scholarly journals Sourcing for Quality: Cooperating with a Single Supplier or Developing Two Competing Suppliers?

2016 ◽  
Vol 2016 ◽  
pp. 1-13 ◽  
Author(s):  
Jingxian Chen
Keyword(s):  
Product Quality ◽  
Critical Role ◽  
Dominant Strategy ◽  
Noncooperative Game ◽  
Quality Level ◽  
Equilibrium Solutions ◽  
Dual Sourcing ◽  
Sourcing Strategy ◽  
Equilibrium Profiles ◽  
Quality Investment

Supplier efforts regarding product quality are an important issue in outsourcing and play a critical role in a manufacturer’s choice of sourcing strategy. Consider a manufacturer that wants to outsource the manufacturing of two substitute products to external suppliers. This paper studies the strategic interactions under two sourcing strategies: single and dual sourcing. A four-stage noncooperative game model is established to describe each member’s decisions. We further propose four decision scenarios: single sourcing with and without manufacturer quality investment sharing and dual sourcing when suppliers cooperate or do not cooperate on quality decisions. By the backward induction approach, we obtain analytical equilibrium solutions for each decision scenario. By comparing each pair of equilibrium profiles, we find that an appropriate proportion of quality investment sharing by the manufacturer can enable a cooperating strategy with a single supplier to be the dominant strategy. When the manufacturer does not want to share or does not want to share a relatively large portion of its supplier’s quality investment, it will always prefer to develop two competing suppliers when the cost of dual sourcing is sufficiently low. However, dual sourcing can be extremely risky for the manufacturer because the suppliers could provide a relatively low product quality level by cooperating on the quality decision to extract the manufacturer’s profit.

Strategic sourcing under recall loss sharing and product quality investment

2020 ◽  
Vol 54 (4) ◽  
pp. 1133-1160
Author(s):  
Binwei Dong ◽  
Wansheng Tang ◽  
Chi Zhou
Keyword(s):  
Product Quality ◽  
Wholesale Price ◽  
Optimal Choice ◽  
Product Recall ◽  
Dual Sourcing ◽  
Investment Level ◽  
Sourcing Strategy ◽  
Practical Operation ◽  
Single Sourcing ◽  
Operation Risk

Product recall has been a widespread practical operation risk in the production outsourcing. To remit even avoid product recall risk, this paper considers a two-echelon supply chain where the original equipment manufacturer (OEM) orders a critical component from one or two contract manufacturers (CMs) and uses it to produce finished product with potential quality defect. The CMs can decide investment level to reduce defect possibility and share recall loss with the OEM once product recall is implemented. When the recall loss sharing rate is fixed, the OEM may adopt the single sourcing strategy or the dual sourcing strategy which depends on the recall loss sharing rate. Moreover, if the sharing rate is relatively small, the single sourcing strategy is an optimal choice for the OEM. However, when the recall loss sharing rate is determined by the OEM, she prefers to adopt the dual sourcing strategy. Meanwhile, an increase of the recall loss sharing rate may not force the CM to improve product quality. By the numerical analysis, if the marginal recall loss is large or the wholesale price is relatively small, the OEM and the CMs can reach a win-win scenario. Finally, we examine an extension in which the CMs have pricing ability on wholesale price, and the result shows that the OEM can not obtain a cost-reduction benefit under the dual sourcing strategy.

scholarly journals Directions for Improving the Quality of Products of PJSC «Beer and Non-Alcoholic Plant «Radomyshl»

2020 ◽  
Vol 10 (513) ◽  
pp. 197-203
Author(s):  
O. I. Garafonova ◽  
◽  
I. F. Nechai ◽  
Keyword(s):  
Product Quality ◽  
Product Life Cycle ◽  
Quality Parameters ◽  
Quality Level ◽  
Business Organization ◽  
High Quality ◽  
The World ◽  
Developing Directions ◽  
Quality Of Products

