inventory inaccuracies in the wholesale supply chain abstract the inventory level shown in the information system contrary to popular belief and assumptions in most academic papers and in spite of the considerable amounts invested in information technology is often inaccurate the inventory inaccuracy occurs when the inventory shown in the information system is not in agreement with the actually available inventory in this paper we first describe the major factors generating inventory inaccuracy then we provide situations permitting to manage an inventory system subject to errors we provide a general framework permitting to model the inventory inaccuracy issue in particular we link the inaccuracy issue with the well known random yield problem the shown link permits us to derive the optimal ordering policy of an inventory framework where demand satisfaction is done based on the inventory records which are subject to inaccuracies we also propose an analysis permitting to show the added value of an advanced identification system such as the rfid technology

optimal pricing and return policies for perishable commodities this paper considers the pricing decision faced by a producer of a commodity with a short shelf or demand life a hierarchical model is developed and the results of the single period inventory model are used to examine possible pricing and return policies the paper shows that several such policies currently in effect are suboptimal these include those where the manufacturer offers retailers full credit for all unsold goods or where no returns of unsold goods are permitted the paper also demonstrates that a policy whereby a manufacturer offers retailers full credit for a partial return of goods may achieve channel coordination but that the optimal return allowance will be a function of retailer demand therefore such a policy cannot be optimal in a multi retailer environment it is proven however that a pricing and return policy in which a manufacturer offers retailers a partial credit for all unsold goods can achieve channel coordination in a multi retailer environment this article was originally published in marketing science volume 4 issue 2 pages 166 176 in 1985

discovering price load relationships in california s electricity market this paper reports on characterizing recent price behavior in the califomia electricity market market participants that is producers consumers and traders are highly motivated by the potential for profits to develop strategies to explore and exploit the limits of system operation these strategies should be reflected in the market as different price to load relationships we show that a number of regimes i e characteristic behaviors exist in the price time series and provide a brief analysis of each regime knowledge of the number of regimes their characteristics and switching dynamics allows insight into the market and power system performance

managing product returns to achieve supply chain sustainability an exploratory study and research propositions abstract the aim of this article is to develop research propositions for product returns management using the institutional theory int as the foundation for the study the paper culminates with a research model based on this theoretical perspective to examine the input and output of product returns management as part of a comprehensive sustainability effort the study is exploratory in nature based on five case studies of participating manufacturers in the automotive and electrical and electronics industry in malaysia the interview results reveal that the five participating companies established a product returns management program to handle three types of product returns found in their organizations this is not surprising because successful product returns management has a number of internal and external benefits to the firms our interviews also uncover that the abundant amount of product returns is pressing these companies to implement an effective product returns management program based on the primary and secondary data collected in this study three propositions are developed for future research which should be tested with a large empirical data set to strengthen the theoretical contributions and managerial implications of this study

a generalized quantity discount pricing model to increase supplier s profits in this paper the joint problem of ordering and offering price discount by a supplier to his sole major buyer is analyzed the objective is to induce the buyer to alter his order schedule and size so that the supplier can benefit from lower set up ordering and inventory holding costs we generalize the quantity discount pricing model of monahan monahan j p 1984 a quantity discount pricing model to increase vendor profits management sci 30 6 720 726 to 1 explicitly incorporate constraints imposed on the amount of discount that can be offered and 2 relax the implicit assumption of a lot for lot or order for order policy adopted by the supplier an algorithm is developed to solve the supplier s joint ordering and price discount problem

electricity market price volatility the case of ontario abstract price volatility analysis has been reported in the literature for most competitive electricity markets around the world however no studies have been published yet that quantify price volatility in the ontario electricity market which is the focus of the present paper in this paper a comparative volatility analysis is conducted for the ontario market and its neighboring electricity markets volatility indices are developed based on historical volatility and price velocity concepts previously applied to other electricity market prices and employed in the present work the analysis is carried out in two scenarios in the first scenario the volatility indices are determined for the entire price time series in the second scenario the price time series are broken up into 24 time series for each of the 24 h and volatility indices are calculated for each specific hour separately the volatility indices are also applied to the locational marginal prices of several pricing points in the new england new york and pjm electricity markets the outcomes reveal that price volatility is significantly higher in ontario than the three studied neighboring electricity markets furthermore comparison of the results of this study with similar findings previously published for 15 other electricity markets demonstrates that the ontario electricity market is one of the most volatile electricity markets world wide this high volatility is argued to be associated with the fact that ontario is a single settlement real time market

