bluuebunny/crossref_metadata_2025 huggingface dataset:
Systems Analysis Speeds Up Chipita's Food-Processing Line
Authors: Liberopoulos George , Tsarouhas Panagiotis
Published: January 2003

Chipita International, Inc., one of Greece's largest manufacturers of bakery products and snacks, makes croissants on seven specialized processing lines in Lamia, Greece. A rise in the demand for croissants over the past years called for an increase in output. We undertook a project to determine cost-effective ways of speeding up the croissant-processing lines. We found that the efficiency of a typical line (the ratio of the effective processing rate to the nominal processing rate) was 86 percent because of equipment failures. To reduce the impact of failures and increase the efficiency of the line, we proposed to modify the line by inserting an in-process buffer-refrigerator having a capacity of 40,000 croissants in the middle of the line and by speeding up the part of the line upstream of the buffer. We found that the efficiency of the modified line would rise to just under 98 percent at a cost of a minor increase in in-process inventory. We estimated that the modified design of the line would bring in extra earnings and savings of $19,150 per week because of the resulting increase in output, the elimination of the first shift of the week, and the reduction of scrapped material during long failures.
Improving Resource Allocation Within the National Reconnaissance Office
Authors: Parnell Gregory S. , Bennett G. Edgar , Engelbrecht Joseph A. , Szafranski Richard
Published: January 2003

Each year the Operational Support Office of the US National Reconnaissance Office searches for ways to provide better space-reconnaissance information to military and national leaders. We used future value analysis, a combination of three methods to assess future opportunities: (1) a strategic assessment of future opportunities and challenges, (2) a multiple-objective decision analysis using value-focused thinking, and (3) a portfolio analysis using optimization. We then developed a multiple-objective value model to communicate values, evaluate individual tasks, and develop higher value tasks. We used an optimization model to identify the best portfolio of tasks. The office used the models to identify the best tasks for its annual budget in 1998 and, with revisions, in the next two years.
Using Simulation to Design an Automated Underground System for Transporting Freight Around Schiphol Airport
Authors: van der Heijden M. C. , van Harten A. , Ebben M. J. R. , Saanen Y. A. , Valentin E. C. , Verbraeck A.
Published: January 2003

To avoid road congestion, we are developing a highly automated underground transport system using automatic guided vehicles (AGVs) around Schiphol Airport. It is unique in its scale, incorporating 16 to 25 km tubes connecting five to 20 terminals, and it includes 200 to 400 AGVs to transport an estimated 3.5 million tons of cargo in 2020 with different ordering priorities. According to the current plans, the system will run from 2006 on. Since 1997, we have used object-oriented simulations to plan the dimensions of the system (number of AGVs, terminal sizes) and to design the layout (network, terminals). We showed that an investment reduction of plus or minus 20 percent is feasible using periodically switched one-way tube sections. We developed a variety of logistics optimization algorithms and heuristics, including allocating AGVs between terminals, scheduling terminals, and controlling traffic. We used simulation control structures to test prototype AGVs on a test site. Performing distributed simulations with a mixture of simulated and real objects, we could reduce the risks of the new technology.
Chrysler Leverages Its Suppliers' Improvement Suggestions
Authors: Hartley Janet L. , Greer Bertie M. , Park Seungwook
Published: January 2003

We examined Chrysler's SCORE (supplier cost reduction effort) supplier-suggestion process from the perspectives of Chrysler and its suppliers. Chrysler used SCORE to save over $2 billion and to build collaborative relationships with its suppliers. In our study, we observed four elements in Chrysler and its suppliers' organizations that contributed to SCORE's success: (1) designating a process champion, (2) engaging suppliers in the process, (3) motivating employees, and (4) facilitating evaluation and implementation. Companies designing a supplier-suggestion process should consider ways to reduce delays during evaluation, to minimize the number of low value suggestions, and to involve the entire supply chain.
Implementing a Distribution-Network Decision-Support System at Pfizer/Warner-Lambert
Authors: Gupta Vijay , Peters Emmanuel , Miller Tan , Blyden Kelvin
Published: January 2003

We constructed a decision-support system (DSS) to help the distribution network of Pfizer/Warner Lambert to plan its operations. Using OR tools, databases, programming languages, and spreadsheets, this system supports decisions concerning daily operations, annual planning, and long-run strategic planning. This DSS improved the firm's ability to make rapid, better-informed decisions in many different areas of distribution and supply chain ranging from individual customer deliveries to long-term manufacturing location and technology.
Assessment of Cost Uncertainties for Large Technology Projects: A Methodology and an Application
Authors: Dillon Robin L. , John Richard , von Winterfeldt Detlof
Published: January 2003

