a nonparametric cost approach to scale efficiency starting with farrell fieldhouse 1962 a host of notiparametric models have been developed for calculation of scale efficiency a common property of these models is that they are specified in terms of input output data duality theory has taught us that technological characteristics may be analyzed from either the primal or the dual cost side the purpose of this paper is to introduce a nonparametric dual method of calculating scale efficiency

equivalence and implementation of alternative methods for determining returns to scale in data envelopment analysis abstract this paper discusses alternative methods for determining returns to scale in dea the methods for estimating returns to scale in dea as developed by banker 1984 banker charnes and cooper 1984 and banker and thrall 1992 are proved to be conceptually equivalent to the two stage methods of fare grosskopf and lovell 1985 when their assumptions apply here the emphasis is on the ccr model of dea and very simple methods are introduced for determining returns to scale locally with this model by reference to banker s concept of most productive scale size

when not all conflict is bad manufacturing marketing conflict and strategic incentive design researchers and managers broadly agree that coordination and harmony between manufacturing and marketing improve firm performance by eliminating suboptimal practices within the firm in this paper we present a contrasting view of the manufacturing marketing interface we model a duopoly in which the firms compete on price and quality dimensions the manufacturing and marketing managers within each firm are presented with conflicting incentives focused on cost minimization and revenue maximization respectively these managers bargain with each other before arriving at compromise decisions regarding price and quality while frequently encountered in practice this conflicting objectives puzzle is surprising because one expects that centralized coordination by the owners of the firm towards profit maximization would lead to higher profits in this paper we resolve the conflicting objectives puzzle and demonstrate that surprisingly the firm s resulting profits in this setting of conflict can be higher than those obtained when the decisions of the managers are perfectly coordinated we also analyze the equilibrium in incentive plans when the owners can choose between compromise and perfect coordination our results offer a new interpretation of manufacturing marketing conflict as a strategic tool that can enhance firm profits

technical note delegating pricing responsibility to the salesforce in this paper we use an agency theory framework to address the issue of delegating pricing responsibility to the salesperson in this analysis it is shown that delegating the pricing responsibility to the salesperson is as profitable as centralization when the salesperson and the sales manager have identical information about the selling environment but delegation may be more profitable when the saleperson s information is superior to that of the sales manager s it is also argued that this characteristic is typical of market conditions where we observe delegation of such responsibility in cases identified by weinberg weinberg c b 1975 an optimal commission plan for salesman s control over price management sci 21 8 april 937 943 and stephenson cron and frazier stephenson p r w l cron g frazier 1979 delegating pricing authority to the salesforce the effects on sales and profit performance j marketing43 april 21 28

estimation of returns to scale using data envelopment analysis a comment banker 1984 introduced the idea that the sum of the intensity variables in the dea activity analysis model can be used to identify returns to scale a counterexample in chang and guh 1991 shows that banker s method may fail this prompted banker and thrall 1992 to develop an alternative approach to estimate scale efficiency using dea seemingly unaware of the work by byrnes fare and grosskopf 1984 fare grosskopf and lovell 1985 1994 and fare and grosskopf 1985 etc on the same topic their new approach is very similar to the methodology originated in these references the purpose of this comment is to make our method known and to contrast it to the banker and thrall 1992 approach

efficiency analysis for exogenously fixed inputs and outputs we evaluate by means of mathematical programming formulations the relative technical and scale efficiencies of decision making units dmus when some of the inputs or outputs are exogenously fixed and beyond the discretionary control of dmu managers this approach further develops the work on efficiency evaluation and on estimation of efficient production frontiers known as data envelopment analysis dea we also employ the model to provide efficient input and output targets for dmu managers in a way that specifically accounts for the fixed nature of some of the inputs or outputs we illustrate the approach using real data for a network of fast food restaurants

delegating pricing decisions in competitive markets with symmetric and asymmetric information delegating pricing decisions to the salesforce has been a salient issue for marketing academics and practitioners we examine this issue in a competitive market using standard agency theory with symmetric and asymmetric information under symmetric information we find that the optimal contracts have a nice property that allows managers to reach the upper bound on firms profit by using either centralized or delegated pricing and hence there are no incentive based reasons to prefer centralized versus delegated contract types thus managers can focus on the design of the optimal incentive scheme without worrying about the contract type under asymmetric information we find that there always exists an equilibrium where all firms use centralized pricing that is either unique or payoff equivalent to equilibria that have a combination of contract types these results are robust to a large class of agent and market parameters however if restrictions are exogenously imposed on contract form or observability the above results are no longer true as in earlier work we demonstrate our results by providing explicit solutions under the holmstrom and milgrom 1987 framework

