bluuebunny/crossref_metadata_2025 huggingface dataset:
PEDAGOGICAL CHALLENGE: TEACHING INTERNATIONAL PRODUCTION AND OPERATIONS MANAGEMENT COURSES
Authors: Starr Martin K.
Published: August 2010

There should be two distinctly different pom introductory courses (or even tracks) for MBAs. Course one (called pom) would consist of traditional pom materials emphasizing domestic POM course materials. Course two, called international production and operations management (ipom), would focus on international aspects of pom, emphasizing cross‐boundary operations. Training of instructors differs significantly for the two courses. ipom accentuates operations crossing borders where different languages, cultures and currencies apply. The ipom syllabus employs cases and examples based on companies and/or divisions located in a great variety of countries. Three important drivers of the international pom curriculum should be recognized: (1) supply chain management with ipom responsible for coordinating sources‐of materials as well as making and delivering goods and services across global boundaries, (2) portfolio management because ipom can reduce risks by geographically diversifying operations, and (3) capabilities management because ipom must spot, develop and implement special global opportunities. Teaching how these three international drivers interact challenges the pom field to provide proper curriculum development and instructor methodology.
REENGINEERING CHANNEL REORDERING PROCESSES TO IMPROVE TOTAL SUPPLY‐CHAIN PERFORMANCE
Authors: CLARK THEODORE H. , HAMMOND JANICE H.
Published: August 2010

This paper discusses the relationship between business process reengineering and channel performance for firms implementing electronic data interchange (EDI) linkages within the U.S. grocery industry. Both quantitative and qualitative data sources are combined to test the hypothesis that channel transformation involving adoption of EDI and redesign of replenishment processes enables performance improvements more than an order of magnitude greater than implementation of EDI alone. This new process, enabled by EDI, provides retailers with 50‐ 100% higher inventory turns for products on continuous replenishment processes (CRP) relative to retailer performance using traditional ordering processes. Firms adopting EDI without using CRP to reengineer the ordering processes have failed to realize any statistically significant improvements in either inventory levels or warehouse stockouts. This research provides evidence to support the claims of process reengineering that are common in the popular business press, but for which statistically significant empirical evidence is minimal. The findings of the research also demonstrate the potential improvements that firms can realize through extending the business process reengineering concept to include the firms' entire supply chain.
CAMPBELL SOUP'S CONTINUOUS REPLENISHMENT PROGRAM: EVALUATION AND ENHANCED INVENTORY DECISION RULES
Authors: CACHON GfiRARD , FISHER MARSHALL
Published: August 2010

Campbell Soup's continuous replenishment (CR) program is a novel innovation designed to improve the efficiency of inventory management throughout the supply chain. With CR (1) retailers pay a constant wholesale price but continue to participate in consumer promotions, (2) retailers transmit to the supplier daily inventory information via electronic data interchange (EDI), and (3) the supplier assumes responsibility for managing retailer inventories, i.e., vendor managed inventories (VMI). We develop simple inventory management rules to operate CR, and we test these rules with a simulation using actual demand data provided by Campbell Soup. On this sample we find that retailer inventories were reduced on average by 66% while maintaining or increasing average fill rates. This improvementreduces a retailer's cost of goods sold by ~1.2%, which is significant in the low profitmargin grocery industry. Furthermore, these savings could have been achieved without VMI.
DYNAMIC GRAPHICAL ASSESSMENT OF INTERACTION EFFECTS IN DESIGN OF EXPERIMENTS
Authors: MOSKOWITZ HERBERT , PLANTE ROBERT D.
Published: August 2010

Design of experiments has been and continues to be employed successfully for the robust design of products/processes. A principle contention in these areas of application concerns whether or not interactive effects should be estimated. The arguments, for and against, hinge on an experimenter's understanding of the interaction concept and on the value added that is derived from the increased effort required for assessing such effects. We propose an interactive graphics approach that assesses whether and which interactive effects to estimate. Our methodology yields several additional benefits to the experimenter that include prototype simulation and unique learning opportunities for augmenting process knowledge in post‐analysis.
TPM: PLANNED AND AUTONOMOUS MAINTENANCE: BRIDGING THE GAP BETWEEN PRACTICE AND RESEARCH
Authors: MCKONE KATHLEEN E. , WEISS ELLIOTT N.
Published: August 2010

Competitive pressures and changing production management paradigms have, in recent years, increased the importance of reliable and consistent production equipment. Initially, the Japanese, and now others, have espoused the virtues of a management philosophy known as total productive maintenance (TPM). We are interested in the maintenance‐investment decisions for TPM. This paper (1) describes the basic elements of TPM programs, (2) categorizes the relevant research literature using a practitioner's framework for autonomous and planned maintenance activities, and (3) identifies the current gaps between practitioner needs and academic research in the area of TPM and offers suggestions to close the gaps.
DECENTRALIZED MULTIECHELON INVENTORY CONTROL
Authors: ANDERSSON JONAS , AXSÄTER SVEN , MARKLUND JOHAN
Published: August 2010

This paper considers a model for decentralized control of an inventory system consisting of 1 central warehouse and a number of retailers. The cost structure includes holding costs at both echelons and shortage costs proportional to the time until delivery at the retailers. We analyze a procedure for coordinated but still decentralized control of the system. The procedure is based on a simple approximation, in which the stochastic lead times perceived by the retailers are replaced by their correct averages. The approximation enables us to decompose the considered multiechelon inventory problem into a number of single echelon problems, 1 for each installation. The information about how a certain decision at the warehouse affects the retailers is conveyed through the marginal cost increase with respect to a change of the expected lead time. This information about the retailer costs is used as a shortage cost at the warehouse. We show that a coordination procedure based on this information can be used for finding near‐optimal reorder points for the system and provide bounds for the approximation errors.
PROCESS IMPROVEMENT: AN EXPLORATORY DATA ANALYSIS APPROACH WITHIN AN INTERVAL‐BASED OPTIMIZATION FRAMEWORK
Authors: SARAIVA PEDRO M. , STEPHANOPOULOS GEORGE
Published: August 2010

This article revisits an old problem; “systematically explore the information contained in a set of operating data records and find from it how to improve operational performance by taking the appropriate decisions in the space of operating conditions,” thus leading to continuous process improvement. A series of industrial case studies within the framework of the internships in the Leaders for Manufacturing (LFM) program at Massachusetts Institute of Technology led us to a reexamination of the traditional formulations for the above problem. The resulting methodology is characterized by the following features: (1) problem statement and solutions are expressed in terms of hyperrectangles in the decision space, replacing conventional pointwise results; (2) data‐driven, nonparametric learning methodologies were advanced to produce the requisite mapping between performance and decisions; (3) operating performance is in essence multifaceted, leading to a multiobjective problem, which is treated as such. The proposed methodology has been applied to a number of industrial examples and in this paper we provide a brief overview only of those that can be discussed in the open literature.
COMMUNICATING IN THE POM CLASS: AN AUTHOR'S PERSPECTIVE
Authors: RENDER BARRY
Published: August 2010

The author, who has written nine textbooks in 26 editions over the past two decades, discusses his ideas of how to bring a production and operations management course alive. He introduces a model that ties together the use of text with both ancillary materials that accompany that book as well as with other tools available independent of the text. Some of these tools are technology driven (e.g., CD ROMS and the Internet), while others bring real business exposure to the course (e.g., field study consultancies, guest speakers, and plant tours).
EXTENDING THE BOUNDARIES OF OPERATIONS MANAGEMENT: AN INTERNATIONAL FIELD‐STUDIES APPROACH INTEGRATING INFORMATION SYSTEMS
Authors: KUMAR K. RAVI , SAWY OMAR EL
Published: August 2010

Continued globalization, extensive use of information technologies, increasing cross‐functional dependencies, and new organizational forms are rapidly changing the learning context of operations management. This paper describes an example of a mba elective course that has been created to address and learn from these new realities. We have taken a process view of the global firm, focusing mainly on the new product/service development, order fulfillment, and supply chain/ after‐sales service processes. We have designed our course to contain most of the traditional topics in operations management (om) with information systems (is) woven in to support the key business processes. Our underlying belief is that these two functional areas should be seen as a blend, a seamless merging of the two fields, to obtain a competitive advantage. Besides teaching om and is in this integrated manner, the course engages in face‐to‐face student consulting projects with multinational companies. This paper describes our rationale for the course design and how it has been implemented over the last 6 years‐as well as our plans for the future.
THE USE OF INDUSTRIAL SOFTWARE TO CREATE EXPERIENTIAL LEARNING ACTIVITIES IN OPERATIONS MANAGEMENT COURSES
Authors: LAFORGE R. LAWRENCE , BUSING MICHAEL E.
Published: August 2010

Computer‐based manufacturing planning and control (MPC) systems are widely used in industry to gain competitive advantage through integration and coordination of managerial activities. In collegiate business schools, important operations management activities are taught and studied, often by sequential examination of discrete topics such as aggregate production planning, master production scheduling, capacity planning, material planning, and production activity control. This paper explores the potential use of industrial MPC software in the classroom to create experiential learning activities that address the dynamic and integrative nature of operations management. Experiences with this pedagogical approach over the past decade are reported.
HOW PROFESSORS OF OPERATIONS MANAGEMENT VIEW SERVICE OPERATIONS?
Authors: Nie Winter , Kellogg Deborah L.
Published: August 2010

This study empirically tests assumptions that underlie operations management (OM) scholars' belief that service operations should be managed differently. Respondents were self‐classified into manufacturing and service types. There is a significant statistical difference between the views held by each group with regard to statements such as “service Om should be taught as a separate course” and “service operations should be managed differently from manufacturing.” There was general consensus on the service research agenda with the exception of three research areas: time standards, technology, and productivity. The survey also revealed that customer influence has the greatest impact on service Om strategies and decisions.
RETAIL INVENTORY CONTROL WITH LOST SALES, SERVICE CONSTRAINTS, AND FRACTIONAL LEAD TIMES
Authors: Kapalka Brian A. , Katircioglu Kaan , Puterman Martin L.
Published: August 2010

This paper describes a periodic review, fixed lead time, single‐product, single‐facility model with random demand, lost sales and service constraints that was developed for potential application at a Western Canadian retailer. The objective of this study was to determine optimal ( s, S) policies for a large number of products and locations. To this end, we evaluate the long run average cost and service level for a fixed ( s, S) policy and then used a search procedure to locate an optimal policy. The search procedure is based on an efficient updating scheme for the transition probability matrix of the underlying Markov chain, bounds on S and monotonicity assumptions on the cost and service level functions. A distinguishing feature of this model is that lead times are shorter than review periods so that the stationary analysis underlying computation of costs and service levels requires subtle analyses. We compared the computed policies to those currently in use on a test bed of 420 products and found that stores currently hold inventories that are 40% to 50% higher than those recommended by our model and estimate that implementing the proposed policies for the entire system would result in significant cost savings.
OPTIMALITY OF STATE‐DEPENDENT (s, S) POLICIES IN INVENTORY MODELS WITH MARKOV‐MODULATED DEMAND AND LOST SALES
Authors: Cheng Feng , Sethi Suresh P.
Published: August 2010

Markov‐modulated processes have been used in stochastic inventory models with setup costs for modeling demand under the influence of uncertain environmental factors, such as fluctuating economic and market conditions. The analyses of these models have been carried out in the literature only under the assumption that unsatisfied demand is fully backlogged. The lost sales situation occurs in many retail establishments such as department stores and supermarkets. We use the analysis of the Markovian demand model with backlogging to analyze the lost sales case; in particular, we establish the optimality of an ( s, S)‐type policy under fairly general conditions.
DECOMPOSITION ALGORITHM FOR PERFORMANCE EVALUATION OF AGV SYSTEMS
Authors: Nakano Masaru , Ohno Katsushisa
Published: August 2010

This paper proposes a realistic queueing model of automated guided vehicle (agv) systems in just‐in‐time production systems. The model takes into consideration return paths, Erlang distributed service times, and pull‐type dispatching rule, assuming finite buffer capacities. Since it has no product‐form solution and natural decomposability due to complex nontree fork‐cum‐join architecture and dynamic dispatching rules, we propose a machine‐based decomposition algorithm for the performance evaluation of the model. Each decomposed module consists of the processing machine and its dispatching station. Three flow probabilities, derived from flow conservation analysis, relate the modules, which are updated iteratively until the parameters converge. The numerical results from a real‐life Agv system application show that the algorithm is reasonably accurate.
A REVIEW OF FLOWSHOP SCHEDULING RESEARCH WITH SETUP TIMES
Authors: CHENG T. C. EDWIN , GUPTA JATINDER N. D. , WANG GUOQING
Published: August 2010

Flowshop scheduling problems with setup times arise naturally in many practical situations. This paper provides a review of static and deterministic flowshop scheduling research involving machine setup times. The literature is classified into four broad categories, namely sequence independent job setup times, sequence dependent job setup times, sequence independent family setup times, and sequence dependent family setup times. Using the suggested classification scheme, this paper organizes the flowshop scheduling literature involving setup and/or removal times and summarizes the existing research for different flowshop problem types. This review reveals that, while a considerable body of literature on this subject has been created, there still exist several potential areas worthy of further research.
A SIMULATION GAME FOR TEACHING SERVICE‐ORIENTED SUPPLY CHAIN MANAGEMENT: DOES INFORMATION SHARING HELP MANAGERS WITH SERVICE CAPACITY DECISIONS?
Authors: Anderson Edward G. , Morrice Douglas J.
Published: August 2010

For decades, the Beer Game has taught complex principles of supply chain management in a finished good inventory supply chain. However, services typically cannot hold inventory and can only manage backlogs through capacity adjustments. We propose a simulation game designed to teach service‐oriented supply chain management principles and to test whether managers use them effectively. For example, using a sample of typical student results, we determine that student managers can effectively use end‐user demand information to reduce backlog and capacity adjustment costs. The game can also demonstrate the impact of demand variability and reduced capacity adjustment time and lead times.
A PRACTICAL SETTING FOR EXPERIENTIAL LEARNING ABOUT SUPPLY CHAINS: SIEMENS BRIEF CASE GAME SUPPLY CHAIN SIMULATOR
Authors: Mehring Joyce S.
Published: August 2010

Siemens Brief Case Game Supply Chain Simulator provides a practical setting for experiential learning exercises about supply chains. The game, drawing upon an actual situation, models the jobs of nine supply chain activities required to transform an order placed by the customer into a delivered product. Using the detail and complexity of the game, instructors can develop learning exercises that focus on a wide range of supply chain management issues. This paper describes two learning exercises with different objectives and for different audiences that we successfully delivered using the Brief Case Game. One exercise provides a concrete example of typical activities in a supply chain and their interactions. The other exercise leads students to discover what creates a need for coordination, what activities in a supply chain require coordination, and what methods work well. These exercises are suited for small upper level undergraduate and graduate courses in logistics and supply chain management. While significant resources were used to develop exercises and deliver the game, students were enthusiastic about the approach and demonstrated that they learned about the complexity inherent in managing supply chains.
ROBUSTNESS OF VARIOUS PRODUCTION CONTROL POLICIES IN SEMICONDUCTOR MANUFACTURING
Authors: Yan Houmin , Lou Sheldon , Sethi Suresh P.
Published: August 2010

This paper compares several different production control policies in terms of their robustness to random disturbances such as machine failures, demand fluctuations, and system parameter changes. Simulation models based on VLSI wafer fabrication facilities are utilized to test the performance of the policies. Three different criteria, namely, the average total WIP, the average backlog, and a cost function combining these measures, are used to evaluate performance. Among the policies tested, the Two‐Boundary Control policy outperforms the others.
ECONOMIC PROCESS CONTROL UNDER UNCERTAINTY
Authors: Kanyamibwa Felicien , Ord J. Keith
Published: August 2010

The future of the global industry lies in the continuous improvement of both products and processes, a renewed commitment to competition, and an aggressive approach to satisfying customers needs in quality, quantity, and timing. In quality management, the degree of customer satisfaction for a given product may be measured in the form of the loss to society. This loss is formulated as a function of the deviation from the target for each of the product's quality characteristics. The greater the variability of uncontrolled factors during manufacturing or production the larger will be that loss.

In this paper, we develop a form of the loss function that takes into account the variability of a production process, the decision loss, and the costs of sampling and inspection. Specifically, we consider monitoring a production process, which may undergo continuous mean shift and variance deterioration during a production run. We then examine decision rules for continuing production or stopping and adjusting the production process.
IMPROVING JOB SHOP PERFORMANCE THROUGH PROCESS QUEUE MANAGEMENT UNDER TRANSFER BATCHING
Authors: LITCHFIELD JOEL , NARASIMHAN RAM
Published: August 2010

This research investigated the value of protecting the continuity of release batchs in a transfer batching environment, by modifying the SPT rule. A simulation model of a job shop was used to test the modified SPT rule. The performance measures evaluated were mean flow time, flow time variance, and mean lateness. Conditions under which the SPT modification improved results were as follows: large number of transfer batches, small setup time to process time ratio, and large variation in process times from station to station. The results suggest that shop loading is not a significant factor affecting performance of the modified SPT rule.
TWO‐ AND THREE‐STAGE FLOWSHOP SCHEDULING WITH NO‐WAIT IN PROCESS
Authors: CHENG T. C. EDWIN , SRISKANDARAJAH CHELLIAH , WANG GUOQING
Published: August 2010

In this paper we study the time complexities of some two‐ and three‐stage no‐wait flowshop makespan scheduling problems where, in some stage, all the jobs require a constant processing time and the stage may consist of parallel identical machines. Polynomial time algorithms are presented for certain problems, while several others are proved to be strongly NP‐complete.
COMBINED PRODUCTION AND MAINTENANCE SCHEDULING FOR A MULTIPLE‐PRODUCT, SINGLE‐ MACHINE PRODUCTION SYSTEM
Authors: SLOAN THOMAS W. , SHANTHIKUMAR J. GEORGE
Published: August 2010

Traditionally, the problems of equipment maintenance scheduling and production scheduling in a multi‐product environment have been treated independently. In this paper, we develop a Markov decision process model that simultaneously determines maintenance and production schedules for a multiple‐product, single‐machine production system, accounting for the fact that equipment condition can affect the yield of different product types differently. The problem was motivated by an application in semiconductor manufacturing. After examining structural properties of the optimal policy, we compare the combined method to an approach often used in practice. In the nearly 6,000 test problems studied, the reward from the combined method was an average of more than 25 percent greater than the reward from the traditional method.
LIABILITY AS A CATALYST FOR PRODUCT STEWARDSHIP
Authors: SNIR ELI M.
Published: August 2010

Product stewardship is the set of practices related to reducing risks from chemical and process hazards in a company's supply chain. This paper develops an economic framework for evaluating supply chain liability as a driver for adopting product stewardship. Companies that outsource production may face residual liability for damages from use of their products, when liabilities are large enough to exceed supply chain partners' assets. The resulting potential liabilities can be mitigated through product stewardship. This paper shows that extended supply chain liabilities provide incentives for investing in reducing environmental hazards throughout the supply chain.
PRODUCT AND SERVICE QUALITY: THE ANTECEDENTS OF CUSTOMER LOYALTY IN THE AUTOMOTIVE INDUSTRY
Authors: DEVARAJ SARV , MATTA KHALIL F. , CONLON EDWARD
Published: August 2010