Large projects, especially those planned and managed by government agencies, often incur substantial cost overruns. The tolerance, particularly on the part of members of Congress, for these cost overruns has decreased, thus increasing the need for accurate, defensible cost estimates. Important aspects of creating responsible cost estimates are accounting for the uncertainties in these estimates, expressing the estimates clearly, and communicating them to decision makers. Our method for estimating cost uncertainties can be used at all stages of a project. It combines the principles of probabilistic risk analysis with procedures for expert elicitation to incorporate uncertainties and extraordinary events in cost estimates. The Department of Energy implemented this process to select a new tritium supply source. During this implementation, we identified four key issues in modeling cost risks: how to consider correlations among cost components, how to aggregate assessments of multiple experts, how to manage communication and information sharing among experts, and what is an appropriate discount rate for cost estimates.
Practice Abstracts
Authors: Keefer Donald L. , Bloomquist DeLyle , Graziosi David , Lei Lei , Ruszczynski Andrzej , Liu Shuguang , Zhong Hua
Published: January 2003

Practice Abstracts carries short reports of specific current or recent OR/MS projects. Often these reports are based on existing documents, such as internal reports or company newsletters. We hope that these abstracts will be accessible, interesting, and valuable to practitioners in other organizations. Contributions should be sent for evaluation to the editor of “Practice Abstracts,” Donald L. Keefer, Department of Supply Chain Management, Arizona State University, Box 874706, Tempe, Arizona 85287-4706 [ don.keefer@asu.edu ].
Siting a Fire Station by Leveraging Soft Constraints and Supporting Science
Authors: Hewitt Richard L.
Published: January 2003

Gaining acceptance for the location of a new fire station depends on more than the minimization-of-response-time data. In this case, the technical solution took a back seat to political, interpersonal, and perception-based issues. Fourteen years ago I became a firefighter to learn how those issues affect the acceptance of a new location and, in the process, developed a fire-station-siting method that is still used today by the City and County of Denver. I did this work while I was a student in Gene Woolsey's operations research guild at the Colorado School of Mines.
STEP-UP: A Decision-Support System for Transforming the Dislocated US Defense Workforce
Authors: Vitolo Theresa M. , Vance Robert J.
Published: January 2003

We developed STEP-UP, a database-intensive, decision-support system for dislocated workers. We modeled the work positions at a micro- and macro-level and created tailored profiles for individuals to reflect prior positions, training, certifications, and interests. With the profile, career counselors matched employees to labor-market positions or identified training programs in growth industries. Also, giving the prospective employers an indication of the wealth of skilled employees, STEP-UP could provide client matches for job openings. We have continued to extend the capabilities of STEP-UP and offer it as a Web-based system. We expect that more decision support systems like STEP-UP will be developed for use in human resource decision-making situations.
People Skills Change Management Tools—Ideal State Analysis
Authors: Levasseur Robert E.
Published: January 2003

This is the second in a series of articles about some of the most effective models, methods, and processes of the OD trade. OD stands for organization development, a discipline that offers much to the OR/MS practitioner determined to help clients solve real-world problems. Because it is based on a systemic view of organizations, OD includes the whole universe of fuzzy people issues that increasingly determine the success or failure of efforts to implement otherwise flawless technical solutions.
A Decentralized, Smart Market Solution to a Class of Back-Haul Transportation Problems: Concept and Experimental Test Beds
Authors: Brewer Paul J. , Plott Charles R.
Published: January 2003

Back-haul problems occur in many areas of transportation. One-way rental often takes equipment, such as cases and containers, from an area of high demand to an area of low demand. The problem is to return the equipment to the location of need, a problem typically viewed as an administrative and scheduling problem. We developed a decentralized approach in which a specially designed market organizes competition and information to minimize the cost of back-hauls without the direct intervention of administrative negotiations or command-and-control types of scheduling. We employed laboratory experimental methods to test the concept, examine its performance against theoretical benchmarks, and explore its limitations.
The First Use of a Combined-Value Auction for Transportation Services
Authors: Ledyard John O. , Olson Mark , Porter David , Swanson Joseph A. , Torma David P.
Published: January 2003

Combined-value auctions (CVAs) allow participants to make an offer of a single amount for a collection of items. These auctions provide value to both buyers and sellers of goods or services in a number of environments, but they have rarely been implemented, perhaps because of lack of knowledge and experience. Sears Logistics Services (SLS) is the first procurer of trucking services to use a CVA to reduce its costs. In 1993, it saved 13 percent over past procurement practices. Experimental economics played a crucial role in the development, sale, and use of the CVA.
Micromotives in Global Environmental Policy
Authors: Shogren Jason F.
Published: January 2003

