a soft pillow for hard times economic insecurity food intake and body weight in russia this study investigates causal effects of economic insecurity on subjective anxiety food intake and weight outcomes a review of psychological and nutrition studies highlights the complexity of processes at work on each stage of this causal chain econometric analyses trace the effects along the hypothesized pathway using detailed household panel data from the russia longitudinal monitoring survey from 1994 to 2005 economic insecurity measures serve as key explanatory variables in regressions and are instrumented by exogenous regional indicators results support a causal chain from economic insecurity to weight outcomes for some population subgroups in contrast to the leading hypothesis that economic insecurity increases body weight i find strong evidence of a decreasing effect among women results suggest further that consumption of foods rich in sugar responds strongly to higher levels of economic insecurity heterogeneous impacts of economic insecurity on body weight call for individual level interventions rather than large scale action

seasonality and the production smoothing model abstract the debate over whether firms smooth production relative to demand continues in this paper we find that results obtained in blinder quarterly journal of economics 101 3 1986 431 453 and blinder and maccini journal of economic surveys 5 4 1991 293 328 indicating that firms do not smooth production are greatly influenced by the seasonal adjustment of the census data for us manufacturing using seasonally adjusted data we find significant evidence of production smoothing in 10 of 14 manufacturing industries for the years 1982 1997 further the prevalence of production smoothing has increased over time which we attribute either to fundamental changes in the collection of the data or to the advent of improved methods of inventory management

reducing the bullwhip effect looking through the appropriate lens demand amplification now frequently referred to as bullwhip is potentially a very costly phenomenon it can lead to stock outs large and expensive capacity utilisation swings lower quality products and considerable production transport on costs as deliveries are ramped up and down at the whim of the supply chain however the detection of bullwhip depends on which lens is used this in turn depends on the background and requirements of various players within the value stream to gain insight into this scenario we exploit a relatively simple replenishment model because new and novel analytic solutions have been derived for all important performance metrics comparison of the competing bullwhip measures is thereby greatly streamlined in the complex real world the likelihood is that supply chains will generate even greater inconsistency between alternative variance shock and filter lens viewpoints

structural instability and the production smoothing model of inventories the production smoothing model of inventories implies that inventories labor inputs sales and factor input prices are cointegrated if sales and factor prices are i 1 with one cointegrating vector for each state variable held these propositions are tested in six nondurable goods industries all industries provide evidence of cointegration fewer quasi fixed factors are found than previous research often assumed estimates of cointegrating vectors provide implausible parameter estimates rank stability tests with fixed or seqentially chosen breakpoints indicate that the cointegrating matrix has unstable rank parameter estimates of cointegrating vectors do not provide much support for the production smoothing model of inventories

strategy not tactics drives aggregate planning the aggregate planning model supposedly shows how manufacturers cope with seasonally biased sales unfortunately industry has failed to embrace any of the sophisticated algorithms that were developed to solve the corresponding resources allocation problem this paper reveals why such methods have proven so unattractive aggregate planning is a chimera in practice planners construct the master production schedule directly in line with a preferred production strategy a chase plan is the most popular choice when this option proves infeasible management plumps for another predetermined strategy the resultant stockpiling brings certain financial risks however companies take various measures to reduce their exposure

measuring noise in inventory models this paper has two purposes one is to assess different models of inventory behavior in terms of their ability to approximate the realized data we do this initially for the pure production smoothing model and then for a sequence of generalizations our analysis both performs specification tests as well as measures the deviations of the data from each null model through use of a noise ratio statistic a second purpose is to explore whether observed cost shocks in particular raw materials prices help explain inventory movements we find that the production smoothing model of inventories augmented by buffer stock motives stockout avoidance motives and observed cost shocks well approximates monthly data

the rising instability of u s earnings the inequality of earnings and of family incomes in the united states has increased since the late 1970s autor katz and kearney 2008 this increase in cross sectional inequality has largely been interpreted as a growing disparity in permanent incomes between those with high incomes and those with low incomes however growing inequality could equally well be a result of growing income instability if workers experience increasingly large fluctuations in earnings from year to year this would also increase the measured inequality of earnings from year to year for example if everyone maintained the same level of permanent income but some experienced a 500 increase in their income in the first year and then a reversal to 500 below their permanent incomes in the following year while an equal number experienced the opposite a drop in income followed by an offsetting rise measured inequality would rise though nothing would have happened to the dispersion of permanent incomes while this example is an extreme one it points to the fact that the large rise in earnings inequality between the 1970s and the 1990s could reflect either a rise in disparity of permanent incomes a rise in earnings instability or some portion of both without longitudinal data it is impossible to distinguish between these two very different explanations for increased cross sectional measures of inequality in this paper we provide longitudinal measures that separate changes in income inequality into changes that permanently change income to new levels and those that only reflect transitory change we refer to the latter as changes in income instability and discuss how the instability of individual earnings and family income in the united states has evolved over the last quarter century