california s dysfunctional electricity market policy lessons on market restructuring abstract the restructured electricity market in california has been behaving oddly and badly since summer of 2000 electricity prices have been exorbitantly high and highly volatile despite the high prices the three investor owned utilities are in dire financial shape because they cannot pass on the high costs of wholesale power to their customers due to a rate freeze many policymakers in the us and elsewhere want to know what went wrong in california trying to avoid a similar fate as they proceed with their own market liberalization plans

demand generation and price in the norwegian market for electric power we analyse the simultaneous determination of supply demand and price in the competitive norwegian electricity market deregulated in 1991 this market is pretty mature and it offers numerous data required carrying out an interesting study stochastic and seasonal water inflow water storage possibilities and demand variations make this market interesting both from a theoretical and empirical view we establish a small supply demand model of the norwegian electricity market the model is estimated using weekly data from 1994 to 1995 data for 1996 are used for post sample examination of the model unexpected inflow snow and temperature conditions explain a large part of the variation in the electricity generation demand and price within and post sample simulation of the estimated model reproduce demand and price patterns considerably well

comparative analysis of features of polish and lithuanian day ahead electricity market prices the goal of this article is to better understand the processes of electricity market price formation in poland and lithuania through an analysis of the features volatility and spikes of lithuanian and polish day ahead electricity market prices and to assess how acquired electricity price features could affect the achievement of the main goals of the national energy policy the following indicators have been calculated to determine electricity market price volatility the oscillation coefficient the coefficient of variation an adjusted coefficient of variation the standard deviation indicator the daily velocity indicator based on the overall average price and the daily velocity indicator based on the daily average price critical values for electricity market price have been calculated to evaluate price spikes this analysis reveals that electricity market price volatility is moderate in poland and high in lithuania electricity price spikes have been an observable phenomenon both in lithuanian and in polish day ahead electricity markets but they are more common in lithuania encompassing 3 15 of the time period analysed in poland and 4 68 of the time period analysed in lithuania volatile spiking and increasing electricity prices in day ahead electricity markets in lithuania and poland create preconditions and substantiate the relevance of implementation of the national energy policies and measures

deregulated power prices comparison of volatility abstract we examine electrical power price variability for 14 deregulated markets power price volatility is measured by price velocity the daily average of the absolute value of price change per hour deregulated markets show a wide variability in price velocity some price velocity is expected and arises from the daily diurnal price pattern which differs significantly between markets even when the expected daily variability in price is removed the residual unexpected variability differs between markets some deregulated markets most notably britain and spain show patterns that are predictable and consistent and have low values of unexpected price velocity these markets create a climate conducive to consumers facing the market through real time pricing and shaping consumption behaviors in response to price changes other markets for example south australia and alberta have patterns that are inconsistent and irregular and hence are hard for a customer to interpret a customer in such a market will have a higher incentive to avoid demand side management and escape risk through hedging mechanisms

deregulated power prices comparison of diurnal patterns we examine electrical power price and in particular its daily and average weekday vs weekend pattern of change for 14 deregulated markets power price in deregulated markets shows fundamentally different patterns north american markets show a monotonic diurnal weekday price pattern while all other markets studied show more than one price peak deregulated power markets differ in maximum vs minimum daily average price and in average weekday to weekend price in turn creating a different incentive for a consumer to time shift power consuming activities markets differ in the extent to which a small fraction of the days shapes the average diurnal pattern and value of price deregulated markets show a wide variation in the correlation between load and price some deregulated markets most notably britain and spain show patterns that are predictable and consistent and hence that can encourage a customer to shape consumption behaviors other markets for example south australia have patterns that are inconsistent and irregular and hence are hard for a customer to interpret a customer in such a market will have a higher incentive to escape risk through hedging mechanisms

