Designing Sustainable Products Under Coproduction Technology

2020 ◽  
Vol 22 (6) ◽  
pp. 1181-1198
Author(s):  
Yen-Ting Lin ◽  
Haoying Sun ◽  
Shouqiang Wang
Keyword(s):  
Product Line ◽  
Problem Definition ◽  
Policy Implications ◽  
Raw Material ◽  
Sensitivity Analyses ◽  
Business Practices ◽  
Green Consumers ◽  
Sustainable Products ◽  
Environmental Value ◽  
Managerial Implications

Problem definition: A manufacturer takes raw material with an exogenous quality distribution to make a traditional product and a coproduct using material of quality above and below a well-established standard, respectively. The market consists of traditional consumers, who are only willing to pay for a product’s consumption value, and some environmentally conscious (i.e., green) consumers, who additionally value the product’s material conservation. In this context, we study the firm’s optimal design of its coproduct, that is, its quality and price decisions. Academic/practical relevance: Motivated by emerging conservation-oriented business practices exemplified by companies such as Taylor Guitars, our study informs resource-dependent firms whether and how to design their product line to leverage a coproduct’s environmental value. Our findings also yield important policy implications regarding the conservation of natural resources. Methodology: We formulate and solve the firm’s challenge as a constrained optimization problem, supplemented with extensive sensitivity analyses and robustness tests. Results: When the material cost is intermediate and consumers are not sufficiently green, the firm should position the coproduct without exploiting its environmental value. Otherwise, the firm should position the coproduct by extracting its environmental value from green consumers, in which case the firm may strategically abandon some traditional consumers by leaving their demand unfulfilled. Managerial implications: Quotas and taxation on material supply in general act as policy substitutes. A greener market may inadvertently result in higher resource consumption and waste. Quotas can mitigate such adverse effects.

On Designing a Socially Optimal Expedited Service and Its Impact on Individual Welfare

2021 ◽  
Author(s):  
Ricky Roet-Green ◽  
Aditya Shetty
Keyword(s):  
Social Welfare ◽  
Wait Time ◽  
Service Differentiation ◽  
Problem Definition ◽  
Policy Implications ◽  
Fixed Cost ◽  
Main Concern ◽  
Managerial Implications ◽  
Fixed Quantity ◽  
To Come

Problem definition: We consider the problem faced by a welfare-maximizing service provider who must make a decision on how to split a fixed quantity of resources between two variants of the service: a standard variant and an expedited variant. The service is mandatory, but customers can choose between the two variants. Choosing the expedited variant requires enrollment that incurs a fixed cost per period. Customers are strategic and have the same cost of waiting but are heterogeneous in the rate at which they use the service. Academic/practical relevance: The option of expedited security at U.S. airports (TSA PreCheck) is an instance where this problem arises. As has been the case with the PreCheck program, providers that offer expedited service may face criticism from customers, with the main concern being that the diversion of resources to expedited services increases wait time for regular customers. This has important policy implications for the provider, especially a government organization such as the TSA. Existing literature has focused on service differentiation as a means to maximize profit or overall social welfare, but its effect on individual customers has received little attention. Methodology: We find customer’s equilibrium decisions for any allocation choice made by the provider. Using the equilibrium result, we solve for the allocation choice that maximizes social welfare. Results: Even when customers behave strategically, an expedited service offered in parallel to a standard service cannot only increase overall welfare, but also do so for each customer individually. We also find that in a scenario where some customers lose out because of the expedited service, improving the efficiency of the expedited service is more effective than decreasing the enrollment cost to help those who are worse off. Managerial implications: The gains from offering expedited service do not have to come at the expense of regular customers. When they do, we provide recommendations for which decision levers are most effective at making the system fair.