the analysis of bullwhip effect in a hmms type supply chain the aim of the paper is to investigate the well known bullwhip effect of supply chains control theoretic analysis of bullwhip effect is extensively analyzed in the literature with the laplace transform this paper tries to examine the effect for an extended holt modigliani muth simon model a two stage supply chain supplier manufacturer is studied with quadratic costs functional it is assumed that both firms minimize the relevant costs the order of the manufacturer is delayed with a known constant two cases are examined supplier and manufacturer minimize the relevant costs decentralized and a centralized decision rule the question is answered how to decrease the bullwhip effect

demand and innovation schmookler re examined schmookler s demand pull hypothesis implying that innovation is a function of market demand has been widely accepted re reading schmookler s invention and economic growth we discover a statistical inadequacy re estimating his cross section results in a different way we find somewhat lower coefficients moreover the direction of causality appears to be far from obvious an independent cross sectional test of the schmookler hypothesis in the netherlands based on r d instead of patent data shows similar results the relationship between indicators of demand and innovation turns out to be generally weaker but in most cases still significant and the results suggest that there is a simultaneous relationship between demand and innovation the latter may be explained by the concept of the innovation multiplier which has implications for macro economic modelling 1 re reading schmookler schmookler s 13 finding of a strong relationship between investment in capital goods users industries and patent applications by capital goods producing sectors has been generally accepted by economists as evidence that patenting is a function of effective demand demand pull hypothesis quite a number of case studies have followed schmookier s seminal work but there have been

on the impact of order volatility in the european automotive sector order volatility is an unfortunate fact of life facing most suppliers of both products and services in this paper we are concerned with establishing the magnitude of the problem faced by the european automotive sector the evidence has been acquired via the site based quick scan audit methodology qsam production scheduler strategy is thereby classified according to a new five set schema as observed via individual value stream volatilities system variables have then been codified and correlated with customer order volatility powerful statistically significant relationships emerge from this evidence this generally but not wholly supports intrinsic views on what constitutes good practice a specific interface between supplier and oem shows the existence of a positive loop that acts as a vicious circle to create unnecessary volatility in material flow

innovations and r d in northern ireland manufacturing a schumpeterian approach harris r and trainor m 1995 innovations and r d in northern ireland manufacturing a schumpeterian approach reg studies 29 593 604 given the importance of r d and innovative outputs and the change in regional policy in the 1980s to encourage an enterprise culture based inter alia on a high rate of innovations this paper attempts to explain the determinants of inventive activities in one of the most disadvantaged regions of the united kingdom a model incorporating the impact of market structure is estimated and it is found that in northern ireland higher r d spending leads to a higher probability of innovating while r d itself is positively affected by higher post innovation price cost margins thus r d spending and innovation outputs are beneficial to profitability and thus presumably the long term growth of firms however while market structure is important the direct effects of monopoly power are if anything negative thus the results presented by geroski 1990 are support

reducing schedule instability by identifying and omitting complexity adding information flows at the supplier customer interface within the supply chain context schedule instability is caused by revisions to forecast demand from customers problems with scheduled deliveries from suppliers and disruptions to internal production supply chain partners attempt to address schedule instability by regular exchanges of information flows on current demand and delivery forecasts however if these updating information flows are unreliable and likely to be over ridden by subsequent updated schedules then the problem of schedule instability at the supplier customer interface is not being solved the research hypothesis investigated in this paper is whether supply chain partners may reduce schedule instability at the supplier customer interface by identifying and omitting complexity adding information flows to this aim previous work by the authors on an information theoretic methodology for measuring complexity is extended and applied in this paper for identifying complexity adding information flows the application consists of comparing the complexity index of actual exchanged information flows with the complexity index of scenarios that omit one or more of these information flows using empirical results it is shown that supply chain partners may reduce schedule instability at the supplier customer interface by identifying and omitting complexity adding information flows the applied methodology is independent of the information systems used by the supplier and customer and it provides an objective integrative measure of schedule instability at the supplier customer interface two case studies are presented one in the commodity production environment of fast moving consumer goods and another in the customised production environment of electronic products sector by applying the measurement and analysis methodology relevant schedule instability related insights about the specific case studies are obtained in light of the findings from these case studies areas for further research and validation of the conditions in which the proposed research hypothesis holds are also proposed