hourly electricity prices in day ahead markets this paper focuses on the characteristics of hourly electricity prices in day ahead markets in these markets quotes for day ahead delivery of electricity are submitted simultaneously for all hours in the next day the same information set is used for quoting all hours of the day the dynamics of hourly electricity prices does not behave as a time series process instead these prices should be treated as a panel in which the prices of 24 cross sectional hours vary from day to day this paper introduces a panel model for hourly electricity prices in day ahead markets and examines their characteristics the results show that hourly electricity prices exhibit hourly specific mean reversion and that they oscillate around an hourly specific mean price level furthermore a block structured cross sectional correlation pattern between the hours is apparent

investigation of rfid investment in a single retailer two supplier supply chain with random demand to decrease inventory inaccuracy abstract inventory information inaccuracy is one of the main causes to the inventory waste in supply chain operations which motivates many companies to adopt modern tracing technologies e g radio frequency identification rfid to decrease inventory errors and strengthen the cooperation between the supply chain stakeholders considering different types of rfid possess unequal technique features in tracing items in more practical environment for the first time this paper explores the different effectiveness of rfid in decreasing the inventory inaccuracies in a supply chain containing one retailer and two suppliers firstly a novel scale factor function is introduced to illustrate the relationships between the variable cost of rfid and the non full abilities of rfid in decreasing inventory inaccuracies then under the stochastic demand and inaccurate inventory analytical models are formulated to investigate the cost effectiveness of different rfids to the optimal order quantities and the expected profits in different scenarios uncoordinated and coordinated supply chains hereby the best coordination strategies are addressed at last numerical results obtained from different scenarios on adopting rfid and a practical case level rfid system for recycling packaging cases indicate that rfid can not only decrease inventory inaccuracies but also strengthen the supply chain coordination

deregulated power prices changes over time we examine price by season and by year in 14 deregulated markets by looking at diurnal price patterns and price volatility power price volatility is measured by price velocity the daily average of the absolute value of price change per hour which is broken into a component expected from the average diurnal pattern and an unexpected component deregulated markets can be categorized into three groups stable markets markets that experienced one bad period or season of high price excursion and chaotic markets britain spain and scandinavia show consistent price patterns and low unexpected price velocity a thoughtful consumer could reasonably implement demand side management dsm by shaping consumption patterns to reflect price california new zealand and alberta are examples of markets that had a period of very high price excursion we discuss factors affecting public reaction to this australian power markets have inconsistent price patterns from season to season and year to year and very high unexpected price velocity planned dsm in these markets would be very difficult we offer four policy considerations for markets considering deregulation in the future

ethnic diversity social sanctions and public goods in kenya abstract this paper examines ethnic diversity and local public goods in rural western kenya the identification strategy relies on the stable historically determined patterns of ethnic land settlement ethnic diversity is associated with lower primary school funding and worse school facilities and there is suggestive evidence that it leads to poor water well maintenance the theoretical model illustrates how inability to impose social sanctions in diverse communities leads to collective action failures and we find that school committees in diverse areas do impose fewer sanctions on defaulting parents we relate these results to the literature on social capital and economic development and discuss implications for decentralization in less developed countries

coordination mechanisms of supply chain systems supply chain management scm has become an important management paradigm as supply chain members are often separate and independent economic entities a key issue in scm is to develop mechanisms that can align their objectives and coordinate their activities so as to optimize system performance in this paper we provide a review of coordination mechanisms of supply chain systems in a framework that is based on supply chain decision structure and nature of demand this framework highlights the behavioral aspects and information need in the coordination of a supply chain the identification of these issues points out several directions of future research in this area

building nations through shared experiences evidence from african football we examine whether shared collective experiences help build a national identity by looking at the impact of national football teams victories in sub saharan africa we find that individuals surveyed in the days after an important victory of their country s national team are 37 percent less likely to identify primarily with their ethnic group and 30 percent more likely to trust other ethnicities than those interviewed just before crucially national team achievements also reduce violence countries that barely qualified to the africa cup of nations experience less civil conflict 9 percent fewer episodes in the following months than countries that barely did not