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

why do salespeople spend so much time lobbying for low prices in business to business settings a company s sales force often spends considerable time lobbying internally for authorization to charge lower prices these internal lobbying activities are time consuming and divert attention from other tasks such as interacting with customers we explain why internal lobbying activities serve an important role they help the firm elicit truthful reporting of demand information from the sales force as a result it may be profitable for the firm to require lobbying and make the requirement onerous even though lobbying is a nonproductive activity that creates an additional administrative burden and imposes a deadweight loss

providing a measure for bullwhip effect in a two product supply chain with exponential smoothing forecasts abstract in this paper a two product and two echelon supply chain is considered in order to quantify the bullwhip effect demands of the products are correlated and are represented by a first order vector autoregressive model retailer uses order up to ordering policy for replenishment of stocks and utilizes exponential smoothing forecast method to predict demand in lead time period according to the mentioned assumptions an equation is derived for bullwhip effect measurement and then a numerical example is presented for a better perception of the bullwhip effect behavior when the parameters change a comparison of the bullwhip effect measure has been done when two main forecasting methods i e exponential smoothing and moving average are used and empirical results are provided at last a cost analysis is conducted based on shortage and holding cost under different bullwhip effect measures

centralized pricing versus delegating pricing to the salesforce under information asymmetry the issue of delegating pricing responsibility to the salesforce is of interest to marketing academics and practitioners it has been shown by lal 1986 that under certain situations with information asymmetry it is more profitable for the firm to delegate pricing authority to the salesforce than to have centralized pricing in this paper we re examine situations where information asymmetry exists and analyze its effect on the decision of the firm to set a price or delegate pricing responsibility to the salesforce using contract theory we find that when the salesperson s private information can be revealed to the firm through contracting centralized pricing performs at least as well as price delegation we derive the optimal centralized pricing contract under a set of standard assumptions used in the economics and business literature

technical efficiency unions and decentralized labor contracts abstract this paper explores the link between the presence of unions in the workplace the adoption of decentralized labor agreements and technical efficiency using a large sample of italian manufacturing firms we apply the data envelopment analysis and its robust version based on bootstrap theory to get reliable estimates of technical efficiency at the firm level in a standard first stage we devote particular attention to the specific technology adopted by distinguishing 20 different sector frontiers as well as to the presence of outliers the obtained efficiency scores are analyzed in a second stage applying a truncated regression model estimated via maximum likelihood following the simar and wilson 2007 2011 methodology our results highlight that the presence of workplace unionization decreases the level of technical efficiency while aspects limiting the unions power such as a strong exposure to international markets high debt levels or the prevalence of flexible assets partially reduce the negative effect however when firms adopt decentralized labor contracts agreements the effect on efficiency is positive and partially compensates the negative unions effect

are football managers as efficient as coaches performance analysis with ex ante and ex post inputs in the premier league there is a controversy on sport performance literature about what type of inputs might explain more deeply the performance of sports clubs inputs specification controversy by one side several p

costs and benefits of inducing intrabrand competition the role of limited liability when is inducing intrabrand competition via nonexclusive distribution an optimal strategy to address this issue a static model is developed to examine two settings the manufacturer uses exclusive distributors in the first setting and nonexclusive distributors in the second the analysis indicates that the choice of distribution rests critically on whether the manufacturer can effectively extract surplus from the distributors due to a variety of institutional reasons the distributors liability is often limited in performing on behalf of the manufacturer such limited liability restricts how much of the distributors surplus can be extracted when the distributors surplus cannot be fully extracted the manufacturer may prefer nonexclusive distribution even when distributors can free ride on each other s efforts