seasonality aggregation and the testing of the production smoothing hypothesis one of the leading hypotheses concerning the dynamics of production over time is the production smoothing hypothesis given a planning horizon which spans a number of production periods the firm need not produce in each period an amount equal to expected sales rather resorting to inventory accumulation and liquidation the firm may follow a production plan temporally smoother than the path of demand if firms faced with convex cost functions chose to smooth the rate of output in order to minimize costs one would expect to observe that the rate of output would vary less than the rate of sales with variations in inventory stocks absorbing some of the fluctuations in sales recently work on the testing of the production smoothing hypothesis has cast doubt on its empirical validity the evidence presented by alan blinder seems to indicate that the variance of production exceeds that of sales in seven out of eight two digit retail industries 1981 and in eighteen out of twenty two digit manufacturing industries 1983 and 1986 the purpose of this paper then is to examine the validity of such tests when seasonally adjusted aggregated data are used the evidence presented show that the relative size of the variances of the seasonally adjusted production and sales does not provide valid tests of the production smoothing hypothesis in addition aggregating over firms where the seasonal patterns differ may also distort tests of production smoothing blinder realized that the use of seasonally adjusted data may not provide an adequate test of the hypothesis stating had they been available i would have preferred to use data that were not seasonally adjusted since the production smoothing model presumably applies to seasonal fluctuations in sales however such data are not available 1983 fn 19 in this paper i focus on the cement industry because the unadjusted disaggregated data are available for the direct testing of the conjecture that aggregate seasonally adjusted data mask production smoothing phenomenon aggregate monthly data on five other industries will also be examined

public procurement and innovation resurrecting the demand side abstract demand is a major potential source of innovation yet the critical role of demand as a key driver of innovation has still to be recognised in government policy this article discusses public procurement as one of the key elements of a demand oriented innovation policy the paper starts by signaling the new significance of public procurement for innovation policy strategies at the eu level and in a range of european countries it then defines the concept of public procurement and embeds this concept within a taxonomy of innovation policies the rationales and justifications of public procurement policies to spur innovation are discussed followed by a consideration of the challenges and potential pitfalls as well as appropriate institutional arrangements and strategies including some recent empirical examples of good practice it concludes by confronting the public procurement approach with two of the most common objections to it and by considering future prospects

dynamic and stochastic behavior of coefficient of demand uncertainty incorporated with eoq variables an application in finished goods inventory from general motors dealerships abstract the objective of this paper is to investigate finished goods inventory in the u s automobile industry using an econometric method known as the variable mean response vmr estimation the research uses the classical economic order quantity eoq model as a starting point different from the usual form of the model here we relax certain assumptions inherent to the eoq and treat demand as uncertain rather than deterministic in this research eight models are developed and applied empirically the results of the proposed models and methodology provide inventory decision makers with different managerial implications and strategic improvements overall the empirical results demonstrate many avenues for considering new inventory policies

tests of production smoothing in selected japanese industries abstract using monthly physical quantity data on production sales and inventories for 29 selected japanese industries it is found that the usual variance decompositions are generally consistent with the production smoothing model at both seasonal and nonseasonal frequencies however the estimated seasonal coefficients in production and sales are highly correlated which should not be the case if firms smooth production in the face of anticipated seasonal movements in sales a further test of the model which implies production should follow a random walk with drift provides mixed results but particularly negative results at the seasonal frequencies

reducing the cost of demand uncertainty through accurate response to early sales traditionally fashion products have incurred high losses due to stockouts and inventory obsolence because long lead times coupled with a concentrated selling season force all or at least most production to be committed before demand information is available under a quick response system lead times are shortened sufficiently to allow a greater portion of production to be scheduled in response to initial demand we model and analyze the decisions required under quick response and give a method for estimating the demand probability distributions needed in our model we applied these procedures with a major fashion skiwear firm and found that cost relative to the current informal response system was reduced by enough to increase profits by 60 relative to the cost that would have been incurred if no response were used optimized response reduces cost by enough to roughly quadruple profits

the impact of demand and price expectations on the behavior of prices the effects of demand and price expectations on price behavior are analyzed using data from the manufacturing sector and a model formulated to pinpoint the demand oriented factors affecting prices and to incorporate price expectations as a direct influence on price behavior the expected normal demand is seen to have a strong and systemic influence on price behavior the expected normal level of new orders is found to be an adequate measure with sector data in general although some industries require more specification the effects of inventories and unfilled orders on prices are sporadic and across sectors and industries demand oriented forces are concluded to perform as well statistically as cost push determinants expectations concerning the current normal industry price level have a significant and consistent impact on price behavior this supports the idea that firms setting prices take into account their estimates of competitor s prices future price expectations appear to have little effect on current price information 15 references