In the world, product quality has long been one of the major instruments for ensuring the economic development of companies. Achieving high quality parameters, in turn, is an important part of the economic strategy of any success-oriented business organization. The article is aimed at developing directions for improving products of PJSC «Beer and Non-Alcoholic Plant «Radomyshl». The object of the research is the quality of beer produced by PJSC «Beer and Non-Alcoholic Plant «Radomyshl». The assessment of the quality level of the selected product in accordance with the requirements of DSTU 3888:2015 was carried out using the following groups of indicators: microbiological, organoleptic and physic-chemical. The process of assessing the product quality parameters is presented, which consists of seven consecutive stages and is carried out throughout the product life cycle. The factors under the influence of which the quality of products are formed and which may cause deviation from the specified quality parameters are analyzed and structured. The defects that appear due to these factors have been identified. The basis for improving the quality of products is primarily a thorough study of changes in demand for the business organization products. Three groups of measures are singled out, with the help of which one can achieve the desired level of product quality, namely: technological, organizational and socio-economic. A complex of priority measures to improve the quality of products of PJSC «Beer and Non-Alcoholic Plant «Radomyshl» is proposed. The element of scientific novelty is the development of an algorithm for the implementation of measures to improve the quality of products. During the implementation of measures to improve the quality, it is necessary to carry out systematic monitoring and generate reports on the implementation of the project in order to make possible an adjustment of the final result.

Integrated maintenance and production decision fork-out-of-nsystem equipment with attenuation of product quality

2019 ◽  
Vol 36 (5) ◽  
pp. 735-751 ◽  
Author(s):  
Shao Xiao ◽  
Zhixiang Chen ◽  
Bhaba R. Sarker
Keyword(s):  
Product Quality ◽  
Low Cost ◽  
Uncertain Demand ◽  
Quality Level ◽  
Equipment Maintenance ◽  
High Quality ◽  
Content Type ◽  
Equipment Reliability ◽  
The Impact ◽  
Production Decision

PurposeEquipment reliability significantly impacts productivity, and in order to obtain high equipment reliability and productivity, maintenance and production decision should be made simultaneously to keep manufacturing system healthy. The purpose of this paper is to investigate the joint optimization of equipment maintenance and production decision fork-out-of-nsystem equipment with attenuation of product quality and to explore the impact of maintenance on the production and cost control for manufacturers.Design/methodology/approachA multi-period Markov chain model fork-out-of-nsystem equipment is set up based on the assumption that the deterioration of equipment is a pure birth process. Then, the maintenance cost, setup cost, inventory holding cost, shortage cost, production cost and the quality cost are analyzed with the uncertain demand and the attenuation of product quality stemmed from equipment deterioration. The total lowest cost per unit time and its specific calculation method are presented. Finally, the robustness and flexibility of the method are verified by a numerical example and the effects of equipment deterioration intensity and attenuation of product quality are analyzed.FindingsThe result shows that the joint decision model could not only satisfy the uncertain demand with low cost and strong robustness but also make the output products high quality level. In addition, the attenuation of product quality would influence the equipment maintenance and production decision and leads to the production waste and increases the operation cost greatly.Originality/valueImplications derived from this study can help production maintenance managers and reliability engineers adequately select maintenance policy to improve the equipment efficiency and productivity with high quality level at a relatively low cost.

scholarly journals How to operate physical showrooms: Service decision and pricing based on product quality

2021 ◽  
Author(s):  
Chunxiang Guo ◽  
Yuyang Tan ◽  
Yue Tan
Keyword(s):  
Product Quality ◽  
Production Cost ◽  
Optimal Operation ◽  
Costs And Benefits ◽  
Equilibrium Solutions ◽  
Cost Coefficient ◽  
Joint Decisions ◽  
Purchase Behaviors ◽  
Endogenous Product Quality ◽  
Better Than