Protecting ourselves cost-effectively from such global environmental threats as climate change requires a good understanding of the behavioral underpinnings that drive choice under risk and uncertainty, lead to the design of efficient and effective protocols for cooperative action across nations, and create incentives for different control strategies within nations. Researchers can use experimental economic methods to gain insight into these micromotives of climate policy by testing the robustness of theoretical predictions, and by recognizing new patterns of choice. Experiments can be used to sharpen the best guesses guiding policy by identifying how decision makers can try to get more environmental progress at less cost by accounting for the relevant determinants of behavior.
Minimum Advertised-Price Policy Rules and Retailer Behavior: An Experiment by Hewlett-Packard
Authors: Charness Gary , Chen Kay-Yut
Published: January 2003

We tested the effects of various policy rules on retailer behavior in laboratory experiments conducted at Hewlett-Packard Laboratories. Our experimental design models the multifaceted contemporary market for consumer computer products and is quite complex, but we found that participants can make effective decisions and that their behavior is sensitive to variations in policies. Based on our results, Hewlett-Packard changed its policies; for example, it made the consequences for violations forward looking as well as backward looking. This line of research appears promising for complex industrial environments.
Experimental Economics and Supply-Chain Management
Authors: Croson Rachel , Donohue Karen
Published: January 2003

One area in which experimental economics methods have been used to study operations problems is supply-chain management. We survey results from a series of human experiments based on the popular beer distribution game and find cognitive limitations on the part of managers, in particular an underweighting of the supply line. We suggest mechanisms that may alleviate this bias, including sharing inventory and point-of-sale data, and reducing ordering and shipping delays. Our research provides managerial lessons and identifies supply-chain issues that need further experimental study.
Practice Abstracts
Authors: Keefer Donald L. , Kumar Subodha , Ramanan Natarajan , Sriskandarajah Chelliah
Published: January 2003

Practice Abstracts carries short reports of specific current or recent OR/MS projects. Often these reports are based on existing documents, such as internal reports or company newsletters. We hope that these abstracts will be accessible, interesting, and valuable to practitioners in other organizations. Contributions should be sent for evaluation to the editor of “Practice Abstracts,” Donald L. Keefer, Department of Supply Chain Management, Arizona State University, Box 874706, Tempe, Arizona 85287-4706 [don.keefer@asu.edu].
College Football Rankings: Do the Computers Know Best?
Authors: Martinich Joseph
Published: January 2003

The bowl-championship-series (BCS) committee uses 10 ranking schemes, including eight computer rankings, to select college football teams for bowl-championship-series bowl games, including the national championship game. The large financial benefits of participating in BCS bowl games make it imperative that the selection process accurately select the best teams. I evaluated the performance of the 10 ranking schemes the BCS committee used during the 1999 and 2000 seasons to select bowl teams. I found that almost all are equally accurate, but the Seattle Times scheme clearly underperforms the others. In addition, two proposed changes to the BCS selection formula, (1) to prohibit computer ranking schemes from considering the margin of victory in their rankings, and (2) to include explicitly the outcomes of head-to-head games among teams being considered for BCS bowls, could do more harm than good and could decrease the likelihood of the committee selecting the best teams for the BCS bowls.
Measuring e-Commerce in Net-Enabled Organizations: An Introduction to the Special Issue
Authors: Straub Detmar W. , Hoffman Donna L. , Weber Bruce W. , Steinfield Charles
Published: January 2003

Clear and precise metrics are essential for evaluating phenomena such as e-commerce (“Net”-enablement) and the organizational use of networks and the Internet for commercial activities. Researchers require them for theory building and testing; practitioners require them for improving organizational processes. But for IS professionals to engage in the serious creation of metrics, it is critical to recognize:(1) that the phenomenon of net-enablement is an enduring change, probably led in the future by “brick-cum-click”firms, (2) that some new and old measures need to be differentially applied, and (3) that the papers in this special issue are not the end of metrics creation, but just the beginning.
NEBIC: A Dynamic Capabilities Theory for Assessing Net-Enablement
Authors: Wheeler Bradley C.
Published: January 2003

We propose the Net-Enabled Business Innovation Cycle (NEBIC) as an applied dynamic capabilities theory for measuring, predicting, and understanding a firm's ability to create customer value through the business use of digital networks. The theory incorporates both a variance and process view of net-enabled business innovation. It identifies four sequenced constructs: Choosing new IT, Matching Economic Opportunities with technology, Executing Business Innovation for Growth, and Assessing Customer Value, along with the processes and events that interrelate them as a cycle. The sequence of these theorized relationships for net-enablement (NE)1asserts that choosing IT precedes rather than aligns with corporate strategy. The theory offers a logically consistent and falsifiable basis for grounding research programs on metrics of net-enabled business innovation.
The Net-Enabled Business Innovation Cycle and the Evolution of Dynamic Capabilities
Authors: Zahra Shaker A. , George Gerard
Published: January 2003