strategic decentralization in channels the purpose of this paper is to understand the effect of strategic interaction on a manufacturer s channel structure decision in the model i analyze if there were no strategic interaction then the manufacturer would prefer vertical integration to decentralization with strategic interaction however decentralization can be a nash equilibrium strategy as mcguire and staein mcguire timothy richard staelin 1983a an industry equilibrium analysis of downstream vertical integration marketing sci 2spring 161 192 showed so the question arises what is it about strategic interaction that makes decentralization a nash equilibrium strategy the answer i give is that strategic interaction makes it possible for a manufacturer s retail demand curve to rise when he decentralizes i show that this raising of the demand curve on decentralization can happen only if one of the following mutually exclusive conditions is satisfied 1 the manufacturers products are demand substitutes at the retail level and strategic complements at the manufacturer or retailer levels 2 the manufacturer s products are demand complements at the retail level and strategic substitutes at the manufacturer or retailer levels strategic complementarity at the retailer manufacturer level means that if one retailer manufacturer raises his price then the other retailer manufacturer would raise his price as well strategic substitutability is just the opposite these results show that what is important for decentralization to occur is not how demand substitutable the two manufacturers products are as one might have thought from earlier works in the literature but rather the nature of coupling between demand dependence and strategic dependence

forecast frequency in rolling horizon hedging heuristics for capacity expansion this paper describes a simulation study of the effect of forecast revisions and hedges against demand uncertainty in a rolling horizon heuristic for capacity expansion the model is based on data collected in the utilities division of a large chemical manufacturing plant a seasonal integrated moving average model for the demand is used to generate forecasts while capacity additions are determined by applying a simple timing rule to various hedges around the forecast the simulation results indicate that hedging forecasts by their prediction limits rather than a fixed buffer significantly reduces undercapacity at the expense of a small increase in capacity cost the prediction limit hedge is more robust to delays in reforecasting

nonparametric estimation of education productivity incorporating nondiscretionary inputs with an application to dutch schools in this paper we develop a malmquist productivity index for public sector production characterized by the influence of environmental variables we extend johnson and ruggiero 2011 to the more general case of variable returns to scale to further decompose the malmquist productivity index into technical efficiency scale and environmental change we apply our model to analyze productivity of dutch schools using 2002 2007 data the results indicate that the environment influences the productivity index as well as the technical efficiency scale and environmental change components we see that schools with a moderate classification of environment have the highest productivity numbers in line with expectations schools with the worst environment also perform worse and would perform better with an improved environment

measure of bullwhip effect in supply chains the case of high order autoregressive demand process abstract bullwhip effect the phenomenon in which variance of demand is amplified when moving upstream has attracted the attention of many researchers for the last few decades although the main sources that cause bullwhip effect have been identified quantifying the bullwhip effect still remains a challenge in the past measuring the bullwhip effect for supply chains with autoregressive demand process has been conducted by some researchers however most past researches focused mainly on the simple ar 1 model in many practical situations autoregressive models with higher order should be employed because they might better represent the demand process up to now very little effort has been spent on this matter therefore this research is conducted to fill this gap by first dealing with ar 2 demand process and investigating the behavior of the developed measure with respect to autoregressive coefficients and order lead time extension to the general ar p demand process is then considered

application of multi steps forecasting for restraining the bullwhip effect and improving inventory performance under autoregressive demand recent research suggests that the bullwhip effect or increasing variability of inventory replenishment orders as one moves up a supply chain illustrates inventory management inefficiencies this paper quantifies the bullwhip effect in the case of serially correlated external demand if autoregressive models are applied to obtain multiple steps demand forecasts a materials requirements planning mrp based inventory management approach is proposed to reduce the order variance simulation modeling is used to investigate the impact of the forecasting method selection on the bullwhip effect and inventory performance for the most downstream supply chain unit the mrp based approach is shown to reduce magnitude of the bullwhip effect while providing the inventory performance comparable to that of a traditional order up approach the application of autoregressive models compares favorably to other forecasting methods considered according to both the bullwhip effect and inventory performance criteria