This paper addresses operation strategies of the physical showroom under e-commerce, and studies joint decisions of the showroom service and pricing based on product quality. First, we propose an analytical model to capture the feature of consumer purchase behaviors and model three operation strategies of the physical showroom: the cooperation operation (CO), the manufacturer operation (MO), and the e-retailer operation (RO). Then, the equilibrium solutions in the above three strategies are obtained based on product quality, and the optimal operation strategy is analyzed. Besides, we extend the model to the scenario of endogenous product quality. The results are as follows. First, in contrast to the conventional wisdom, we find that the optimal showroom service may decrease with product quality when the production cost coefficient is high. Second, the results illustrate that enterprises should consider both product quality and production cost before opening physical showrooms. When the production cost coefficient is low, both the MO strategy and the RO strategy are better than the CO strategy, which means that the enterprise should open the physical showroom separately than jointly. However, when the production cost coefficient is high, the CO strategy provides the optimal showroom service. The enterprises in the supply chain should cooperate to balance costs and benefits. Besides, when product quality is endogenous, our analysis reveals that the RO strategy may offer better product quality than the CO strategy when the production cost coefficient is moderate.

scholarly journals Economic and Environmental Implications of Quality Choice under Remanufacturing Outsourcing

2020 ◽  
Vol 12 (3) ◽  
pp. 874 ◽  
Author(s):  
Wei He ◽  
Lan Liang ◽  
Kai Wang
Keyword(s):  
Life Cycle ◽  
Product Quality ◽  
New Products ◽  
Quality Level ◽  
Economic Perspective ◽  
Environmental Implications ◽  
Environmental Friendly ◽  
Quality Choice ◽  
Original Equipment Manufacturers ◽  
Environment Performance

Although many studies have recently investigated how the product quality impacts on economic and environment performance under remanufacturing, all of them assume that remanufacturing operations are undertaken by the original equipment manufacturers (OEMs) or independent remanufacturers (IRs). However, many OEMs such as Lexmark, Canon, and Epson filed lawsuits with those IRs without licensing, but outsourced the remanufacturing operations to several contracted remanufacturers (CRs). We therefore extend the prior research to investigate the economic and environmental implications of OEMs’ strategic desired quality level choices under remanufacturing outsourcing. That is, we develop two models corresponding to two scenarios where OEMs (1) undertake remanufacturing in-house or (2) outsource it to a CR. Our results show that, to create a less intense cannibalization problem for new products sales, OEMs would be likely to choose a lower product quality when outsourcing remanufacturing to a CR. More importantly, from the economic perspective, we find that outsourcing remanufacturing to a CR hurts the OEM and the industry. However, from the environmental angle, our results reveal that there is a ratio threshold for environmental impact for different life cycle phases, above which remanufacturing in-house is definitely beneficial for OEM in economics and environment, but for the rest, outsourcing is equally or more environmental-friendly, despite cutting down the profit.

Product-Line Design in the Presence of Consumers’ Anticipated Regret

2020 ◽  
Vol 66 (12) ◽  
pp. 5665-5682 ◽  
Author(s):  
Tianxin Zou ◽  
Bo Zhou ◽  
Baojun Jiang
Keyword(s):  
Product Quality ◽  
Product Line ◽  
Quality Level ◽  
Purchase Decisions ◽  
Anticipated Regret ◽  
Product Line Design ◽  
Line Design ◽  
Quality Difference

Consumers are often uncertain about their valuations for product quality when choosing among different products and will learn their valuations only after buying and using a product. Some consumers may thus experience overpurchase or underpurchase regret, depending on whether they have purchased a higher- or lower-quality level than what they would have chosen had they known their true valuations. When consumers anticipate their potential postpurchase regret, their purchase decisions may be affected. Our analysis shows that overpurchase regret lowers the firm’s profit, but underpurchase regret can benefit the firm if consumers’ overpurchase regret is not strong. When the firm optimally designs its product line, the quality difference between its offerings will be larger (smaller) if consumers’ anticipated regret increases (reduces) its profit. Surprisingly, although anticipated regret tends to reduce consumers’ utility, in equilibrium, the presence of anticipated regret can increase consumers’ expected surplus. We further examine when the firm should allow consumers to return their products by paying a restocking fee and how the optimal restocking fee will change with consumers’ propensities for the two types of regret. We also experimentally show that consumers’ propensities of underpurchase and overpurchase regret are different and can be influenced by the firm’s messages. This paper was accepted by Juanjuan Zhang, marketing.

Sign in / Sign up

Export Citation Format

Share Document