Prior literature has examined product quality and service quality separately as antecedents of customer loyalty. In the context of the automotive industry, we present a framework that examines the simultaneous impact of product and service quality on consumers' purchase intentions. The framework is operationalized as several hypotheses that posit relationships between service quality, service satisfaction, product quality, and customer loyalty. The hypotheses are tested using three sources of data: (i) archival data on product quality and customer purchases, (ii) consumersíresponses to a survey instrument, and (iii) Consumer Reports. Results indicate general support for main hypotheses proposed.
BEYOND PRACTICES: A QUALITATIVE INQUIRY INTO HIGH PERFORMANCE ELECTRONICS ASSEMBLY
Authors: DOSTALER ISABELLE
Published: August 2010

This paper is based on the cumulative or synergies theory of manufacturing performance, as opposed to the trade‐off perspective. The paper compares the cases of two British contract electronics assemblers, the first one having achieved a high level of performance on productivity, quality, and dependability, and the second one having achieved a lower level of performance on these criteria but higher flexibility. The case material is used to develop a “high school” analogy that helps to understand why companies come to achieve cumulative manufacturing performance in an industrial sector where competitive pressure is particularly high.
PROGRESS IN OPERATIONS MANAGEMENT
Authors: GEOFFRION ARTHUR M.
Published: August 2010

In this issue, Robert Hayes has written provocatively about the implications of the digital economy for Operations Management (om). Here I examine and illustrate a simple four‐stage framework for thinking about these implications: advances in digital technology (stage 1) lead to business developments (stage 2), which impact the views of OM‐relevant thought leaders (stage 3), which influence the conduct of OM activities (stage 4). This framework provides a perspective for viewing the evolution of OM and indicates how educators, researchers, and practitioners can steal the march on mainstream thinking.
TIME‐BASED PRICING AND LEADTIME POLICIES FOR A BUILD‐TO‐ORDER MANUFACTURER
Authors: TANG KWEI , TANG JEN
Published: August 2010

We studied time‐based policies on pricing and leadtime for a build‐to‐order and direct sales manufacturer. It is assumed that the utility of the product varies among potential customers and decreases over time, and that a potential customer will place an order if his or her utility is higher than the manufacturer's posted price. Once an order is placed, it will be delivered to the customer after a length of time called “leadtime.” Because of the decrease in a customer's utility during leadtime, a customer will cancel the order if the utility falls below the ordering price before the order is received. The manufacturer may choose to offer discounted prices to customers who would otherwise cancel their orders. We discuss two price policies: common discounted price and customized discounted price. In the common discounted price policy, the manufacturer offers a single lower price to the customers; in the customized discounted price policy, the manufacturer offers the customers separately for individual new prices. Our analytical and numerical studies show that the discounted price policies results in higher revenue and that the customized discounted price policy significantly outperforms the common discounted price policy when product utility decreases rapidly. We also study two leadtime policies when production cost decreases over time. The first uses a fixed leadtime, and the second allows the leadtime to vary dynamically over time. We find that the dynamic leadtime policy significantly outperforms the fixed leadtime policy when the product cost decreases rapidly.
VERTICAL INFORMATION EXCHANGE IN A SUPPLY CHAIN WITH DUOPOLY RETAILERS
Authors: ZHANG HONGTAO
Published: August 2010

We consider a supply chain with one manufacturer in the upstream and two competing retailers in the downstream. The retailers sell differentiated goods and are endowed with some private demand information. The paper shows that the manufacturer's optimal strategy is independent of the type of downstream competition, Cournot or Bertrand, and that no information will be shared with the manufacturer on a voluntary basis. However, complete information sharing, which benefits all three parties, can be achieved through side payment when the retailers' information is statistically less accurate or when the leakage effect is more beneficial to the retailers.
EFFECTS OF RANDOM SHIFTS OF TESTING EQUIPMENT ON PROCESS CONTROL SYSTEM DESIGN AND SELECTION OF PROCESS CONTROL POLICIES*
Authors: DING JIE , GONG LINGUO , TANG KWEI
Published: August 2010

This paper studies issues associated with designing process control systems when the testing equipment is subjected to random shifts. We consider a production process with two states: in control and out of control. The process may shift randomly to the out‐of‐control state over time. The process is monitored by periodically sampling finished items from the process. The equipment used to test sampled items also is assumed to have two states and may shift randomly during the testing process. We formulate a cost model for finding the optimal process control policy that minimizes the expected unit time cost. Numerical results show that shifts of the testing equipment may significantly affect the performance of a process control policy. We also studied the effects of the testing equipment's shifts on the selection of process control policies.
MULTI‐VENDOR SOURCING IN A RETAIL SUPPLY CHAIN*
Authors: AGRAWAL NARENDRA , SMITH STEPHEN A. , TSAY ANDY A.
Published: August 2010

This paper describes a methodology for managing capacity, inventory, and shipments for an assortment of retail products produced by multiple vendors. The vendors differ in lead times, costs, and production flexibility. Product demand is uncertain and fluctuates over time. We develop an optimization model to choose the production commitments that maximize the retailers expected gross profit, given demand forecasts and vendors capacity and flexibility constraints. The model has been incorporated into a decision support system, developed in collaboration with supply chain planners at a global retailer of seasonal and fashion merchandise. The software has been tested by two major retailers.
APPLYING SCENARIO‐DRIVEN STRATEGY TO INTEGRATE ENVIRONMENTAL MANAGEMENT AND PRODUCT DESIGN
Authors: NOORI HAMID , CHEN CHIALIN
Published: August 2010

The successful development of breakthrough products with environmental attributes can not only create competitive advantage through operations excellence but also benefit the environment. This paper proposes a comprehensive scenario‐driven method with detailed implementation steps for planning and developing breakthrough products with environmental attributes. A case study based on the development process of biotechnology products is presented to show the applications of the method and the resulting importance of flexibility as a key ingredient in operations strategy. The paper also discusses various operational, marketing, technological, economic, and environmental issues concerning the development of biotechnology products, an area that could have a significant impact on both human health and the natural environment.
GREENING THE SERVICE PROFIT CHAIN: THE IMPACT OF ENVIRONMENTAL MANAGEMENT PRACTICES
Authors: KASSINIS GEORGE I. , SOTERIOU ANDREAS C.
Published: August 2010

This paper explores the relationship between environmental practices and performance in services and the impact of such practices on the external portion of the service profit chain. Using structural equation modeling, it tests the hypotheses developed with data from the European hospitality industry. The findings suggest that environmental practices are positively related to performance through the mediating effect of enhanced customer satisfaction and loyalty. The paper's contributions include: the conceptual development of the relationship between environmental practices and performance in services, the incorporation of environmental practices within the service profit chain, and the testing of their impact on customer satisfaction.
MANAGING CYCLIC INVENTORIES
Authors: BRADLEY JAMES R. , CONWAY RICHARD W.
Published: August 2010

Cyclic inventory is the buffer following a machine that cycles over a set of products, each of which is subsequently consumed in a continuous manner. Scheduling such a machine is interesting when the changeover times from one product to another are non‐trivial—which is generally the case. This problem has a substantial literature, but the common practices of “lot‐splitting” and “maximization of utilization” suggest that many practitioners still do not fully understand the principles of cyclic inventory. This paper is a tutorial that demonstrates those principles. We show that cyclic inventory is directly proportional to cycle length, which in turn is directly proportional to total changeover time, and inversely proportional to machine utilization. We demonstrate the virtue of “maximum changeover policies” in minimizing cyclic inventory—and the difficulty in making the transition to an increased level of demand. In so doing, we explicate the different roles of cyclic inventory, transitional inventory, and safety stock. We demonstrate the interdependence of the products in the cycle—the lot‐size for one product cannot be set independently of the remaining products. We also give necessary conditions for consideration of improper schedules (i.e., where a product can appear more than once in the cycle), and demonstrate that both lot‐splitting and maximization of utilization are devastatingly counter‐productive when changeover time is non‐trivial.
MEASURING AND COMPARING VOLUME FLEXIBILITY IN THE CAPITAL GOODS INDUSTRY
Authors: JACK ERIC P. , RATURI AMITABH S.
Published: August 2010

This paper presents a theoretical framework for measuring volume flexibility and relating these measures to firm performance. We develop four metrics using the principle that a volume flexible firm can handle similar levels of uncertainty (as measured by sales variability) with smaller fluctuations in inputs (as measured by variability in cost of goods sold and variability in inventory levels). Then, using 20 years of Compustat data on 550 firms in the capital goods industry, we find that on three of four process‐based measures, small firms are more volume flexible. However, when we incorporate financial performance into our fourth metric, we find that large firms are more volume flexible. We conclude that, to be volume flexible is one thing, but to benefit from this flexibility, firms need to focus on the cost of being flexible.
A MARKET UTILITY‐BASED MODEL FOR CAPACITY SCHEDULING IN MASS SERVICES
Authors: GOODALE JOHN C. , VERMA ROHIT , PULLMAN MADELEINE E.
Published: August 2010

Only a small set of employee scheduling articles have considered an objective of profit or contribution maximization, as opposed to the traditional objective of cost (including opportunity costs) minimization. In this article, we present one such formulation that is a market utility‐based model for planning and scheduling in mass services (MUMS). MUMS is a holistic approach to market‐based service capacity scheduling. The MUMS framework provides the structure for modeling the consequences of aligning competitive priorities and service attributes with an element of the firm's service infrastructure. We developed a new linear programming formulation for the shift‐scheduling problem that uses market share information generated by customer preferences for service attributes. The shift‐scheduling formulation within the framework of MUMS provides a business‐level model that predicts the economic impact of the employee schedule. We illustrated the shift‐scheduling model with empirical data, and then compared its results with models using service standard and productivity standard approaches. The result of the empirical analysis provides further justification for the development of the market‐based approach. Last, we discuss implications of this methodology for future research.
PIECING TOGETHER SERVICE QUALITY: A FRAMEWORK FOR ROBUST SERVICE*
Authors: STEWART DOUGLAS M.
Published: August 2010

This paper addresses the issue of service design, specifically that of designing the service encounter for improved quality. We introduce a framework based on the three T's of task, treatment, and tangibles as a means of organizing the application of the diverse and growing body of service quality literature to encounter design. The framework is consistent with how successful service managers disaggregate the design problem. More importantly, we show that mutually supportive interrelationships between the three T's produce an opportunity for designing in a robustness to service failure. The framework is supported by case based evidence.
Revenue‐Sharing vs. Wholesale‐Price Contracts in Assembly Systems with Random Demand
Authors: Gerchak Yigal , Wang Yunzeng
Published: August 2010

Assembly and kitting operations, as well as jointly sold products, are rather basic yet intriguing A decentralized supply chains, where achieving coordination through appropriate incentives is very important, especially when demand is uncertain. We investigate two very distinct types of arrangements between an assembler/retailer and its suppliers. One scheme is a vendor‐managed inventory with revenue sharing, and the other a wholesale‐price driven contract. In the VMI case, each supplier faces strategic uncertainty as to the amounts of components, which need to be mated with its own, that other suppliers will deliver. We explore the resulting components' delivery quantities equilibrium in this decentralized supply chain and its implications for participants' and system's expected profits. We derive the revenue shares the assembler should select in order to maximize its own profits. We then explore a revenue‐plus‐surplus‐subsidy incentive scheme, where, in addition to a share of revenue, the assembler also provides a subsidy to component suppliers for their unsold components. We show that, by using this two‐parameter contract, the assembler can achieve channel coordination and increase the profits of all parties involved. We then explore a wholesale‐price‐driven scheme, both as a single lever and in combination with buybacks. The channel performance of a wholesale‐price‐only scheme is shown to degrade with the number of suppliers, which is not the case with a revenue‐share‐only contract.
Quantity Discount‐Based Inventory Coordination: Effectiveness and Critical Environmental Factors
Authors: Shin Hojung , Benton W. C.
Published: August 2010

It is understood that quantity discounts provide a practical foundation for coordinating inventory decisions in supply chains. The primary objective of this research is to test, under a variety of environmental conditions, the effectiveness of quantity discounts as an inventory coordination mechanism between a buyer and a supplier. A comprehensive simulation experiment with anova has been designed to investigate the impacts of (1) choice of quantity discount‐based inventory coordination policies, (2) magnitude of demand variation, (3) buyer's and supplier's relative inventory cost structure, and (4) buyer's economic time‐between‐orders on the effectiveness of supply chain inventory coordination. The analytical results confirm that the quantity discount policies have managerial properties as a mediator for inventory coordination. The results also show that the performance of quantity discount‐based inventory coordination policies is influenced significantly by environmental factors, such as the magnitude of demand variation, the buyer's and the supplier's inventory cost structure, and the buyer's economic time‐between‐orders.
Channel Conflict and Coordination in the E‐Commerce Age
Authors: Tsay Andy A. , Agrawal Narendra
Published: August 2010

A number of factors, including developments in Internet‐based commerce and third‐party logistics, have led many companies to consider engaging in direct sales. Such a company may at once be both a supplier to and a direct competitor of any existing reseller partners (e.g., land‐based retailers), which can result in “channel conflict.” This can have momentous implications for distribution strategy.

To generate managerial insights into this important issue, we develop a model that captures key attributes of such a setting, including various sources of inefficiency. We examine these in detail and identify a number of counterintuitive structural properties. For instance, the addition of a direct channel alongside a reseller channel is not necessarily detrimental to the reseller, given the associated adjustment in the manufacturer's pricing. In fact, both parties can benefit.

Finally, we examine ways to adjust the manufacturer‐reseller relationship that have been observed in industry. These include changes in wholesale pricing, paying the reseller a commission for diverting customers toward the direct channel, or conceding the demand fulfillment function entirely to the reseller. The latter two schemes could be mutually beneficial in that they achieve a division of labor according to each channel's competitive advantage.
Capacity Allocation among Multiple Suppliers in an Electronic Market
Authors: Hazra Jishnu , Mahadevan B. , Seshadri Sudhi
Published: August 2010

An electronic marketplace typically provides industrial suppliers an alternative option for selling their capacity in addition to the traditional open market. However, suppliers face different sets of costs and risks in open market and in electronic market. Consequently, suppliers participating in an electronic market are likely to offer their capacity at a different price compared with traditional open market. We analyze this problem and derive the price‐capacity function for the supplier. We also derive a basis for allocating buyer's requirements among multiple suppliers so as to minimize his cost. Our model shows that suppliers with large capacities would quote a lower price in the electronic market. It also predicts that the unit bid price increases with bid quantity in the electronic market. Based on the price‐capacity curve, we model a scenario where the buyer announces, a priori, the number of suppliers to be selected for award of a contract that will minimize its costs.
Risk Pooling Advantages of Manufacturing Network Configuration
Authors: Kulkarni Shailesh S. , Magazine Michael J. , Raturi Amitabh S.
Published: August 2010

The decision of a firm to set up a plant network is influenced by a number of factors, including demand fluctuations across its portfolio of products, logistics costs, and service level requirements. Product plant networks offer the benefits of consolidated production and reduced transshipment costs; on the other hand, process plant networks allow intensive dedication to process expertise and economies of scale. In this paper, we show that, aside from these benefits, process plant networks offer significant risk pooling advantages under a wide range of conditions. We analytically demonstrate that, even without accounting for economies of scale advantages, firms may prefer the process plant network configuration due to the risk pooling benefits offered.
Erratum: Amplification in Service Supply Chains: An Exploratory Case Study from the Telecom Industry
Authors: Akkermans Henk , Vos Bart
Published: August 2010

This erratum contains the appendix that was omitted from the original paper by H. Akkermans and B. Vos, “Amplification in service supply chains: an exploratory study from the telecom industry”, Production and Operations Management, 12, 2, 204–223.
Volume Flexible Strategies in Health Services: A Research Framework
Authors: Jack Eric P. , Powers Thomas L.
Published: August 2010

The prevalence of fluctuating demand is increasingly seen as a serious and ongoing issue facing the health services industry. Volume flexibility in a health care setting represents a means to improve service delivery and it allows organizations to leverage their scarce resources for optimal utilization in response to fluctuations in patient demand. This paper develops a research framework that describes four volume flexible strategies based on literature reviews and structured field interviews of health care administrators at a Carnegie I research and teaching hospital. This prescriptive framework and the propositions that are developed create a foundation to help guide future research on the important relationships between demand uncertainty, volume flexible strategies, and organizational performance.
The Creation of Output and Quality in Services: A Framework to Analyze Information Technology‐Worker Systems
Authors: Napoleon Karen , Gaimon Cheryl
Published: August 2010

Information technology has profoundly impacted the operations of firms in the service industry and service environments within manufacturing. Two models are introduced that establish a conceptual framework linking firm profit to attributes of the IT‐worker system. The framework considers the impact of IT capabilities (such as functionality and ease‐of‐use) and worker skill as drivers of output volume and quality. The framework contrasts attributes of the IT‐worker systems when services are mass‐produced (flow shop) versus customized (job shop). Mathematical models are introduced to formalize the conceptual framework. Numerical examples are presented that illustrate the types of insights that can be obtained from the models.
Response to “Revisiting ISO 14000 Diffusion: A New ”Look“ at the Drivers of Certification”
Authors: Corbett Charles J. , Kirsch David A.
Published: August 2010

In Corbett and Kirsch (2001), we used a simple regression in an exploratory investigation of drivers of global diffusion of ISO 14000 certification. We found that ISO 9000 certification levels, environmental treaties ratified, and exports as a proportion of GDP were the main significant variables, where the environmental measure may be moderated by GDP per capita. In his replication study, Vastag (2004, in this issue) analyzes the same data using more visual techniques, specifically regression trees, and finds support for the significance of ISO 9000 certification levels and environmental treaties ratified, but not for export‐propensity. Vastag raises a number of relevant methodological issues, to which we add some perspectives here.
An Empirical Analysis of the Effect of Supply Chain Disruptions on Long‐Run Stock Price Performance and Equity Risk of the Firm
Authors: Hendricks Kevin B. , Singhal Vinod R.
Published: August 2010

This paper investigates the long‐term stock price effects and equity risk effects of supply chain disruptions based on a sample of 827 disruption announcements made during 1989–2000. Stock price effects are examined starting one year before through two years after the disruption announcement date. Over this time period the average abnormal stock returns of firms that experienced disruptions is nearly –40%. Much of this underperformance is observed in the year before the announcement, the day of the announcement, and the year after the announcement. Furthermore, the evidence indicates that firms do not quickly recover from the negative effects of disruptions. The equity risk of the firm also increases significantly around the announcement date. The equity risk in the year after the announcement is 13.50% higher when compared to the equity risk in the year before the announcement.
A Portfolio Approach to Procurement Contracts
Authors: Martínez‐de‐Albéniz Victor , Simchi‐Levi David
Published: August 2010

The purpose of this paper is to develop a general framework for supply contracts in which portfolios of contracts can be analyzed and optimized. We focus on a multi‐period environment with convex contract, spot market, and inventory holding costs. We specialize the model to the case of a portfolio consisting of option contracts. We characterize the optimal replenishment policy and show that it has a simple structure. Namely, the use of every different option contract and the spot market is dictated by a modified base‐stock policy. In addition, we derive conditions to determine when an option is relatively attractive compared to other options or the spot market. Finally, we present our computational study, where we report the sensitivity of the results to the parameters of the model. Our experiments indicate that portfolio contracts not only increase the manufacturer's expected profit, but can also reduce its financial risk.