strategic corporate social responsibility and economic performance this article proposes a novel corporate social responsibility csr index based on a data envelopment analysis dea model acknowledging the argument that companies might favour those csr dimensions that provide strategic competitive advantages we argue that the index can capture companies strategic approach to csr furthermore our findings reveal a neutral relationship between this strategic csr index and economic performance as measured by return on assets roa and tobin s q when controlling for firm unobserved heterogeneity and past economic performance by contrast an equally weighted index of the same csr indicators is found to be negatively related with roa which reinforces our claim that this specific dea based index is a measure of strategic csr

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

cost efficiency of french rugby clubs this article analyses the cost efficiency of french first league rugby clubs using a stochastic frontier model the frontier estimation confirmed that the model fits the data well with all coefficients correctly signed and in line with the theoretical requirements the results show that one of the clubs is operating efficiently with the majority of clubs clustered around 20 inefficiency policy implications are derived

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

relationship organization and price delegation an experimental study price delegation to the salesforce is a practice widely adopted by firms this paper examines the relationship between price delegation and managerial profits using a laboratory economics experiment a novel feature of our experiment is that we study how varying the relationship organization of the sales manager and salesperson to allow for 1 requests by the salesperson for the manager to choose price delegation and for 2 the manager to award a small bonus after observing the salesperson s decisions can affect behavior the results show that contrary to the theoretical prediction managers choose price delegation frequently and salespeople respond reciprocally leading to higher manager profits under price delegation moreover this behavior increases when requests and bonuses are allowed we show that a behavioral economics model that incorporates positive reciprocity can explain these results well data as supplemental material are available at http dx doi org 10 1287 mnsc 2013 1778 this paper was accepted by pradeep chintagunta marketing

regulatory reforms and productivity an empirical analysis of the japanese electricity industry the japanese electricity industry has experienced regulatory reforms since the mid 1990s this article measures productivity in japan s steam power generation sector and examines the effect of reforms on the productivity of this industry over the period 1978 2003 we estimate the luenberger productivity indicator which is a generalization of the commonly used malmquist productivity index using a data envelopment analysis approach factors associated with productivity change are investigated through dynamic generalized method of moments gmm estimation of panel data our empirical analysis shows that the regulatory reforms have contributed to productivity growth in the steam power generation sector in japan

hypercongestion in production correspondences an empirical exploration this empirical contribution reviews the rather limited existing literature measuring congestion in production it first compares current ways to measure congestion using nonparametric specifications of technologies in particular it focuses on the magnitude and incidence of the congestion detected in empirical studies using traditional radial efficiency measures thereafter it shows the limitations of this radial measurement and how alternative measurement schemes may reveal higher amounts of congestion then the new more general methodology of measuring s congestion is presented in particular we first present a numerical example to illustrate the way the s disposable technologies allow to capture more extreme forms of congestion by setting empirically determined upper bounds to the wasting of inputs then an empirical illustration is presented based on an existing sample of data a final section concludes

salesforce compensation plans in environments with asymmetric information in this paper we present a theory of salesforce compensation plans to provide insights into why it may be advantageous for a profit maximizing firm to offer members of its salesforce the opportunity to choose from a menu of compensation plans although such contractual arrangements are not commonly used in the industry they have been introduced and implemented by firms such as ibm and st regis paper as in our previous work on salesforce compensation plans basu lal srinivasan and staelin basu a k r lal v srinivasan r staelin 1985 salesforce compensation plans an agency theoretic perspective marketing sci 4 fall 267 291 we use an agency theory framework in this paper we relax the assumptions of information symmetry and salesforce homogeneity and show the conditions under which it is optimal to offer a menu of compensation plans we also show that even when these assumptions are relaxed there are situations where offering a single plan characterized by basu lal srinivasan and staelin basu a k r lal v srinivasan r staelin 1985 salesforce compensation plans an agency theoretic perspective marketing sci 4 fall 267 291 is still optimal insights gained from the analyses are discussed in the context of an existing compensation scheme

