Factors to Decisions Conforming with the Vroom-Jago Model*

This study examines the role of subordinate participation in the effectiveness of audit hours budget decisions in accounting firms. The study compares decisions influenced by organizational factors (such as organizational policies or the preferences of the superior) to decisions that conform to the Vroom-Jago (VJ) model. Our results indicate that actual level of participation used in budget decisions appears to be based primarily on perceived preferences of superiors and participation styles available under the circumstancesof the individual audit. However, results also indicate that decisions consistent with the Vroom-Jago model are characterized by higher decision quality and increased subordinatedevelopment. Since managers are apparently reluctant to use decision styles that conflictwith organizational factors, accounting firms may wish to gather information regarding the attributes of the decision context and use the VJ model to establish their available decision styles and determine the preferences of superiors. Doing so has the advantage of considering decision-specific attributes while enhancing the probability of manager compliance with a desired decision style.     

A Risk-sharing Approach to Transfer Pricing and Incentive Compensation Problems under Exchange Rate Uncertainty*

This study examines the transfer pricing and incentive compensation problems in a multinational enterprise facing currency risk. It is shown that, in the presence of diverse risk preferences among managers, the Hirshleifer (1956) transfer pricing rule results in inefficient resource allocation decisions by division managers. Following the approach developed by Kanodia (1979), two transfer pricing and compensation systems are proposed. The proposed systems enable central management to achieve efficient resource allocation and partial or global risk sharing. It is also argued that the proposed plans can be implemented in conjunction with existing transfer pricing systems that primarily serve tax and tariff concerns.     

Closing the Loop: An Empirical Analysis of the Dynamic Decisions Affecting Product Variety

Product variety decisions have become a key issue in managing new product development and innovation. The marketing literature highlights how product variety influences consumer demand. The operations and supply chain management literature discusses the impact of product variety on production and operational costs. However, very little has been found about how these past performance outcomes may influence present variety decisions. We consider product variety and performance outcomes in a dynamic decision loop by testing the forward impacts of product variety on demand and cost, as well as the reverse influences of past performance on present product variety decisions. Using archival data from the distribution network of a U.S.‐based soft drink bottler, we develop a balanced panel dataset of 3,666 observations over three years containing product variety, cost, and demand data. Our results suggest that both past demand and past cost outcomes may influence present variety decisions, with the demand impact occurring more rapidly than the impact of cost. Moreover, we investigate curvilinear impacts of product variety on the performance measures and find that product variety influences both demand and cost performance at diminishing marginal rates. From a theoretical perspective, our study better models the interplay between product variety and performance outcomes, while from a professional perspective, we help supply chain managers to better plan for the outcomes of their product variety decisions.     

不同渠道权力结构和信息结构下供应链定价和销售努力决策

本文针对零售商销售努力和销售价格影响需求情况下的制造商-零售商两级供应链,研究不同渠道权力结构和信息结构下供应链的分散决策。基于博弈理论和建模方法,对几种权力结构和信息结构情景建立相应模型,通过理论与数值分析对不同博弈均衡进行比较。研究表明,随着零售商势力逐步增强制造商利润会逐步恶化;但零售商势力增强能否带来更多利润,取决于需求对价格和销售努力的敏感度、销售努力成本以及信息结构。占优一方可以通过获取对方更多信息来改善自己处境。若占优零售商不得不依赖于对制造商成本先验分布进行决策,当估计的均值大于真实成本时,适度的方差对零售商更有利。最后,讨论了销售努力成本分担的合作机制,针对非合作博弈给出了帕累托改进的合约区间和 Nash讨价还价均衡。     

基于MNL选择模型的替代产品定价和库存决策研究

受现实中生产商和大型零售商不同契约关系的启发,本文以两个生产商和一个零售商组成的系统为对象,从顾客在两种替代性产品之间的选择行为出发,分别研究了零售商定价和生产商定价模式下的最优产品定价和库存决策。研究表明,在MNL选择模型下,零售商联合定价时应当选择使得产品单位利润相等的定价策略;生产商定价博弈中存在唯一的Nash均衡。数值实验分别考察了"生产商强势"和"零售商强势"两种情形下的最优决策和利润分配情况;实验结果能给相关企业的销售模式选择带来有益的管理启示。