characteristics of the prices of operating reserves and regulation services in competitive electricity markets in this paper characteristics of the prices of reserves and regulation services in the ontario new york and ercot electricity markets are studied more specifically price variability price jumps long range correlation and non linearity of the prices are analyzed using the available measures in the literature for the ontario electricity market the prices of 10 min spinning 10 min non spinning and 30 min operating reserves for the period may 1 2002 to december 31 2007 are analyzed for the new york market prices of the same reserves plus regulation service are studied for the period february 5 2005 to december 31 2008 for the ercot market we analyze the prices of responsive reserve regulation up and regulation down services for the period january 1 2005 to december 31 2009 the studied characteristics of operating reserve and regulation prices are also compared with those of energy prices the findings of this paper show that the studied reserve and regulation prices feature extreme volatility more frequent jumps and spikes different peak price occurrence time and lower predictability compared to the energy prices

the right to return this article studies the allocation of responsibility for unsold inventory provision for which is made in practically every distribution contract the two extreme cases are the consignment contract which allocates all the burden to the manufacturer and the no return contract in which retailers purchase the merchandise outright and assume responsibility for unsold inventory contract choices are shown to vary across countries industries products and types of transactions the article identifies six main factors affecting this choice optimal inventory policy in a stochastic retail demand environment relative advantage in disposing of the unsold inventory optimal risk allocation incentives to invest in promotions and provide services to increase consumer demand information asymmetry and costs associated with the consignment contract per se several testable implications are presented and the choice of contracts in the publishing industry is shown to be consistent with the predictions of the model

price protection in the personal computer industry price protection is a commonly used practice between manufacturers and retailers in the personal computer pc industry motivated by drastic declines of product values during the product life cycle it is a form of rebate given by the manufacturer to the retailer for units unsold at the retailer when the price drops during the product life cycle it is a controversial policy in the pc industry because it is not clear how such a policy benefits the supply chain and its participants we show that price protection is an instrument for channel coordination for products with long manufacturing lead times so the retailer has a single buying opportunity a properly chosen price protection credit coordinates the channel for products with shorter manufacturing lead times so the retailer has two buying opportunities price protection alone cannot guarantee channel coordination when wholesale prices are exoge nous however when the price protection credit is set endogenously together with the wholesale prices channel coordination is restored in the two buying opportunity setting with fixed wholesale prices we show that price protection has two primary impacts 1 shifting sales forward in time and 2 increasing total sales finally we present a simple numerical example that suggests given the current economics of the pc industry that price protection under fixed wholesale prices may benefit the total chain and the retailer but hurt the manufacturer

manufacturer s return policies and retail competition manufacturers returns policies are a common feature in the distribution of many products the obvious rationale for returns policies is insurance practitioners not surprisingly have a different perspective and view returns as a cost of doing business in this paper we study the strategic effect of returns policies on retail competition and highlight its profitability implications for a manufacturer the setting for our research is the distribution of products with uncertain demand limited shelf lives and retail competition our objective is to provide a better understanding of when manufacturers should adopt returns policies the insights are obtained with a model based on the economics of strategy and decision making under uncertainty we show that when retailing is competitive and there is no uncertainty in demand a returns policy subtly induces retailers to compete more intensely the provision of a returns policy reduces retail prices without affecting wholesale prices thereby reducing retailer margins and improving manufacturer profitability the intuition is that with a returns policy cournot like levels of retail stocks cannot be sustained each retailer will order stocks so that it will not be constrained by stocks and so intensifying retail competition when however demand is uncertain and there is a single retailer a returns policy encourages the retailer to over stock and so decreases upstream manufacturer profits while the provision of a returns policy leads to lower retail margins the optimality of returns policy depends on the overall uncertainty and marginal cost a returns policy reduces the dispersion in retail prices between the high and low states of demand and the range of retail prices in the returns case is contained within the range of retail prices for the no returns case in the general setting when there are competing retailers and demand is uncertain there is a trade off for the manufacturer between the benefits more intense retail competition and the costs excessive stocking of a returns policy we find that a manufacturer should accept returns when the marginal production cost is sufficiently low and demand uncertainty is not too great to validate the results of our theory we conduct an empirical test with data from a major u s retailer the tests confirm our prediction that a returns policy intensifies retail competition and reduces retailer margins our theory and empirical test should interest practitioners and researchers in distribution especially those concerned with managing retail competition

a cooperative differential game of transboundary industrial pollution between two regions abstract in recent years the transboundary pollution problems in the world are becoming more and more serious the diffusion of pollutants is common and each region which suffers from the pollution wishes that the polluter in neighboring regions would either reduce polluting or compensate for the damages this paper studies a cooperative differential game of transboundary industrial pollution between two asymmetric regions there are two novel features in this paper first there is a stackelberg game between the industrial firms and their local government while the governments can cooperate in pollution reduction second transboundary pollution damages the regions in two ways through a global accumulative pollutant and a regional non accumulative pollutant the paper characterizes the parameter spaces that governments in two neighboring regions can collaborate and gives the feedback nash equilibrium strategies of governments and industrial firms it is found that only when the governments get cooperation the regional impact caused by the neighboring region pollution diffusion could be taken into consideration when the governments develop strategies additionally a payment distribution mechanism is proposed and a subgame consistent cooperative solution is provided with such a payment distribution both governments will receive a higher payoff in a cooperative solution than in a non cooperative solution at any instant of time during the game

preferences for redistribution in the land of opportunities this paper explores how individual preferences for redistribution depend on future income prospects in addition to estimating the impact of individuals socioeconomic background and of their subjective perceptions of future mobility we employ panel data to construct dobjectivet measures of expected gains and losses from redistribution for different categories of individuals we find that such measures have considerable explanatory power and perform better than dgeneral mobilityt indexes we also find that preferences for redistribution respond to individual beliefs on what determines one s position in the social ladder ceteris paribus people who believe that the american society offers equal opportunities are more averse to redistribution d 2004 published by elsevier b v

note the role of returns policies in pricing and inventory decisions for catalogue goods manufacturers often use returns policies to encourage retailers to stock and price items more aggressively we focus on the effect that such policies have on both a retailer s and a manufacturer s profits when the retailer must commit prior to the selling season to both a stocking quantity and a price at which to sell an item such a commitment is often necessary for retailers who sell primarily through catalogues

design and planning of a closed loop supply chain with three way recovery and buy back offer abstract due to strict environmental legislations and competitive economics worldwide closed loop supply chain clsc management has been receiving increasing attention in order to improve the return rate of used products in this paper a recovery framework is proposed by employing buy back offer at retailer level the proposed recovery framework is integrated with an optimization model for a multi period clsc under demand and capacity uncertainty to determine optimal buy back price that needs to be offered to consumers so that the minimum collection limit set by the legislators is fulfilled as well as overall cost of the integrated system is minimized the developed model addresses the possibility of three way recovery options namely product remanufacturing component remanufacturing and raw material recovery to determine the optimal manufacturing remanufacturing and recycling quantity sensitivity analysis suggests that there is a trade off between the extra benefit generated through remanufacturing and the cost of acquisition of used products due to the employment of buy back offer a condition for the buy back offer to be simultaneously advantageous for both manufacturer and retailer under revenue sharing contract is derived a comparative study is also undertaken to examine the performance of the clsc when collection is made through buy back offer vs third party collection the proposed clsc model is further extended by adding a separate demand for remanufactured products and the performance of the initial model with the extended model is compared

the choice of energy saving modes for an energy intensive manufacturer considering non energy benefits in practice energy intensive manufacturers have two main options when improving their energy efficiency design and implement energy efficiency projects on their own we call this self saving or enter into an energy performance contracting epc which mainly includes shared savings and guaranteed savings in this paper we will discuss an energy intensive manufacturer facing self saving and shared savings options and how this manufacturer chooses the optimal energy saving mode when non energy benefits are considered we only consider costs and profit as non energy benefits and formulate an optimization model of self saving and a stackelberg game model of shared savings from our model analysis when considering only energy savings we find that the optimal unit savings has a monotonic impact on the optimal profit of the manufacturer our results indicate that the manufacturer will prefer the second option to the first when the investment cost factor ratio of the energy service company esco to the manufacturer is small otherwise the manufacturer will prefer the first to the second furthermore when considering non energy benefits we find that the results change in some cases