sharing demand information in competing supply chains with production diseconomies this paper studies the incentive for vertical information sharing in competing supply chains with production technologies that exhibit diseconomies of scale we consider a model of two supply chains each consisting of one manufacturer selling to one retailer with the retailers engaging in cournot or bertrand competition for cournot retail competition we show that information sharing benefits a supply chain when 1 the production diseconomy is large and 2 either competition is less intense or at least one retailer s information is less accurate a supply chain may become worse off when making its information more accurate or production diseconomy smaller if such an improvement induces the firms in the rival supply chain to cease sharing information for bertrand retail competition we show that information sharing benefits a supply chain when 1 the production diseconomy is large and 2 either competition is less intense or information is more accurate under bertrand competition a manufacturer may be worse off by receiving information which is never the case under cournot competition information sharing in one supply chain triggers a competitive reaction from the other supply chain and this reaction is damaging to the first supply chain under cournot competition but may be beneficial under bertrand competition this paper was accepted by martin lariviere operations management

delegating pricing decisions an outstanding problem in marketing is why some firms in a competitive market delegate pricing decisions to agents and other firms do not this paper analyzes the impact of competition on the delegation decision and in turn the impact of delegation on prices and incentives the theory builds on the simplest framework of competition in two dimensions prices and sales agents effort specifically we are interested in answering the following questions 1 does competition affect the price delegation decision and if yes why 2 how do prices vary under price delegation and no price delegation scenarios 3 do the incentives to the sales representatives vary under the delegation and no delegation scenarios to address these issues we build a game theoretic model that consists of two firms selling through their sales representatives these representatives are company employees sales are a function of prices and selling efforts the risk neutral firms decide whether or not to delegate the pricing decision to risk averse sales representatives the wages to the sales representatives consist of salary plus a commission on gross margins the commission on gross margins can be adjusted either through communicated marginal cost of production which we call virtual marginal cost or directly the firm and the sales representative are assumed to have the same information about the market that is there is no information asymmetry with competition in two dimensions the strategic nature of decision variableprice depends on the relative intensity of competition with unobservable contracts and risk averse sales representatives firms delegate the pricing decision when price competition is intense part of the uncertainty in demand is absorbed by the firm by keeping virtual marginal cost greater than the marginal cost of production the competing firm infers this through the risk aversion of the sales representatives under price delegation the sales representatives wages are higher and they set a price that is higher than what the firms would have set themselves this leads to softening of price competition that is to the advantage of both firms when the effort competition is dominant however the firms prefer to make the pricing decision themselves because this reduces the intensity of effort competition among agents a single instrument commission structure in which the firms adjust the virtual marginal cost is compared to a two instrument commission structure in which the firms can adjust the commission rate as well the virtual marginal cost under no price delegation the two incentive schemes are the same however under price delegation the risk premium with the two instrument scheme is lower however the prices and efforts are higher with the single instrument scheme when price competition is intense the increase in risk premium with the single instrument scheme is more than compensated for by the increase in profits this is the benefit of softening price competition through higher prices

price versus quantity monitoring in an adverse selection context this article explores the relative usefulness of price information over quantity information the main finding is that price monitoring can induce a sales level that is greater than the full information sales level this imposes additional selling costs on the agent and reduces that agent s rents the analysis identifies sufficient conditions for the principal to prefer price monitoring over quantity monitoring business format franchises exhibit many of the features of the setting analyzed here and the article s findings have implications for designing information systems in that sector of the economy

contestable markets an uprising in the theory of industry structure presents a transcript of the presidential address delivered at the 94th meeting of the american economic association on december 29 1981 discussion of developments in the theory of industry structure welfare attributes of contestable markets behavior characteristics of oligopoly equilibrium intertemporal vulnerability to inefficient entry ebsco

inventories and the volatility of production a stylized fact associated with inventory behavior is that the variance of production exceeds the variance of sales this paper presents a model of production decisions with demand uncertainty that incorporates no nnegativity constraints on inventories even with no productivity shocks optimal behavior by the firm is consistent with this stylized fact either if demand exhibits positive serial correlation or if the firm can backlog excess demand the reason is that a demand shock affects both the actual inventory level given unchanged production and the desired level production must replenish the stock and adjust to the new desired level copyright 1987 by american economic association