A Responsive-Pricing Retailer Sourcing from Competing Suppliers Facing Disruptions

2021 ◽  
Author(s):  
Xi Shan ◽  
Tao Li ◽  
Suresh P. Sethi
Keyword(s):  
Low Cost ◽  
Geographic Location ◽  
Problem Definition ◽  
Production Costs ◽  
Sensitivity Analyses ◽  
Tier 2 ◽  
Product Price ◽  
Nash Game ◽  
Managerial Implications ◽  
Responsive Pricing

Problem definition: We study a problem of a retailer that orders from competing strategic suppliers subject to independent or correlated disruptions and responds by setting the retail price on delivery, called responsive pricing. The suppliers set their wholesale prices in a Nash game. Academic/practical relevance: Supplier disruption correlation exists for reasons such as product and service designs, geographic proximity, and common tier 2 suppliers. In practice, many retailers are able to set the product price after knowing the delivered quantity. Methodology: We model this problem as a Stackelberg–Nash game with the suppliers as the leaders and the retailer as the follower and obtain its equilibrium explicitly. We perform sensitivity analyses with respect to suppliers’ production costs, reliabilities, and their correlation. Results: We find, surprisingly, that an increase in the reliability of a supplier may, counter to our intuition, hurt it because of the competition between the suppliers selling to a responsive-pricing retailer. Furthermore, in contrast to the literature, we find that under responsive pricing, a high disruption correlation may benefit a supplier that has a cost advantage, and the total order quantity may increase in that correlation because of supplier competition. Managerial implications: This paper has important implications for unreliable suppliers because the way reliability and correlation influence their profits depends on the retailer’s pricing power and the competition intensity between the suppliers. With a responsive-pricing retailer, a supplier may not benefit from higher reliability but may benefit from a higher correlation. This suggests that a low-cost supplier serving a responsive-pricing retailer could add to its decision-making tools a new incentive of creating a positively correlated supply network by building plants in the geographic location of its competitor or sourcing from the same tier 2 supplier to obtain an increased correlation strategically.

Intertemporal Segmentation via Flexible-Duration Group Buying

2020 ◽  
Author(s):  
Ming Hu ◽  
Jingchen Liu ◽  
Xin Zhai
Keyword(s):  
Rational Expectations ◽  
Customer Segmentation ◽  
Product Line ◽  
Problem Definition ◽  
Batch Size ◽  
Group Buying ◽  
Economic Production ◽  
Managerial Implications ◽  
Expected Waiting Time ◽  
Line Design

Problem definition: We study a special form of group buying: the group buying succeeds only if the number of sign-ups reaches a preset threshold, with no duration constraint. Customers with heterogeneous valuations arrive sequentially and decide between signing up for the group buying or purchasing a regular product. To decide whether to join the group buying, customers need to estimate their expected waiting time, which varies depending on the cumulative sign-ups by the time of their arrival. The firm decides on the prices for the group-buying product and regular product, with the product quality levels and group-buying size exogenously determined. Academic/practical relevance: This type of group buying is often adopted for a special edition of the product and offered alongside a constantly available regular product. Methodology: We study the product line design with the group-buying sign-up behavior of customers characterized by the rational expectations equilibrium in a random pledging process. Results: We show that group buying with flexible duration can result in intertemporal customer segmentation, as different segments might be admitted at different times in the dynamic sign-up process. Such intertemporal segmentation is a natural discrimination scheme and has nontrivial implications. First, the efficiency loss due to waiting for enough sign-ups may decrease when a larger batch size is required for economic production. Second, as valuation heterogeneity in the market increases, the firm may not always benefit from offering group buying along with the regular product. Third, group buying can achieve a win-win-win situation for both high-end and low-end customers as well as the firm. Managerial implications: In addition to demonstrating the profitability of flexible-duration group buying, we show that the firm can strengthen its profitability by contingently setting prices or concealing sign-up information in group buying. We also confirm the robustness of our main insights by considering customers’ heterogeneous patience levels and horizontally differentiated products, among other factors.

Fish Exports and Economic Growth: The Pakistan’s Experience

2019 ◽  
Vol 20 (2) ◽  
pp. 279-296 ◽  
Author(s):  
Syed Tehseen Jawaid ◽  
Mohammad Haris Siddiqui ◽  
Zeeshan Atiq ◽  
Usman Azhar
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Positive Impact ◽  
Impulse Response Function ◽  
Policy Implications ◽  
Sensitivity Analyses ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

This study attempts to explore first time ever the relationship between fish exports and economic growth of Pakistan by employing annual time series data for the period 1974–2013. Autoregressive distributed lag and Johansen and Juselius cointegration results confirm the existence of a positive long-run relationship among the variables. Further, the error correction model reveals that no immediate or short-run relationship exists between fish exports and economic growth. Different sensitivity analyses indicate that initial results are robust. Rolling window analysis has been applied to identify the yearly behaviour of fish exports, and it remains negative from 1979 to 1982, 1984 to 1988, 1993 to 1999, 2004 and from 2010 to 2013, and it shows positive impact from 1989 to 1992, 2000 to 2003 and from 2005 to 2009. Furthermore, the variance decomposition method and impulse response function suggest the bidirectional causal relationship between fish exports and economic growth. The findings are beneficial for policymakers in the area of export planning. This study also provides some policy implications in the final section.

Partial Completion as a Nonprofit Strategy

2021 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Karthik Ramachandran
Keyword(s):  
Nonprofit Organizations ◽  
Service Provision ◽  
Problem Definition ◽  
Product Service ◽  
Service Portfolio ◽  
Wide Range ◽  
Partial Completion ◽  
Innovative Solution ◽  
Managerial Implications ◽  
Level 3

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constraints, some nonprofit organizations (NPOs) have adopted an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO’s choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO’s product or service portfolio. Academic/practical relevance: Although partial product or service provision has been observed in the nonprofit operations, there is limited understanding of when it is an appropriate strategy—a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO’s product/service completion and variety choices. Results: We identify when and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization versus fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations. (1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, even in the presence of ample resources. (2) Partial provision is particularly valuable when beneficiary needs are highly heterogeneous, or beneficiaries have high self-completion capabilities. A higher self-completion capability generally implies a lower optimal completion level; however, it may lead to either a higher or a lower optimal variety level. (3) Although providing incomplete products may appear to burden beneficiaries, a lower completion level can be optimal when fairness is factored into an NPO’s objective or when beneficiary capabilities are more heterogeneous.

The Effects of Patent Extension and Take-Back Regulation on Green Pharmacy

2021 ◽  
Author(s):  
Tianqin Shi ◽  
Nicholas C. Petruzzi ◽  
Dilip Chhajed
Keyword(s):  
Pharmaceutical Industry ◽  
Social Welfare ◽  
Technical Information ◽  
Problem Definition ◽  
Theoretic Model ◽  
Innovative Company ◽  
Take Back ◽  
Starting Point ◽  
European Environmental Agency ◽  
Managerial Implications

Problem definition: The eco-toxicity arising from unused pharmaceuticals has regulators advocating the benign design concept of “green pharmacy,” but high research and development expenses can be prohibitive. We therefore examine the impacts of two regulatory mechanisms, patent extension and take-back regulation, on inducing drug manufacturers to go green. Academic/practical relevance: One incentive suggested by the European Environmental Agency is a patent extension for a company that redesigns its already patented pharmaceutical to be more environmentally friendly. This incentive can encourage both the development of degradable drugs and the disclosure of technical information. Yet, it is unclear how effective the extension would be in inducing green pharmacy and in maximizing social welfare. Methodology: We develop a game-theoretic model in which an innovative company collects monopoly profits for a patented pharmaceutical but faces competition from a generic rival after the patent expires. A social-welfare-maximizing regulator is the Stackelberg leader. The regulator leads by offering a patent extension to the innovative company while also imposing take-back regulation on the pharmaceutical industry. Then the two-profit maximizing companies respond by setting drug prices and choosing whether to invest in green pharmacy. Results: The regulator’s optimal patent extension offer can induce green pharmacy but only if the offer exceeds a threshold length that depends on the degree of product differentiation present in the pharmaceutical industry. The regulator’s correspondingly optimal take-back regulation generally prescribes a required collection rate that decreases as its optimal patent extension offer increases, and vice versa. Managerial implications: By isolating green pharmacy as a potential target to address pharmaceutical eco-toxicity at its source, the regulatory policy that we consider, which combines the incentive inherent in earning a patent extension on the one hand with the penalty inherent in complying with take-back regulation on the other hand, serves as a useful starting point for policymakers to optimally balance economic welfare considerations with environmental stewardship considerations.

Truthful Mechanisms for Medical Surplus Product Allocation

2020 ◽  
Vol 22 (4) ◽  
pp. 735-753 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Turgay Ayer ◽  
L. Beril Toktay
Keyword(s):  
Private Information ◽  
Value Added ◽  
Information Provision ◽  
Problem Definition ◽  
Preference Ranking ◽  
Additional Increase ◽  
Healthcare Facilities ