services deepening and the transmission of monetary policy the structural transformation from manufacturing to services comes with a process of services deepening the services share of intermediate inputs rises over time moreover inflation reacts less to monetary policy shocks in countries that are more intensive in services intermediates we rationalize these facts using a two sector new keynesian model where trends in sectoral productivities generate endogenous variations in the input output matrix services deepening reduces the contemporaneous response of inflation to monetary policy shocks through a marginal cost channel since services prices are stickier than manufacturing prices the rise of services intermediates raises the sluggishness of sectoral marginal costs and inflation rates

the role of market forces in assuring contractual performance the conditions under which transactors can use the market repeat purchase mechanism of contract enforcement are examined increased price is shown to be a means of assuring contractual performance a necessary and sufficient condition for performance is the existence of price sufficiently above salvageable production costs so that the nonperforming firm loses a discounted steam of rents on future sales which is greater than the wealth increase from nonperformance this will generally imply a market price greater than the perfectly competitive price and rationalize investments in firm specific assets advertising investments thereby become a positive indicator of likely performance

experts and quacks what happens when type is endogenous in a reputational setting here customers cannot tell experts from imitative quacks but gain information through repeated interaction firm incentives to invest in expertise vary nonmonotonically in how tolerant customers are of bad outcomes more tolerant customers are both more forgiving making expertise less necessary and longer tenured increasing the value of retaining them in equilibrium the proportion of expert firms is bounded away from one some quacks are necessary to keep incentives of experts in line the fraction of experts is decreasing in customers switching costs and the relative cost of expertise over quackery

factoryless goods producing firms abstract this paper documents the existence and characteristics of us firms that do not manufacture themselves but nonetheless are heavily involved in the production of goods these factoryless goods producing firms fgpfs are formally in the wholesale sector but unlike traditional wholesale firms fgpfs design the goods they sell and coordinate production activities fgpfs in the wholesale sector are larger and younger pay higher wages span more sectors and had more manufacturing employment in previous years compared to traditional wholesalers fgpfs are more likely to import than typical wholesalers though their imports constitute a smaller share of their total domestic activity

eoq models for a coordinated two level international supply chain considering imperfect items and environmental impact abstract for a two level supply chain models are presented to determine the optimal production shipment policy for items with imperfect quality in three different scenarios a both the vendor and the buyer are in the same country b the vendor and the buyer are in different countries where the stochastic behavior of the exchange rate between the two countries is modeled using a mean reverting process and c environmental impact is incorporated in determining the optimal production shipment policy by taking into account the fixed and variable carbon emission costs the objective is to minimize the total expected cost per unit time for each scenario considering equal shipment size the total expected cost per unit time is derived and the solution procedure is proposed numerical examples are presented and the results are discussed

an eoq model with partial backordering and advance payments for an evaporating item abstract in the classic economic order quantity model the purchasing cost of an order is paid at the time of its receipt in some cases retailers ask purchasers to pay all or a fraction of the purchasing cost in advance and may allow them to divide the prepayment into several equal sized parts in this paper an economic order quantity model for an evaporating item with partial backordering and partial consecutive prepayments is developed with a real case study of a gasoline station real numerical examples illustrate the proposed model and the solution method

sustainable economic production quantity models for inventory systems with shortage abstract recently new economic order production quantity models have shifted away from focusing only on economic issues and towards combined economic environmental concerns because of sustainable development goals despite this shift only a few works have addressed sustainable economic production quantity epq the theoretical sustainable eoq and epq models are basic models that ignore many real life conditions such as the possibility of stock out in inventory systems in this paper we develop four new sustainable economic production quantity models that consider different shortage situations to find optimal values of inventory system variables we solve four independent profit maximization problems for four different situations these proposed models include a basic model in which shortages are not allowed and when shortages are allowed the lost sale full backordering and partial backordering models can be selected by operations managers depending on the manufacturer s motivation to improve service levels we have also proposed an algorithm for determining optimum values of the decision variables for these sustainable economic production quantity models finally the formulated models are explained with some different examples and the obtained results have been analyzed and discussed these results show that the sustainable economic production quantity with partial backordering model is a general and more realistic model that can be used in many real cases with a reasonable profit amount compared with the three other proposed models

the economics of breakdowns checkups and cures a market in which the owner of a durable good x contracts with an expert for diagnostic and treatment services is studied good x may be in one of three states health disease or failure only experts can determine whether x is healthy or diseased and perform treatment the owner cannot tell whether recommended treatment is really needed this creates an information based demand for health insurance by risk neutral consumers imperfections in the market for spot insurance may give rise to free diagnostic checks strategic procrastination and long term health maintenance agreements

what lies between market and hierarchy insights from internalization theory and global value chain theory in this paper we suggest that internalization theory might be extended by incorporating complementary insights from gvc theory more specifically we argue that internalization theory can explain why lead firms might wish to externalize selected activities but that it is largely silent on the mechanisms by which those lead firms might exercise control over the resultant externalized relationships with their gvc partners we advance an explanation linking the choice of control mechanism to two factors power asymmetries between the lead firms and their gvc partners and the degree of codifiability of the information to be exchanged in the relationship

honesty in a model of strategic information transmission we consider the following simple model of consumer fraud consumers need one of two possible repairs an expensive repair denoted e or an inexpensive repair denoted i the exogenous probability that a consumer needs the more costly remedy is r each consumer is assumed to know r an expert can observe with certainty which of the two repairs is needed and can offer to sell either to the consumer in a simple extension we allow for uncertainty with respect to the expert s observation we assume that selling the expensive remedy to a consumer who needs only the inexpensive one is more profitable than selling the inexpensive one thus h eii h1 iji where h denotes profit and i denotes conditional on needing the profit functions are increasing in the price of the respective repairs for convenience we suppress the dependence of h on prices in our notation we also assume that a consumer prefers to obtain the appropriate repair to the inappropriate one thus u eie u ije and u iii u eii where u is the consumer s payoff lastly we assume that the functions u eje and u e i are decreasing in the price of the expensive repair and that u iie and u iii are decreasing in the price of the inexpensive repair we also assume that u iie is decreasing in the price of the expensive repair since the consumer ultimately buys the expensive repair in this case see below for further assumptions regarding the repairs we are interested in the equilibrium levels of honesty in this model how honest is the expert at the equilibrium do consumers always follow the expert s advice does the level of honesty increase as the interests of the agents become more similar in a sense to be defined below our assumptions are similar to those in the abstract strategic information transmission models of vincent crawford and joel sobel 1982 and jerry green and nancy stokey 1980 we follow the former paper which asks whether the signals sent become less noisy as the agents preferences become more similar despite the similarity of our model to crawford sobel s we arrive at some different conclusions with respect to the expert s honesty vis a vis the agents closeness of interests we explain this in detail in section iii in addition we allow that the expert may be uncertain about the true state of the world we also explicitly model the level of expert honesty which extends crawford sobel the outline of the paper is as follows in section i we provide the details of the model and show that a unique equilibrium exists comparative static results and a simple extension incorporating the assumption of the incompetent expert are given in section ii we draw comparisons with crawfordsobel in section iii in section iv we conclude with a brief summary

credence goods costly diagnosis and subjective evaluation we study contracting between a consumer and an expert the expert can invest in diagnosis to obtain a noisy signal about whether a low cost service is sufficient or whether a high cost treatment is required to solve the consumer s problem this involves moral hazard because diagnosis effort and signals are not observable treatments are contractible but success or failure of the low cost treatment is observed only by the consumer payments can therefore not depend on the objective outcome but only the consumer s report or subjective evaluation a failure of the low cost treatment delays the solution of the consumer s problem by the high cost treatment to a second period we show that the first best solution can always be implemented if the parties discount rate is zero an increase in the discount rate reduces the range of parameter combinations for which the first best can be obtained in an extension we show that the first best is also always implementable if diagnosis and treatment can be separated by contracting with two different agents

the carbon constrained eoq model with carbon emission dependent demand abstract currently companies are looking for solutions to reduce carbon emissions associated with their operations operational adjustments such as modifications in batch sizes or order quantities have proven to be an effective way to decrease emissions in this paper a novel model is proposed that takes into account the link between an inventory policy eoq total carbon emissions and both price and environmental dependent demands in the case of an exogenous price two optimal quantities are determined which maximize a retailer s profit and which minimize carbon emissions conditions that allow a company to maximize profit while minimizing emissions and mechanisms that allow a firm to maximize its profit and to decrease its carbon emissions are determined in the case of an endogenous price some empirical results are also discussed when a firm optimizes its profit through both its selling price and its order quantity some experiments match empirical observations on the one hand an environmental strategy is more significant for cheaper and green labeled products on the other hand a public mechanism such as a carbon tax will decrease total and marginal emissions

price competition between an expert and a non expert abstract this paper characterizes price competition between an expert and a non expert in contrast with the expert the non expert s repair technology is not always successful consumers visit the expert after experiencing an unsuccessful match at the non expert this re entry affects the behavior of both sellers for low enough probability of successful repair at the non expert all consumers first visit the non expert and a timid pricing equilibrium results if the non expert s repair technology performs well enough it pays for some consumers to disregard the non expert a visit they directly go to the expert s shop and an aggressive pricing equilibrium pops up for intermediate values of the non expert s successful repair a mixed pricing equilibrium emerges where the expert randomizes over the monopoly price and some lower price

short term contracts and long term agency relationships abstract long term contracts are valuable only if optimal contracting requires commitment to a plan today that would not otherwise be adopted tomorrow we show that commitments are unnecessary and hence short term contracts are sufficient if 1 all public information can be used in contracting 2 the agent can acess a bank on equal terms with the principal 3 recontracting takes place with common knowledge about technology and preferences and 4 the frontier of expected utility payoffs generated by the set of incentive compatible contracts is downward sloping at all times

role of multiple stakeholders and the critical success factor theory for the sustainable supplier selection process abstract the concept of sustainability has become an essential theme for many industries and organisations due to a heightened sensitivity towards environmental protection and social responsibility at the same time firms still need to achieve economic viability and retain their competitive advantage because suppliers are the first entity and the initial source of any supply chain organisations should select their suppliers by a careful evaluation of their critical success factors csf achieving a successful sustainable supply chain management sscm strategy requires a firm to consider its stakeholders views based on the csf theory and by considering the multi stakeholders view in a sustainability perspective this work provides a decision support system for the sustainable supplier selection sss problem in a real world textile industry located in the emerging economy of india through a three phase methodology this study examines indian suppliers by considering the sustainability views of various stakeholders including employees customers researchers shareholders and a government environmental officer the csf priorities show that the first four influential csfs are categorized as social concerns i e maintaining long term relationships and alliances stakeholder empowerment equity labour sources and individual human rights the fifth factor is an environmental issue i e production of polluting agents among the five suppliers being evaluated in this work supplier 4 receives the top ranking specifically the results show that the supplier rankings are highly influenced by csf s social dimensions hence to validate the influence of csf s social dimensions in relation to the sss process a sensitivity analysis has been done by varying the respective weights the study concludes with the relevant managerial implications and limitations

including sustainability criteria into inventory models research on sustainability performance has considerably enriched operations management literature in recent years however work with quantitative models is still scarce this paper contributes by revisiting classical inventory methods taking sustainability concerns into account we believe that reducing all aspects of sustainable development to a single objective is not desirable we thus reformulate the classical economic order quantity model as a multiobjective problem we refer to this model as the sustainable order quantity model then a multi echelon extension of the sustainable order quantity model is studied for both models the set of efficient solutions pareto optimal solutions is analytically characterized these results are used to provide some insights about the effectiveness of different regulatory policies to control carbon emissions we also use an interactive procedure that allows the decision maker to quickly identify the best option among these solutions the proposed interactive procedure is a new combination of multi criteria decision analysis techniques

a century of evolution from harris s basic lot size model survey and research agenda abstract determining the economic lot size has always represented one of the most important issues in production planning this problem has long attracted the attention of researchers and several models have been developed to meet requirements at minimum cost in this paper we explore and discuss the evolution of these models during one hundred years of history starting from the basic model developed by harris in 1913 up to today following harris s work a number of researchers have devised extensions that incorporate additional considerations the evolution of eoq theory strongly reflects the development of industrial systems over the past century here we outline all the research areas faced in the past by conducting a holistic analysis of 219 selected journal papers and trying to give a comprehensive view of past work on the eoq problem finally a new research agenda is proposed and discussed

beyond sustainability transforming industrial zero valued residues into increasing economic returns abstract excessive industrialization is creating enormous economic gaps chaos and unequal societies that are approaching dangerous limits simultaneously large quantities of residues waste and ecological footprints have been created in detriment to the natural environment and the quality of life of most of the planet s population mainly in developing regions this presents most innovators with a new dilemma invest in sustainable long term projects with low economic returns or innovate in short term incremental production and negotiate the environmental harm caused by an excessive industrialization in fact a significant milestone emerges from these arguments somehow we must reverse the perverse cycle created by industrialization and transform the current ecological footprint into valuable assets for all sub systems of the biosphere a proposal has been designed to go beyond sustainability and create sustainable wealth based on the modification of the conventional growth paradigm that can be used to regenerate regional natural resources and simultaneously be economically competitive and capable of offering important social benefits to the community the proposed framework swit sustainable wealth creation based on innovation and technology has been developed to provide multiple businesses of zero value residue industrial ecology processes zries inserted into circular value ecosystems cves all managed and governed by a sustainable sharing value system for the benefit of a community several cases of the application of the sustainable wealth creation framework mainly in developing countries are described

a sustainable production inventory model for a controllable carbon emissions rate under shortages abstract carbon emissions are the key factor of global warming nowadays some countries have focused on reducing carbon emission carbon tax and cap policies are the key mechanism utilized in many countries to achieve this keeping this issue in mind a sustainable economic production quantity sepq carbon tax and cap model has considered for a controllable carbon emissions rate by investing in green technology gt efforts under different with and without shortage situations this study has three models a a sustainable economic production quantity carbon tax and cap model with no shortages b a sustainable economic production quantity carbon tax and cap with partial backordering and c a sustainable economic production quantity carbon tax and cap with full backordering with and without green technology investment a solution methodology has been proposed for determining the optimal strategies of cycle time green technology investment and the fraction period length in positive inventory level several numerical examples have studied to validate the sustainable economic production quantity models the results of this paper are a sustainable economic production quantity carbon tax and cap partial backlogging case has a better justifiable profit with the highest cycle time and the lowest value of the fraction length period as well as the lower green technology investment cost compared with other models finally sensitivity analysis has provided with the managerial implication of the optimal feasible solution with respect to some key parameters

price and quality cycles for experience goods we explore a dynamic competitive model for experience goods and study an equilibrium for it in which firms plan initially to produce high quality at low price then high quality at high price then low quality at high price each consumer is aware that all firms eventually intend to run down their reputations at customers expense yet he rationally chooses to wait for direct evidence that the firm to which he is attached has already entered into the exploitative phase

environmentally responsible inventory models non classical models for a non classical era abstract mathematical models of inventory typically include the three inventory associated costs of surplus shortage and ordering these classic inventory models are then analysed so as to choose inventory parameters that usually minimise the total cost of operating the inventory system being investigated unfortunately classic inventory models do not provide a meaningful basis for analysing many real and increasingly important practical inventory problems and situations it is therefore not surprising that over recent years several authors have discussed these issues in broad terms and suggested that a new paradigm needs to be developed this paper develops some specific aspects of this discussion in particular the paper identifies a range of inventory problems that are not covered appropriately by traditional inventory analysis one of these is to design responsible inventory systems i e systems that reflect the needs of the environment the paper then examines the importance of inventory planning to the environment in greater detail for example packaging is important not only because of its costs and the protection that it provides to the inventory items but also because of its eventual effects on the environment in terms of the use of resources and potential landfill for similar reasons waste which can result from poor inventory management is highly important the location of stores is important because location affects transport costs thus the influence of the secondary aspects of most inventory models packaging waste and location are important but even more important are the inter relations with the total system in particular the location of the manufacturing plants and the effect that inventory planning has on the logistics chain potentially have considerable environmental implications inventory is part of a wider system however until the cost charged for an activity reflects the true environmental cost of that activity it is likely that decisions will be made on the basis of erroneous data in that situation we are faced with either determining the environmental cost of specific actions or to use environmental costs that are somewhat contrived in which case it may be more sensible to use very different performance measures and models the paper discusses these ideas and ways in which inventory policies may reassure us with our environmental concerns