an industry equilibrium analysis of downstream vertical integration this paper investigates the effect of product substitutability on nash equilibrium distribution structures in a duopoly where each manufacturer distributes its goods through a single exclusive retailer which may be either a franchised outlet or a factory store static linear demand and cost functions are assumed and a number of rules about players expectations of competitors behavior are examined it is found that for most specifications product substitutability does influence the equilibrium distribution structure for low degrees of substitutability each manufacturer will distribute its product through a company store for more highly competitive goods manufacturers will be more likely to use a decentralized distribution system this article was originally published in marketing science volume 2 issue 2 pages 161 191 in 1983

an empirically simulated investigation of the impact of demand forecasting on the bullwhip effect evidence from u s auto industry this study empirically examines the impacts of three major aspects of demand forecasting on the magnitude of the bullwhip effect three research questions are addressed to investigate the association between 1 forecast accuracy 2 aggregate forecasting and 3 responsive forecasting and the bullwhip effect using forecasted demand generated from popular time series forecasting models and real life demand data the study investigates the relationship between the forecasted results and the consequential bullwhip effect the findings show that the forecasting methods used lead to the variation of the bullwhip effect moreover the lead time reduction and the stable demand forecast are beneficial to reduce the bullwhip effect however our empirical results differ from previous findings in two ways i improving forecast accuracy does not necessarily reduce the bullwhip effect and ii aggregate forecasting does not always reduce the bullwhip effect

the strategic choice of managerial incentives do firms with separate owners and managers maximize profits we address this question for an oligopoly where managers compete in quantities or prices as in the cournot or bertrand models and owners choose their managers incentives we find that there is a strategic aspect in the problem of selecting incentives and that profit maximizing behavior does not result in particular in the oligopoly we study the behavior of firms competing in quantity price more closely resembles perfectly competitive collusive behavior than cournot bertrand behavior

managing supply chain demand variability with scheduled ordering policies this paper studies supply chain demand variability in a model with one supplier and n retailers that face stochastic demand retailers implement scheduled ordering policies orders occur at fixed intervals and are equal to some multiple of a fixed batch size a method is presented that exactly evaluates costs previous research demonstrates that the supplier s demand variance declines as the retailers order intervals are balanced i e the same number of retailers order each period this research shows that the supplier s demand variance will generally decline as the retailers order interval is lengthened or as their batch size is increased lower supplier demand variance can certainly lead to lower inventory at the supplier this paper finds that reducing supplier demand variance with scheduled ordering policies can also lower total supply chain costs

price delegation and salesforce contract design with asymmetric risk aversion coefficient of sales agents abstract an important issue that has attracted the interest of academics and practitioners in both marketing and operations is should pricing decisions be made by the firm or delegated to the salesforce this problem has been addressed in the research literature based on the assumption that the exact risk aversion coefficients of the sales agents are known to the firm which may not be true in most applications in this paper we study this problem but assuming that the risk aversion coefficients of agents are private information of the sales agents for both centralized pricing and delegated pricing settings the optimal compensation and pricing contracts are designed and the sensitivity analyses are conducted an interesting finding is that the risk aversion and effort valuation have substitutable impacts on the pricing policy preference of the firm and the agents either strong risk aversion or high effort valuation can drive the firm and the agents to favor centralized pricing over delegated pricing

testing the accuracy of dea estimates under endogeneity through a monte carlo simulation endogeneity and the distortions on the estimation of economic models that it causes is a usual problem in the econometrics literature although non parametric methods like data envelopment analysis dea are among the most used techniques for measuring technical efficiency the effects of such problem on efficiency estimates have received little attention the aim of this paper is to alert dea practitioners about the accuracy of their estimates under the presence of endogeneity for this first we illustrate the endogeneity problem and its causes in production processes and its implications for the efficiency measurement from a conceptual perspective second using synthetic data generated in a monte carlo experiment we evaluate how different levels of positive and negative endogeneity can impair dea estimations we conclude that although dea is robust to negative endogeneity a high positive endogeneity level i e the existence of a high positive correlation between one input and the true efficiency level might bias severely dea estimates