analysis of supply chains with quantity based fixed incentives abstract this paper examines the use of quantity based fixed incentives to coordinate inventory decisions in a decentralized supply chain we consider a two stage supply chain of autonomous supplier and distributor and prove that the optimal ordering policy for the newsvendor distributor under fixed incentives is an s s type policy we further show that external and internal quantity based incentives can restore channel coordination in single period and channel members can benefit through arbitrary splitting of the resulting additional chain profit the single period results are extended to multiple periods and the impact of fixed incentives on the distributor s optimal stocking policy and channel efficiency are examined under three different multi period supplier strategies numerical examples are used to compare the multi period strategies and to provide additional managerial insights the results show that contrary to common belief incentive plans developed and maintained based only on current inventory data perform poorly in long term and that such incentive plans must be periodically updated to enhance their efficiency furthermore we show that high level of incentives designed to push too much inventory downstream of the supply chain can actually reduce the chain s efficiency

strategic bidding for price taker hydroelectricity producers this paper introduces a stochastic programming model that integrates strategic bids or offers for electricity in quantities and prices in a deregulated electricity market the model is designed to maximize the profits of a producer of electricity who manages a series of power plants along a river the model is compared with a previously reported stochastic model where the bidding process is disregarded the superiority of the new model is empirically demonstrated on historical data

the quantity flexibility contract and supplier customer incentives consider a supply chain consisting of two independent agents a supplier e g a manufacturer and its customer e g a retailer the latter in turn serving an uncertain market demand to reconcile manufacturing procurement time lags with a need for timely response to the market such supply chains often must commit resources to production quantities based on forecasted rather than realized demand the customer typically provides a planning forecast of its intended purchase which does not entail commitment benefiting from overproduction while not bearing the immediate costs the customer has incentive to initially overforecast before eventually purchasing a lesser quantity the supplier must in turn anticipate such behavior in its production quantity decision this individually rational behavior results in an inefficient supply chain this paper models the incentives of the two parties identifying causes of inefficiency and suggesting remedies particular attention is given to the quantity flexibility qf contract which couples the customer s commitment to purchase no less than a certain percentage below the forecast with the supplier s guarantee to deliver up to a certain percentage above under certain conditions this method can allocate the costs of market demand uncertainty so as to lead the individually motivated supplier and customer to the systemwide optimal outcome we characterize the implications of qf contracts for the behavior and performance of both parties and the supply chain as a whole

electricity spot price dynamics beyond financial models we reveal properties of electricity spot prices that cannot be captured by the statistical models commonly used to model financial asset prices that are increasingly used to model electricity prices using more than eight years of half hourly spot price data from the new zealand electricity market we find that the half hourly trading periods fall naturally into five groups corresponding to the overnight off peak the morning peak daytime off peak evening peak and evening off peak the prices in different trading periods within each group are highly correlated with each other yet the correlations between prices in different groups are lower models adopted from the modeling of security prices that are currently applied to electricity spot prices are incapable of capturing this behavior we use a periodic autoregression to model prices instead showing that shocks in the peak periods are larger and less persistent than those in off peak periods and that they often reappear in the following peak period in contrast shocks in the off peak periods are smaller more persistent and die out perhaps temporarily during the peak periods current approaches to modeling spot prices cannot capture this behavior either

channel coordination and quantity discounts this paper presents a model for analyzing the impact of joint decision policies on channel coordination in a system consisting of a supplier and a group of homogeneous buyers the joint decision policy characterized by the unit selling price and the order quantity is coordinated through quantity discounts and franchise fees both the annual demand rate and the operating cost including the purchase ordering and inventory holding costs depend on the joint decision policy employed this paper contributes by integrating work addressing quantity discounts on inventory and ordering policies and work focusing on the control mechanism provided by quantity discounts in channel coordination it is shown that the optimal all unit quantity discount policy is equivalent to the optimal incremental quantity discount policy in achieving channel coordination furthermore it is shown that quantity discounts alone are not sufficient to guarantee joint profit maximization the analyses of the general models are illustrated by specific analytical results obtained for a given demand function