the economic order quantity model revisited an extended exergy accounting approach abstract the economic order quantity eoq model has been popular among academicians and practitioners for decades despite the many variants of the eoq that have appeared in the literature to fine tune it to reality it still has limitations a major one is that it does not take into account the hidden costs inherent in inventory systems some of these costs relate to sustainability issues including environmental social labor and economic effects this paper considers some of these costs referred to as the exergetic costs and estimates them using the extended exergy accounting eea approach extended exergy accounting assigns equivalent exergetic values to capital labor and environmental remediation costs of a system the analysis combines the classical exergy analysis with the sustainability factors which are the labor capital and environment the paper uses an exergetic model to determine the eoq inventory policies for three firms operating in the usa germany and china the results show that the eoq is different for the three firms because the equivalent exergy of capital labor and environment remediation costs is different in each country

warranties durability and maintenance two sided moral hazard in a continuous time model double moral hazard in continuous time generates the familiar warranty pattern with full coverage for an initial block of time the more complete the warranty the better the producer s durability incentives and the worse the consumer s maintenance incentives using continuous time highlights the need for some warranty bound to avoid reaching the first best as an unreasonable limit early in the paper an exogenous bound is used while later the bound arises endogenously from the possibility of abuse and repair a quadratic example shows that the warranty s duration depends on the relative severity of the two moral hazard problems

product warranties and double moral hazard this article explores a model of warranties in which moral hazard problems play a key role the goal is to understand the important characteristics of warranties including their provision of incomplete insurance and the relationship between product quality and coverage we analyze a model in which buyers and sellers take actions that affect a product s performance since these actions are not cooperatively determined an incentives problem arises we characterize the optimal warranty contract and undertake comparative statics to determine the predicted correlation of warranty coverage and product quality

the sustainability of anaerobic digestion plants a win win strategy for public and private bodies abstract energy production from the anaerobic digestion of organic waste is widely recognized as a social and environmental opportunity since it allows reducing waste disposal and making waste management economically profitable however profitability of these plants is strongly affected by the quantity and the quality of wastes as well as by the availability of local subsidies the key role of incentive policies in the economic success of investments in biomass to energy plants is highly recognised and has led european union eu governments to promote the deployment of these plants incentive policies adopted in eu countries differ significantly in this paper an evaluation model based on cost benefit analysis is developed in order to identify the production based incentive rates making investments in anaerobic digestion plant economically feasible without reducing social and environmental positive impacts the model has been applied to the case of energy production plants from anaerobic digestion of cattle manure in order to investigate the influence of the plant size on the investment profitability different waste collection areas have been considered environmental performances of the plants have been evaluated by adopting a life cycle assessment approach results obtained confirm the environmental benefits achievable through the energy production from the anaerobic digestion of cattle manure however the current production based incentive rates provided in most eu countries revealed an inadequate balance between private and public interest since they make profitable the investments only in case of small plants

relying on the information of interested parties we investigate the conventional wisdom that competition among interested parties attempting to influence a decisionmaker by providing verifiable information elicits all relevant information we find that if the decisionmaker is strategically sophisticated and well informed about the relevant variables and about the preferences of the interested party or parties competition may be unnecessary to achieve this result if the decisionmaker is unsophisticated or not well informed competition is not generally sufficient if the interested parties interests are sufficiently opposed however or if the decisionmaker is seeking to advance the parties welfare then competition can reduce or even eliminate the decisionmaker s need for prior knowledge about the relevant variables and for strategic sophistication in other settings only the combination of competition among information providers and a sophisticated skepticism is sufficient to allow effective decisionmaking