impacts of forecast inventory policy and lead time on supply chain inventory a numerical study abstract this paper first proposes the use of metaheuristic to combine with exponential smoothing methods in forecasting future demands and in determining the optimal inventory policy values for each node in a supply chain network based on historical demand or order streams without the need of any prior knowledge about the demand distribution or distribution fitting the effects of five demand forecasting methods two inventory policies and three lead times on the total inventory cost of a 3 echelon serial supply chain system are then investigated the effect of sharing the demand information for planning the inventories is also compared with that of no sharing for testing 15 quarterly and 15 monthly time series were taken from the m3 competition and are considered as the multi item demand streams to be fulfilled in the supply chain the results indicate that 1 the damped pegel forecasting method is the best in terms of prediction errors because it outperforms others in three of five measures followed by the simple exponential smoothing that wins one of the remaining two and ties the damped pegel in one 2 the supply chain inventory cost increases with increasing lead time and echelon level of the supply chain when the s s policy is used but not the r q policy 3 the r q inventory policy generally incurs lower supply chain inventory cost than the s s policy 4 sharing demand information reduces inventory cost and the reduction is higher for s s than for r q 5 the best demand forecasting method for minimizing inventory cost varies with the inventory policy used and lead time and 6 the correlation between forecasting errors and inventory costs is either negligible or minimal

measuring the efficiency of health systems of oecd countries by data envelopment analysis abstractthis study aims to assess the efficiency of health sectors of 34 oecd countries by employing input oriented data envelopment analysis dea method both under constant and variable returns to scale assumptions in the analysis the number of doctors number of patient beds and health expenditure per capita were used as input variables and life expectancy at birth and infant mortality rate were used as outputs at the first stage dea analysis was performed for 34 countries and at the second stage outlier 8 countries were eliminated to form a more homogeneous group and to achieve more accurate results 11 of the 26 countries were found to have efficient health systems and there is room for efficiency improvements in health sector in the remaining 15 countries

industrial production volatility and the supply chain abstract the issue of production volatility is important to firms interested in managing their supply chain this paper empirically estimates the volatility of industrial production using the garch and egarch time series models three questions are addressed can volatility be predicted is the effect of unexpected changes in production on volatility asymmetric and how persistent is volatility following a production disturbance the results indicate that production volatility is time varying and can be predicted in the majority of cases examined and that overestimates of production lead to greater increases in volatility than do underestimates

an economic theory of vertical restraints vertical restraints imposed by manufacturers on the prices locations and sales of retail firms represent a puzzling departure from the simple price mediated exchange of conventional markets in this article we analyze the theoretical basis for these restraints in a setting where retailers inform consumers and are imperfectly competitive and where a manufacturer has some monopoly power we identify three potential externalities affecting retailers decisions these externalities lead to the failure of simple uniform price contracts to coordinate the incentives of retailers with the objective of maximizing combined manufacturer and retailer profits we identify the packages of vertical restraints that are minimally sufficient under various conditions to neutralize the externalities and to achieve the joint profit maximum

the measurement of productive efficiency a reconsideration the purpose of this paper is to generalize the farrell indexes of productive efficiency to nonhomothetic production technologies and at the same time maintain the cost interpretation of the farrell measures since the generalized indexes rely heavily on recent developments in the estimation of frontier cost and production functions several frontier models are reviewed in addition to generalized indexes of technical allocative and overall productive efficiency a variety of single factor efficiency measures are discussed the applicability of the proposed efficiency measures is illustrated with a numerical example of electric power generation

the effectiveness of field price discretion empirical evidence from auto lending in many markets it is common for headquarters to create a price list but grant local salespeople discretion to negotiate prices for individual transactions how much if any pricing discretion headquarters should grant is a topic of debate within many firms we investigate this issue using a unique data set from an indirect lender with local pricing discretion we estimate that the local sales force adjusted prices in a way that improved profits by approximately 11 on average a counterfactual analysis shows that using a centralized data driven pricing optimization system could improve profits even further up to 20 over those actually realized this suggests that centralized pricing if appropriately optimized can be more effective than field price discretion we discuss the implications of these findings for auto lending and other industries with similar pricing processes this paper was accepted by serguei netessine operations management

small is not that beautiful after all measuring the scale efficiency of tunisian high schools using a dea bootstrap method allocation of resources to schools in a centrally managed state system as the tunisian one should depend on the performance of the individual institutions the optimal size is of crucial importance in this context and we need accurate measurement for sound policies this article discusses and implements a nonparametric statistical test procedure for organization scale efficiency this procedure allows us to test whether the observed scale efficiency is optimal or not using a smooth bootstrap methodology for efficiency measures estimated using data envelopment analysis dea methods because school principals do not control for the size of their institution i e the capital available at decision time the scale efficiency measures are defined so as to include quasi fixed inputs the results show that scale efficiency measures are subject to sampling variation we also found that the schools that are scale efficient are usually mid sized and large schools when size is measured by the number of students

exploring the existence of kuznets curve in countries environmental efficiency using dea window analysis abstract this paper using data envelopment dea window analysis and generalized method of moments gmm estimators examines the existence of a kuznets type relationship between countries environmental efficiency and national income specifically it measures the environmental efficiency of 17 oecd countries by constructing environmental efficiency ratios for the time period 1980 2002 the analysis with the application of dynamic panel data reveals that there isn t a kuznets type relationship between environmental efficiency and income allowing for dynamic effects we find that the adjustment to the target ratio is instantaneous we also find that increased economic activity does not always ensure environmental protection and thus the path of growth is important in addition to the growth itself

impact of input substitution and output transformation on data envelopment analysis decisions abstractdata envelopment analysis dea can aid managerial decision making because it offers an opportunity to measure organizational performance in a holistic manner aggregating data from partial indicators into a single comprehensive measure however there are some methodological hazards associated with the use of dea that are especially relevant to managerial decisions but which have been largely ignored in the literature herein we identify and show the impact of a ubiquitous methodological hazard in dea modelling the economic assumptions regarding input substitutions and output transformations

insurance companies in mozambique a two stage dea and neural networks on efficiency and capacity slacks this article analyses the efficiency of mozambique insurance companies using a dea model two dea models are used and a bootstrap approach adopted furthermore the efficiency scores are predicted based on neural networks the results reveal that mozambique insurance companies output increasing potentials are severely constrained particularly in terms of the ceded reinsurance increasing potentials policy implications are derived

competition and cooperation in marketing channel choice theory and application this paper discusses the problem of choosing a vertical marketing channel in a product differentiated duopolistic market firms choose product price and the form of the marketing channel to maximize profits it is shown that integration of the marketing function results in greater price competition and lower prices than does the use of independent marketing middlemen the profitability of reducing price competition by using such middlemen is investigated two hypotheses that integration is negatively associated with the products substitutability and that symmetric channel structures are stable are tested in a preliminary way and supported with survey data from the international semiconductor industry

economic of scale in school operation evidence from canada 1983 economic of scale in school operation evidence from canada applied economics vol 15 no 3 pp 323 340

forecasting and inventory performance in a two stage supply chain with arima 0 1 1 demand theory and empirical analysis the arima 0 1 1 demand model has been analysed extensively by researchers and used widely by forecasting practitioners due to its attractive theoretical properties and empirical evidence in its support however no empirical investigations have been conducted in the academic literature to analyse demand forecasting and inventory performance under such a demand model in this paper we consider a supply chain formed by a manufacturer and a retailer facing an arima 0 1 1 demand process the relationship between the forecasting accuracy and inventory performance is analysed along with an investigation on the potential benefits of forecast information sharing between the retailer and the manufacturer results are obtained analytically but also empirically by means of experimentation with the sales data related to 329 stock keeping units skus from a major european superstore our analysis contributes towards the development of the current state of knowledge in the areas of inventory forecasting and forecast information sharing and offers insights that should be valuable from the practitioner perspective