measuring and avoiding the bullwhip effect a control theoretic approach an important contributory factor to the bullwhip effect i e the variance amplification of order quantities observed in supply chains is the replenishment rule used by supply chain members first the bullwhip effect induced by the use of different forecasting methods in order up to replenishment policies is analysed variance amplification is quantified and we prove that the bullwhip effect is guaranteed in the order up to model irrespective of the forecasting method used thus when production is inflexible and significant costs are incurred by frequently switching production quantities up and down order up to policies may no longer be desirable or even achievable in the second part of the paper a general decision rule is introduced that avoids variance amplification and succeeds in generating smooth ordering patterns even when demand has to be forecasted the methodology is based on control systems engineering and allows important insights to be gained about the dynamic behaviour of replenishment rules

the new economy in europe 1992 2001 despite the fast catching up in ict diffusion experienced by most eu countries in the last few years information technologies have so far delivered little productivity gains in europe in the second half of the past decade growth contributions from ict capital rose in six eu countries only the uk denmark finland sweden ireland and greece quite unlike the united states this has not generally been associated to higher labour or total factor productivity growth rates the only exceptions being ireland and greece particularly worrisome the large countries in continental europe germany france italy and spain showed stagnating or mildly declining growth contributions from ict capital together with definite declines in tfp growth compared to the first half of the 1990s it looks like that the celebrated solow paradox on the lack of correlation between ict investment and productivity growth has fled the us to migrate to europe

some empirical evidence on the production level and production cost smoothing models of inventory investment the production smoothing model of inventories has long been the basic paradigm within which empirical research on inventories has been conducted the basic hypothesis embedded in this model is that inventories of finished goods serve primarily to smooth production levels in the face of fluctuating demand and convex cost functions however once we allow for shocks to technology and the costs of producing output firms will also use inventories to shift production from periods in which production costs are relatively high to periods in which production costs are relatively low in this sense inventories can serve to smooth production costs rather production levels in this paper we examine the empirical plausibility of the production level and production cost smoothing models of inventories our basic strategy is to derive and contrast a set of unconditional moment restrictions implied by these models in a way that minimizes the role of auxiliary assumptions regarding market structure and industry demand we find overwhelming evidence against the production level smoothing model and very little evidence against the production cost smoothing mode1 we conclude that the variance of production exceeds the variance of sales in most manufacturing industries because the production cost smoothing role of inventories is quantitatively more important than the production level smoothing role of inventories this abstract was borrowed from another version of this item

an inventory system with two supply modes and capacity constraints abstract this paper analyses a periodic review inventory system with a main and an emergency supply mode where policies of the base stock type are used at both supply channels contrary to previously published models the capacity of the emergency channel is taken into account we examine two alternative ordering policies for that channel an early ordering policy that almost eliminates early stockouts in a replenishment cycle and a late ordering policy that delays the emergency order decision until more demand information has been accumulated approximate cost models are developed and properties of their optimal solutions are derived simulation results indicate that these solutions are near optimal conclusions are drawn about the relative effectiveness of the two emergency ordering policies

the production and inventory behavior of the american automobile industry understanding inventory movements is central to an understanding of business cycles this paper presents an empirical study of the behavior of inventories in the automobile industry it finds that inventory behavior is well explained by the assumption of intertemporal optimization with rational expectations the underlying cost structure appears to have substantial costs of changing production as well as substantial costs of being away from target inventory thelatter being a function of current sales given this cost structure whether inventory behavior is stabilizing or destabilizing depends on the characteristics of the demand process in the automobile industry inventory behavior is destabilizing the variance of production is larger than the variance of sales

analyzing the effect of the inventory policy on order and inventory variability with linear control theory in this paper we apply linear control theory to study the effect of various inventory policies on order and inventory variability which are key drivers of supply chain performance in particular we study a two echelon supply chain with a stationary demand pattern under the influence of three inventory policies an inventory on hand policy that bases orders on the visible inventory at an installation an installation stock policy that bases orders on the inventory position on hand plus on order inventory at an installation and an echelon stock policy that bases orders on the inventory position at that installation and all downstream installations we prove analytically that the inventory on hand policy is unstable in practical settings confirming analytically what has been observed in experimental settings and in practice we also prove that the installation stock and echelon stock policies are stable and analyze their effect on order and inventory fluctuation specifically we show the general superiority of the echelon stock in our setting and demonstrate analytically the effect of forecasting parameters on order and inventory fluctuations confirming the results in other research