Wheeler's Net-Enabled Business Innovation Cycle (NEBIC) integrates IS and strategy research to offer an interesting and timely perspective on value creation. We extend Wheeler's theoretical propositions, highlighting the interplay between strategy, IS, and entrepreneurship in a quest for competitive advantage. This interplay is crucial to the creation of the dynamic capabilities that enable companies to gain an advantage through NEBIC. The importance of opportunity recognition and absorptive capacity in bringing about the changes that make NEBIC viable is also highlighted.
Web Site Usability, Design, and Performance Metrics
Authors: Palmer Jonathan W.
Published: January 2003

Web sites provide the key interface for consumer use of the Internet. This research reports on a series of three studies that developand validate Web site usability, design and performance metrics, including download delay, navigability, site content, interactivity, and responsiveness. The performance metric that was developed includes the subconstructs user satisfaction, the likelihood of return, and the frequency of use.

Data was collected in 1997, 1999, and 2000 from corporate Web sites via three methods, namely, a jury, third-party ratings, and a software agent. Significant associations between Web site design elements and Web site performance indicate that the constructs demonstrate good nomological validity. Together, the three studies provide a set of measures with acceptable validity and reliability. The findings also suggest lack of significant common methods biases across the jury-collected data, third-party data, and agent-collected data.

Results suggest that Web site success is a first-order construct. Moreover, Web site success is significantly associated with Web site download delay (speed of access and display rate within the Web site), navigation (organization, arrangement, layout, and sequencing), content (amount and variety of product information), interactivity (customization and interactivity), and responsiveness (feedback options and FAQs).
Assessing a Firm's Web Presence: A Heuristic Evaluation Procedure for the Measurement of Usability
Authors: Agarwal Ritu , Venkatesh Viswanath
Published: January 2003

Web site usability is a critical metric for assessing the quality of a firm's Web presence. A measure of usability must not only provide a global rating for a specific Web site, ideally it should also illuminate specific strengths and weaknesses associated with site design. In this paper, we describe a heuristic evaluation procedure for examining the usability of Web sites. The procedure utilizes a comprehensive set of usability guidelines developed by Microsoft.

We present the categories and subcategories comprising these guidelines, and 7discuss the development of an instrument that operationalizes the measurement of usability. The proposed instrument was tested in a heuristic evaluation study where 1,475 users rated multiple Web sites from four different industry sectors: airlines, online bookstores, automobile manufacturers, and car rental agencies. To enhance the external validity of the study, users were asked to assume the role of a consumer or an investor when assessing usability. Empirical results suggest that the evaluation procedure, the instrument, as well as the usability metric exhibit good properties. Implications of the findings for researchers, for Web site designers, and for heuristic evaluation methods in usability testing are offered.
Measuring Factors that Influence the Success of Internet Commerce
Authors: Torkzadeh Gholamreza , Dhillon Gurpreet
Published: January 2003

Efforts to develop measures of Internet commerce success have been hampered by (1) the rapid development and use of Internet technologies and (2) the lack of conceptual bases necessary to develop success measures. In a recent study, Keeney (1999) proposed two sets of variables labeled as means objectives and fundamental objectives that influence Internet shopping. Means objectives, he argues, help businesses achieve what is important for their customers—fundamental objectives. Based on Keeney's work, this paper describes the development of two instruments that together measure the factors that influence Internet commerce success. One instrument measures the means objectives that influence online purchase (e.g., Internet vendor trust) and the other measures the fundamental objectives that customers perceive to be important for Internet commerce (e.g., Internet product value). In phase one of the instrument development process, we generated 125 items for means and fundamental objectives. Using a sample of 199 responses by individuals with Internet shopping experience, these constructs were examined for reliability and validity. The Phase 1 results suggested a 4-factor, 21-item instrument to measure means objectives and a 4-factor, 17-item instrument to measure fundamental objectives. In Phase 2 of the instrument development process, we gathered a sample of 421 responses to further explore the 2 instruments. With minor modifications, the Phase 2 data support the 2 models. The Phase 2 results suggest a 5-factor, 21-item instrument that measures means objectives in terms of Internet product choice, online payment, Internet vendor trust, shopping travel, and Internet shipping errors. Results also suggest a 4-factor, 16-item instrument that measures fundamental objectives in terms of Internet shopping convenience, Internet ecology, Internet customer relation, and Internet product value. Evidence of reliability and discriminant, construct, and content validity is presented for the hypothesized measurement models. The paper concludes with discussions on the usefulness of these measures and future research ideas.
Applying the Technology Acceptance Model and Flow Theory to Online Consumer Behavior
Authors: Koufaris Marios
Published: January 2003

In this study, we consider the online consumer as both a shopper and a computer user. We test constructs from information systems (Technology Acceptance Model), marketing (Consumer Behavior), and psychology (Flow and Environmental Psychology) in an integrated theoretical framework of online consumer behavior. Specifically, we examine how emotional and cognitive responses to visiting a Web-based store for the first time can influence online consumers' intention to return and their likelihood to make unplanned purchases. The instrumentation shows reasonably good measurement properties and the constructs are validated as a nomological network.