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

production smoothing in the japanese vehicle industry abstract physical data from the japanese vehicle industry covering monthly observations from 1985 1 to 1994 12 are investigated across nine goods ranging from bicycles to large buses smaller variance of production is found relative to sales across all goods for unadjusted data and in 17 out of 18 cases for seasonally adjusted data such evidence in favor of the production smoothing model psm is confirmed by full information maximum likelihood employed jointly on inventories and sales equations the estimates suggest the industry operates in the range of increasing marginal costs in six out of nine goods positive costs of being away from targeted inventory are also present in six out of these nine goods which make the psm a good description of this industry

production planning horizon production smoothing and convexity of the cost functions abstract one of the productions planning models economists have used for the past four decades is the production smoothing model the model s conclusion is simple if cost functions are convex under certain conditions firm s production plans may show smaller variability than the firm s sales this is a result of the first order condition for cost minimization over the production planning horizon in a 1986 paper blinder raised doubts regarding the ability of the production smoothing model to explain the observed data some researchers e g ramey journal of political economy 99 2 1991 306 explained the inconsistency between the theory and the data by providing evidence that the cost functions are non convex in this paper i point out that the shapes of the cost functions depend on the length of the time horizon under consideration it is possible that while short run cost functions are upward sloping long run cost functions may be downward sloping because the planning horizon for firms facing seasonal demand has been shown to be one seasonal cycle the short run cost function whose shape determines the firm s production plan over the horizon need to be estimated using single planning horizon data i e a single seasonal cycle researchers who use long time series data are in effect estimating long run cost functions the slopes of which may be non positive i show further that convexity of the production cost function is neither necessary nor sufficient condition for production smoothing to be an optimal plan

the bullwhip effect progress trends and directions the bullwhip effect refers to the phenomenon where order variability increases as the orders move upstream in the supply chain this paper provides a review of the bullwhip literature which adopts empirical experimental and analytical methodologies early econometric evidence of bullwhip is highlighted findings from empirical and experimental research are compared with analytical and simulation results assumptions and approximations for modelling the bullwhip effect in terms of demand forecast delay replenishment policy and coordination strategy are considered we identify recent research trends and future research directions concerned with supply chain structure product type price competition and sustainability

nonconvex costs and the behavior of inventories this paper explores one possible explanation for the apparent excess volatility of production relative to sales nonconvexities in the technology facing firms it is shown that if firms operate in a region of declining marginal costs then small shifts in demand can cause production to jump substantially estimates for six production to stock industries as well as the automobile industry suggest that all these industries behave as if they were operating in the region of nonconvex costs the results have important implications not only for inventory investment but also for the cyclical behavior of productivity and prices

modelling the innovation value chain innovation events the introduction of new products or processes represent the end of a process of knowledge sourcing and transformation they also represent the beginning of a process of exploitation which may result in an improvement in the performance of the innovating business this recursive process of knowledge sourcing transformation and exploitation comprises the innovation value chain modelling the innovation value chain for a large group of manufacturing firms in ireland and northern ireland highlights the drivers of innovation productivity and firm growth in terms of knowledge sourcing we find strong complementarity between horizontal forwards backwards public and internal knowledge sourcing activities each of these forms of knowledge sourcing also makes a positive contribution to innovation in both products and processes although public knowledge sources have only an indirect effect on innovation outputs in the exploitation phase innovation in both products and processes contribute positively tocompany growth with product innovation having a short term disruption effect on labour productivity modelling the complete innovation value chain highlights the structure and complexity of the process of translating knowledge into business value and emphasises the role of skills capital investment and firms other resources in the value creation process

capacity restrictions and supply chain performance modelling and analysing load dependent lead times abstract several studies have reported that capacitated supply chains may benefit from an improved dynamic performance as compared to unconstrained ones this occurs as a consequence of the capacity limit acting as a production smoothing filter in this research the relationship between capacity restrictions and the operational performance of supply chains is investigated from a novel perspective i e we assume that the influence of capacity constraints on lead times depends on the supply chain s responsiveness under these circumstances the experiments show that there is a negative effect of capacity constraints on supply chain performance both in terms of process efficiency internal and customer satisfaction external nonetheless the magnitude of this impact greatly depends on the responsiveness of the firm market conditions and adopted policies for inventory management more specifically the combination of tight capacity restrictions and low responsiveness significantly contributes to decrease supply chain performance which may be very damaging for the dynamic behavior of the system in this sense efficient capacity planning proves to be essential to prevent the supply chain from entering into a vicious circle