A questionnaire-based empirical study is used to test this nomological network. Results confirm the double identity of the online consumer as a shopper and a computer user because both shopping enjoyment and perceived usefulness of the site strongly predict intention to return. Our results on unplanned purchases are not conclusive. We also test some individual and Web site factors that can affect the consumer's emotional and cognitive responses. Product involvement, Web skills, challenges, and use of value-added search mechanisms all have a significant impact on the Web consumer. The study provides a more rounded, albeit partial, view of the online consumer and is a significant steptowards a better understanding of consumer behavior on the Web. The validated metrics should be of use to researchers and practitioners alike.
Toward New Metrics for Net-Enhanced Organizations
Authors: Straub Detmar W. , Hoffman Donna L. , Weber Bruce W. , Steinfield Charles
Published: January 2003

Metrics are sine qua non for solid research, and scientific metrics have now been advanced with new approaches in the arena of Net-enablement (NE), otherwise known as e-commerce. Questions that likely require additional attention include: (1) Where/what is the real value in substituting information for physical processes?, (2) which NE systems effectively support end-to-end fulfillment?, and (3) when should a Net-enabled organization share information? With respect to extant studies in Net-enhancement, the field has been advanced in three methodological dimensions. Multiple methods have been used to validate measures. Approaches to metrics using archival/secondary data have also been initiated. Finally, strong external validity has been established through large scale data gathering.
Businesses as Buildings: Metrics for the Architectural Quality of Internet Businesses
Authors: Kim Jinwoo , Lee Jungwon , Han Kwanghee , Lee Moonkyu
Published: January 2003

Metrics for the architectural quality of Internet businesses are essential in gauging the success and failure of e-commerce. This study proposes six dimensions of architectural metrics for Internet businesses: internal stability, external security, information gathering, order processing, system interface, and communication interface. The metrics are based on the three constructs that have been used to evaluate buildings in the real world. The structural construct indicates that Internet businesses need to be stable internally and secure externally. The functional construct implies that Internet businesses should provide convenient functions in the information-gathering and order-processing phases. Finally, the representational construct indicates that they need to provide a pleasant interface both to the systemand to those using it. For each of the six metrics, we have constructed questionnaires to measure the perceived level of architectural quality and identified feature lists that may be closely related to the perceived quality level. Large-scale empirical studies were conducted both to validate the proposed metrics and to explore their relevance across four Internet business domains. The validity of the metrics has been obtained in three ways. First, the content validity of the metrics was assured by pretests and pilot survey. Second, the results from the confirmatory factor analysis showed that the metrics had high convergent and discriminant validities. Finally, the reliability coefficients were found to be high enough to establish the reliability of the proposed metrics. The relevance of the metrics has been explored in two ways. Structural equation models were used to test the causal relations between the three constructs and user satisfaction, as well as customer loyalty, in four domains. Correlation analyses were used to explore the relations between the perceived architectural quality and objective design features in four domains. This paper ends with the implications and limitations of the study results.
Measuring Switching Costs and the Determinants of Customer Retention in Internet-Enabled Businesses: A Study of the Online Brokerage Industry
Authors: Chen Pei-Yu (Sharon) , Hitt Lorin M.
Published: January 2003

The ability to retain and lock in customers in the face of competition is a major concern for online businesses, especially those that invest heavily in advertising and customer acquisition. In this paper, we develop and implement an approach for measuring the magnitudes of switching costs and brand loyalty for online service providers based on the random utility modeling framework. We then examine how systems usage, service design, and other firm and individual-level factors affect switching and retention. Using data on the online brokerage industry, we find significant variation (as much as a factor of two) in measured switching costs. We find that customer demographic characteristics have little effect on switching, but that systems usage measures and systems quality are associated with reduced switching. We also find that firm characteristics such as product line breadth and quality reduce switching and may also reduce customer attrition. Overall, we conclude that online brokerage firms appear to have different abilities in retaining customers and have considerable control over their switching costs.
e-Commerce Metrics for Net-Enhanced Organizations: Assessing the Value of e-Commerce to Firm Performance in the Manufacturing Sector
Authors: Zhu Kevin , Kraemer Kenneth L.
Published: January 2003

In this study, we developed a set of constructs to measure e-commerce capability in Internet-enhanced organizations. The e-commerce capability metrics consist of four dimensions: information, transaction, customization, and supplier connection. These measures were empirically validated for reliability, content, and construct validity. Then we examined the nomological validity of these e-commerce metrics in terms of their relationships to firm performance, with data from 260 manufacturing companies divided into high IT-intensity and low IT-intensity sectors. Grounded in the dynamic capabilities perspective and the resource-based theory of the firm, a series of hypotheses were developed. After controlling for variations of industry effects and firm size, our empirical analysis found a significant relationship between e-commerce capability and some measures of firm performance (e.g., inventory turnover), indicating that the proposed metrics have demonstrated value for capturing e-commerce effects. However, our analysis showed that e-commerce tends to be associated with the increased cost of goods sold for traditional manufacturing companies, but there is an opposite relationship for technology companies. This result seems to highlight the role of resource complementarity for the business value of e-commerce—traditional companies need enhanced alignment between e-commerce capability and their existing IT infrastructure to reap the benefits of e-commerce.
The Measurement of Web-Customer Satisfaction: An Expectation and Disconfirmation Approach
Authors: McKinney Vicki , Yoon Kanghyun , Zahedi Fatemeh “Mariam”
Published: January 2003

Online shopping provides convenience to Web shoppers, yet its electronic format changes information-gathering methods traditionally used by customers. This change raises questions concerning customer satisfaction with the online purchasing process. Web shopping involves a number of phases, including the information phase, in which customers search for information regarding their intended purchases. The purpose of this paper is to develop theoretically justifiable constructs for measuring Web-customer satisfaction during the information phase.

By synthesizing the expectation-disconfirmation paradigm with empirical theories in user satisfaction, we separate Web site quality into information quality (IQ) and system quality (SQ), and propose nine key constructs for Web-customer satisfaction. The measurements for these constructs are developed and tested in a two-phase study. In the first phase, the IQ and SQ dimensions are identified, and instruments for measuring them are developed and tested. In the second phase, using the salient dimensions of Web-IQ and Web-SQ as the basis for formulating first-order factors, we develop and empirically test instruments for measuring IQ and SQ-satisfaction. Moreover, this phase involves the design and test of second-order factors for measuring Web-customer expectations, disconfirmation, and perceived performance regarding IQ and SQ. The analysis of the measurement model indicates that the proposed metrics have a relatively high degree of validity and reliability. The results of the study provide reliable instruments for operationalizing the key constructs in the analysis of Web-customer satisfaction within the expectation-disconfirmation paradigm.
Antecedents of B2C Channel Satisfaction and Preference: Validating e-Commerce Metrics
Authors: Devaraj Sarv , Fan Ming , Kohli Rajiv
Published: January 2003

Although electronic commerce (EC) has created new opportunities for businesses as well as consumers, questions about consumer attitudes toward Business-to-Consumer (B2C) e-commerce vis-à-vis the conventional shopping channels continue to persist. This paper reports results of a study that measured consumer satisfaction with the EC channel through constructs prescribed by three established frameworks, namely the Technology Acceptance Model (TAM), Transaction Cost Analysis (TCA), and Service Quality (SERVQUAL). Subjects purchased similar products through conventional as well as EC channels and reported their experiences in a survey after each transaction. Using constructs from the three frameworks, a model was constructed and tested to examine the determinants of the EC channel satisfaction and preference using the survey data.

Structural equation model analyses indicate that metrics tested through each model provide a statistically significant explanation of the variation in the EC consumers' satisfaction and channel preference. The study found that TAM components—perceived ease of use and usefulness—are important in forming consumer attitudes and satisfaction with the EC channel. Ease of use also was found to be a signi.cant determinant of satisfaction in TCA. The study found empirical support for the assurance dimension of SERVQUAL as determinant in EC channel satisfaction. Further, the study also found general support for consumer satisfaction as a determinant of channel preference.
Developing and Validating Trust Measures for e-Commerce: An Integrative Typology
Authors: McKnight D. Harrison , Choudhury Vivek , Kacmar Charles
Published: January 2003

Evidence suggests that consumers often hesitate to transact with Web-based vendors because of uncertainty about vendor behavior or the perceived risk of having personal information stolen by hackers. Trust plays a central role in helping consumers overcome perceptions of risk and insecurity. Trust makes consumers comfortable sharing personal information, making purchases, and acting on Web vendor advice—behaviors essential to widespread adoption of e-commerce. Therefore, trust is critical to both researchers and practitioners. Prior research on e-commerce trust has used diverse, incomplete, and inconsistent definitions of trust, making it difficult to compare results across studies. This paper contributes by proposing and validating measures for a multidisciplinary, multidimensional model of trust in e-commerce. The model includes four high-level constructs—disposition to trust, institution-based trust, trusting beliefs, and trusting intentions—which are further delineated into 16 measurable, literature-grounded subconstructs. The psychometric properties of the measures are demonstrated through use of a hypothetical, legal advice Web site. The results show that trust is indeed a multidimensional concept. Proposed relationships among the trust constructs are tested (for internal nomological validity), as are relationships between the trust constructs and three other e-commerce constructs (for external nomological validity), as Web experience, personal innovativeness, and Web site quality. Suggestions for future research as well as implications for practice are discussed.
Reputation in Marketing Channels: Repeated-Transactions Bargaining with Two-Sided Uncertainty
Authors: Banks Darryl T. , Hutchinson J. Wesley , Meyer Robert J.
Published: January 2003

Marketing channel interactions typically feature three characteristics that have not been incorporated together in an analytic study: (1) the parties can do business repeatedly over time, often under different terms of trade (e.g., prices may vary), (2) the terms that the seller offers one buyer may be different from those she offers another, giving each interaction the flavor of bilateral monopoly bargaining, and (3) the buyer and seller come to the interaction uncertain about the valuations each holds for the good, but they do know each other's reputation for valuation. The seller might, for example, come to the bargaining table aware that the buyer has a strong reputation for being willing to pay only low prices, and the buyer might come aware that the seller is strongly reputed for high cost and is, therefore, willing to offer only high prices.

The latter characteristic raises an interesting question: When engaged in a marketing channel interaction, what type of reputation is best for a buyer or seller to take to the bargaining table? In this paper, we answer that question by incorporating each of the characteristics that typify channel interactions in a formal game-theoretic bargaining model. We determine how the reputations that buyers and sellers bring to the bargaining table affect their equilibrium strategies and payoffs.

Our analysis shows that, in general, the best reputation for the seller to take to the bargaining table is one that makes the buyer nearly certain in his belief that the seller's cost is high, a result that matches intuition. The best reputation for the buyer, however, is counterintuitive. We show that an increase in the buyer's reputed willingness to pay can actually cause the seller to offer a lower price. The best reputation for the buyer to take to the bargaining table is, therefore, one that makes the seller believe that there is a significant chance that he is willing to pay a high price. This result is new to the literature and brings with it immediate managerial implications that we discuss. Our analysis also shows that modeling the buyer as a forward-looking strategic player yields different results than does following the normal convention of modeling the buyer as a nonstrategic price-taker. We discuss why future research on channels and on reference-dependent utility theory should consider these differences.
Fast-Track: Article Using Advance Purchase Orders to Forecast New Product Sales
Authors: Moe Wendy W. , Fader Peter S.
Published: January 2003

Marketers have long struggled with developing forecasts for new products before their launch. We focus on one data source—advance purchase orders—that has been available to retailers for many years but has rarely been tied together with postlaunch sales data. We put forth a duration model that incorporates the basic concepts of new product diffusion, using a mixture of two distributions: one representing the behavior of innovators (i.e., those who place advance orders) and one representing the behavior of followers (i.e., those who wait for the mass market to emerge). The resulting mixed-Weibull model specification can accommodate a wide variety of possible sales patterns. This flexibility is what makes the model well-suited for an experiential product category (e.g., movies, music, etc.) in which we frequently observe very different sales diffusion patterns, ranging from a rapid exponential decline (which is most typical) to a gradual buildup characteristic of “sleeper” products. We incorporate product-specific covariates and use hierarchical Bayes methods to link the two customer segments together while accommodating heterogeneity across products. We find that this model fits a variety of sales patterns far better than do a pair of benchmark models. More importantly, we demonstrate the ability to forecast new album sales before the actual launch of the album, based only on the pattern of advance orders.
In Search of Data: An Editorial
Authors: Shugan Steven M.
Published: January 2003

We argue that: (1) whether articles contain numeric data should be irrelevant to the evaluation process; (2) the desirability of numeric real, numeric synthetic, or nonnumeric data depends on the research objective; (3) assumptions can and should sometimes substitute for additional data; and (4) equal scrutiny should be given to data collection procedures, regardless of whether the researcher influences the collection or not. Finally, rather than focusing on data, evaluation of research should focus on whether the research provides compelling evidence for the conclusions.
Positioning of Store Brands
Authors: Sayman Serdar , Hoch Stephen J. , Raju Jagmohan S.
Published: January 2003

We examine the retailer's store brand positioning problem. Our game-theoretic model helps us identify a set of conditions under which the optimal strategy for the retailer is to position the store brand as close as possible to the stronger national brand. In three empirical studies, we examined whether market data are consistent with some of the implications of our model. In the first study, using observational data from two US supermarket chains, we found that store brands are more likely to target stronger national brands. Our second study estimated cross-price effects in 19 product categories, and found that only in categories with high-quality store brands, store brand and the leading national brand compete more intensely with each other than with the secondary national brand. In a third product perception study, we found that although explicit targeting by store brands influenced consumer perceptions of physical similarity, it had no influence on consumers' perceptions of overall or product quality similarity. While it appears that retailers do follow a positioning strategy consistent with our model, it changes buying behavior in the intended fashion only if the store brand offers quality comparable to the leading national brands.
How Much Does the Market Value an Improvement in a Product Attribute?
Authors: Ofek Elie , Srinivasan V.
Published: January 2003

A firm contemplating improvements to its product attributes would be interested in the dollar value the market attaches to any potential product modification. In this paper, we derive a measure of market value such that the comparison of the measure against the incremental unit cost of the attribute improvement is key in deciding whether or not the attribute improvement is profitable. Competition from other brands, the potential for market expansion, and heterogeneity in customer preference structures are explicitly modeled using the multinomial logit framework. The analysis yields a closed form expression for the market's value for an attribute improvement (MVAI). A key result we obtain is that customers should be differentially weighted based on their probability of purchasing the firm's product. In particular, customers who exhibit a very high or very low probability of choosing the firm's product should receive less weight in detemining MVAI. Because the probability of choice varies across products, the answer to the question of how much the market values an improvement depends on which firm is asking the question. It is shown that customers whose utilities have a greater random component should be weighted less. Furthermore, the measure developed is robust to the influence of outliers in the sample. An empirical illustration of the MVAI measure in the context of a new product development study is provided. The study illustrates the advantages of the proposed measure over currently used approaches and explores the possibility of competitive price reactions.
Referral Infomediaries
Authors: Chen Yuxin , Iyer Ganesh , Padmanabhan V.
Published: January 2003

An interesting phenomenon has been the emergence of “infomediaries” in the form of Internet referral services in many markets. These services offer consumers the opportunity to get price quotes from enrolled brick-and-mortar retailers and direct consumer traffic to particular retailers who join them. This paper analyzes the effect of referral infomediaries on retail markets and examines the contractual arrangements that they should use in selling their services. We identify the conditions necessary for the infomediary to exist and explain how they would evolve with the growth of the Internet. The role of an infomediary as a price discrimination mechanism leads to lower online prices. Perhaps the most interesting result is that the referral infomediary can unravel (i.e., no retailer can get any net profit gain from joining) when its reach becomes too large. The analysis also shows why referral infomediaries would prefer to offer geographical exclusivity to joining retailers.
An Improved Batch Means Procedure for Simulation Output Analysis
Authors: Steiger Natalie M. , Wilson James R.
Published: January 2003

We formulate and evaluate the Automated Simulation Analysis Procedure (ASAP), an algorithm for steady-state simulation output analysis based on the method of nonover-lapping batch means (NOBM). ASAP delivers a confidence interval for an expected response that is centered on the sample mean of a portion of a simulation-generated time series and satisfies a user-specified absolute or relative precision requirement. ASAP operates as follows: The batch size is progressively increased until either (a) the batch means pass the von Neumann test for independence, and then ASAP delivers a classical NOBM confidence interval; or (b) the batch means pass the Shapiro-Wilk test for multivariate normality, and then ASAP delivers a correlation-adjusted confidence interval. The latter adjustment is based on an inverted Cornish-Fisher expansion for the classical NOBM t-ratio, where the terms of the expansion are estimated via an autoregressive-moving average time series model of the batch means. After determining the batch size and confidence-interval type, ASAP sequentially increases the number of batches until the precision requirement is satisfied. An extensive experimental study demonstrates the performance improvements achieved by ASAP versus well-known batch means procedures, especially in confidence-interval coverage probability.
Investment, Capital Structure, and Complementarities Between Debt and New Equity
Authors: Stenbacka Rune , Tombak Mihkel
Published: January 2003

We study simultaneous investment and financing decisions made by incumbent owners in the presence of capital market imperfections. We present a theory for how the optimal combination of debt and equity financing depends on the firm's internal funds. We identify complementarities between the two financial instruments. We test these predictions empirically with panel data on 3,119 corporations in the COMPUSTAT database. Our estimates using instrumental variable techniques support our theoretical predictions regarding the link between internal funds and capital investments, as well as the interaction effects between debt and new equity. We explore implications for managers, financiers, and policy makers.