transfer function analysis of forecasting induced bullwhip in supply chains the present paper analyses the bullwhip problem generated by exponential smoothing algorithms in both stand alone passing on orders mode and within inventory controlled feedback systems results are predicted from transfer function analysis and then confirmed by simulation via the bullwhip explorer supply chain software a novel feature of the paper is the introduction of the matched filter concept into the exponential smoothing algorithm this adjusts the value of the smoothing constant depending on whether the constant linear or quadratic forecasting model is used it is shown that matching the filter via noise bandwidth equalises the output variance when the demand is a random signal hence some of the unwanted effects of using the linear and quadratic forecasting models are attenuated however there is little benefit obtained by using sophisticated forecasting methods within inventory controlled feedback systems as their tracking ability is reduced

destocking the bullwhip effect and the credit crisis empirical modeling of supply chain dynamics in this paper we analyze the strong sales dip observed in the manufacturing industry at the end of 2008 following the bankruptcy of lehman brothers and the subsequent collapse of the financial world we suggest that firms desire to retain liquidity during these times prompted a reaction characterized by the reduction of working capital which materialized as a synchronized reduction in target inventory levels across industries we hypothesize that such a reaction effectively acted as an endogenous shock to supply chains ultimately resulting in the bullwhip effect kind of demand dynamics observed to test this proposition we develop a system dynamics model that explicitly takes into account structural operational and behavioral parameters of supply chains aggregated at an echelon level we calibrate the model for use in 4 different business units of a major chemical company in the netherlands all situated 4 5 levels upstream from consumer demands in their respective supply chains we show that the model gives a very good historical fit of the sales developments during the period following the lehman collapse we test the model s robustness to behavioral parameter estimation errors through sensitivity analysis and the de stocking hypothesis against an alternative model finally we observe that the empirical data is aligned with experimental observations regarding human behavioral mechanisms concerning target adjustment times

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

firm characteristics and the cyclicality of r d investments the aim of this study is to combine micro aspects of firm behavior with macro aspects of business development and identify market conditions e g price competition and firm characteristics e g type of r d partners that enable a firm to have a pro cyclical anti cyclical or non systematic r d investment behavior the empirical results confirm to large extent a series of hypotheses as to innovation relevant firm characteristics that underline the three different behavior categories and allow us to make profiles of the three types of r d behavior

is demand pulled innovation equally important in different groups of firms previous empirical literature has tested the demand pull hypothesis and found that innovation may be driven by output using a balanced panel of 216 italian manufacturing firms 1995 2000 and checking for the path dependent nature of r d we find a role of sales in inducing r d however the demand pull effect plays a varying role for different sub samples of firms exporting firms liquidity constrained firms not subsidised firms and those not heading a group seem to be sensitive to sales in deciding r d these results have been obtained using a least squares dummy variable corrected estimator a recent panel data technique suitable for small samples

a pragmatic approach to the design of bullwhip controllers it is well known that forecasting mechanisms can greatly increase bullwhip demand variance amplification of orders as processed by both human and algorithmic decision makers this paper is concerned with the application of the well established apiobpcs decision support system a variant of the order up to rule in such circumstances it has two feedback controls based on the inventory and the orders in pipeline respectively with gains set equal according to the deziel eilon rule there is one feed forward control based on exponential forecasting although this is not a restriction on the application of this system we consider the pragmatic role of apiobpcs in the situation where the echelon decision maker may be handling a wide range of sku s in a non altruistic environment where upmarket information may either be withheld or simply unavailable under such circumstances it has been established via site based studies that the decision makers output the orders reflect a wide range of strategies or maybe ignorance three strategies may be regarded as appropriate i e pass orders along demand smoothing and level scheduling depending on context apiobpcs can be adapted to each of these modus operandi in the first case with the added capability of smoothing the sharp edges with a modicum of inventory variation and in the last case with the advantage of built in trend detection players in non altruistic supply chains must be able to cope with added uncertainties due to lead time variations we show that apiobpcs may be well matched to such situations and is hence copable as well as capable the paper includes recommended parameter settings according to desired decision making policies

production smoothing evidence from physical product data we reconsider the paradox that the variance of production often exceeds the variance of shipments a result that casts doubt on the production smoothing model of inventory behavior most studies of production smoothing have analyzed two digit sic dollar value data from commerce department surveys in contrast this paper examines disaggregated physical product data and finds that production is smoother than shipments in about two thirds of the 38 industry or product groupings considered however doubts about the model persist most notably euler equation estimates of the model s cost parameters are usually imprecise and often do not have the signs postulated by production smoothing models

the extension and exploitation of the inventory and order based production control system archetype from 1982 to 2015 in 1994 through classic control theory john naim and towill developed the automatic pipeline inventory and order based production control system apiobpcs which extended the original iobpcs archetype developed by towill in 1982 well recognised as a base framework for a production planning and control system due to the prevalence of the two original models in the last three decades in the academic and industrial communities this paper aims to systematically review how the iobpcs archetypes have been adopted exploited and adapted to study the dynamics of individual production planning and control systems and whole supply chains using various databases such as scopus web of science google scholar 111 papers we found that the iobpcs archetypes have been studied regarding the a modification of four inherent policies related to forecasting inventory lead time and pipeline to create a family of models b adoption of the iobpcs family to reduce supply chain dynamics and in particular bullwhip c extension of the iobpcs family to represent different supply chain scenarios such as order book based production control and closed loop processes simulation is the most popular method adopted by researchers and the number of works based on discrete time based methods is greater than those utilising continuous time approaches most studies are conceptual with limited practical applications described future research needs to focus on cost flexibility and sustainability in the context of supply chain dynamics and although there are a few existing studies more analytical approaches are required to gain robust insights into the influence of nonlinear elements on supply chain behaviour also empirical exploitation of the existing models is recommended

demand fluctuation and chaotic behaviour by interaction between customers and suppliers this paper presents an investigation on simulation of interaction between customers and suppliers in a three tier supply chain system in the simulation customers respond to the price discount offer made by the supplier and the supplier makes adjusts the price according to stock held the simulation shows that the behaviour of such interaction exhibits deterministic chaos it is found that the attractors of the model move with the environment and the initial states thus the bifurcating points in such a system are unable to provide a guideline in system design to avoid chaos

estimating the linear quadratic inventory model maximum likelihood versus generalized method of moments abstract we compare generalized method of moments gmm and maximum likelihood ml estimators of the parameters of a linear quadratic inventory model using nondurable manufacturing data and monte carlo simulations data based gmm estimates for five normalizations vary widely generally rejecting the model the ml estimate generally supports the model monte carlo experiments reveal that the gmm estimates are often biased apparently due to poor instruments statistically insignificant economically implausible and dynamically unstable the ml estimates are generally unbiased even in misspecified models statistically significant economically plausible and dynamically stable asymptotic standard errors for ml are 3 to 15 times smaller than for gmm

overtime vs regular shift planning decisions in packing shops abstract consideration is given to a planning problem arising at the packaging stage of production in several industries i e the packing shop this termed economic manpower shift planning with overtime emsp o seeks the manpower and overtime to be planned at each available workday shift so that production targets are met within a given time horizon at minimum cost starting with a practical planning dilemma on the use of overtime we explore the optimal planning policy together with the performance of two practical policies an ilp model of emsp o is developed and used for determining the optimal policy since the problem is shown to be np hard optimal policies were found using a commercial ilp optimiser the optimal setting of the practical policies was obtained by existing heuristics the results show that effective use of overtime leads to workforce reductions and improved utilisation in many cases an all or nothing property relates overtime and workforce utilisation at optimum finally it is shown that when indiscriminately used practical planning policies may have serious cost consequences

excess labour and the business cycle a comparative study of japan germany the united kingdom and the united states against the background of firm specific human capital theory this paper investigates empirically the relative propensity of manufacturing industries in japan germany the united kingdom and the united states to hold excess labour over the business cycle both stock and utilization dimensions of the labour input are integrated into the study throughout discussion is linked to earlier research that has analysed the relative international performance of the japanese labour market

on bullwhip in supply chains historical review present practice and expected future impact abstract demand amplification or bullwhip as it is now called is not a new phenomenon since evidence of its existence has been recorded at least as far back as the start of the 20th century and is well known to economists yet industry worldwide still has to cope with bullwhip measured not just in terms of the 2 1 amplification which is frequently quoted but sometimes it is as high as 20 1 from end to end in the supply chain this can be very costly in terms of capacity on costs and stock out costs on the upswing and stockholding and obsolescence costs on the downswing in this paper we have identified 10 published causes of bullwhip all of which are capable of elimination by re engineering the supply chain we offer evidence on the present health of a family of supply chains and pinpoint much good practice this is in anticipation that such excellence will become normative in the near future as the learning experience gathers momentum and provided that human factors are properly addressed

economic stressors and the demand for fattening foods a broad and growing literature suggests that uncertainty with respect to income employment and or the financial resources necessary to buy food may cause people to gain weight the theory inspired by theory and evidence from behavioral ecology posits that economic insecurity triggers a physiological fattening response but the mechanisms by which weight gain occurs e g physical activity caloric intake dietary quality basal metabolism depression are not known this paper reviews and synthesizes evidence supporting a dietary quality mechanism in which economic insecurity triggers a shift in food preferences toward fattening foods interestingly the foods to which individuals appear to be drawn under these circumstances are those which the anthropological evidence suggests would have been eaten in pre industrial societies during periods of seasonal food scarcity this abstract was borrowed from another version of this item

mitigating the bullwhip effect by ordering policies and forecasting methods abstract the bullwhip effect in which order variability increases as one moves up the supply chain has been observed in a range of industries modeled by several authors and various remedies suggested this paper provides a simulation of the effect of improved forecasting methods and finds that holt s and brown s methods substantially mitigate the bullwhip effect across a range of performance metrics the end result is to identify ordering policies that perform particularly well in combination with these forecasting methods and indicate how they can be implemented in practice

bullwhip effect measurement and its implications the bullwhip effect or demand information distortion has been a subject of both theoretical and empirical studies in the operations management literature in this paper we develop a simple set of formulas that describe the traditional bullwhip measure as a combined outcome of several important drivers such as finite capacity batch ordering and seasonality our modeling framework is descriptive in nature as it features certain plausible approximations that are commonly employed in practical inventory systems the results are nonetheless compelling and can be used to explain various conflicting observations in previous empirical studies building on the theoretical framework we discuss the managerial implications of the bullwhip measurement we show that the measurement can be completely noninformative about the underlying supply chain cost performance if it is not linked to the operational details such as decision intervals and leadtimes specifically we show that an aggregated measurement over relatively long time periods can mask the operational level bullwhip in addition we show that masking also exists under product or location aggregation in some illustrative cases

the effect of replenishment policies on the bullwhip effect a transfer function approach an important phenomenon in supply chain management known as the bullwhip effect suggests that demand variability increases as one moves up a supply chain this paper examines the influence of different replenishment policies on the occurrence of the bullwhip effect the paper demonstrates that certain replenishment policies can in themselves be inducers of the bullwhip effect while others inherently lower demand variability the main causes of increase in variability are projections of future demand expectations which result in over exaggerated responses to changes in demand we suggest that through appropriate selection and use of certain replenishment rules the bullwhip effect can be avoided subsequently allowing supply chain management costs to be lowered

innovative activity over the business cycle this paper examines cyclical patterns of innovative activity in the united kingdom over the period 1948 83 innovative activity turns out to have many of the properties of a random walk but does show a tendency to cluster during booms there is clear evidence of a long term secular relation between the level of innovative activity and the level of economic activity although this may have changed in the 1980s finally the data provide no reason for thinking that these clusters of innovation cause cyclic variations in economic activity but variations in economic activity do granger cause changes in innovative activity copyright 1995 by royal economic society

non convex costs and capital utilization a study of production scheduling at automobile assembly plants i study detailed data from eleven automobile assembly plants these data display considerable cross plant heterogeneity in production scheduling to explain the observed heterogeneity i solve a dynamic programming model when desired production is below the plant s minimum e cient scale non convexities induce production bunching the plant uses less than full capital utilization on average and production is more volatile than sales when desired production is above the plant s minimum e cient scale the plant operates in a convex region of the cost curve in this case it uses high levels of capital utilization and production is less volatile than sales 2000 elsevier science b v all rights reserved jel classixcation e23 d21 l23

openness and innovation home and export demand effects on manufacturing innovation panel data evidence for ireland and switzerland abstract recent studies in the tradition of schmookler have re emphasised the potential role of demand in stimulating innovation here we reconsider the role of home and export market demand in stimulating manufacturing innovation using comparable panel data for two small open economies ireland and switzerland our analysis is based on the estimation of reduced form innovation production functions using panel data estimators over the sample period 1994 2005 for a range of innovation indicators however we find little evidence of any significant market demand effects with innovation performance instead determined largely by firm level capability effects and characteristics in policy and strategy terms this suggests the continued value of measures to improve innovation capability regardless of market demand conditions in more methodological terms our results suggest the validity of the usual assumption implicit in modelling innovation outputs that supply side factors predominate

production and inventory control at the general motors corporation during the 1920 s and 1930 s this paper analyzes dynamics of production and inventories at the general motors corporation during the 1920s and 1930s the authors begin by examining anecdotal evidence on the nature of the production control system in force during that period motivated by that evidence they then extend the conventional linear quadratic model of production behavior to take account of annual shutdown finally the authors apply the modified model to newly available data on monthly unit production sales and inventories during 1924 40 general motors appears to have been aiming to maintain a targeted level of inventory relative to expected sales and secondarily to smooth production copyright 1993 by american economic association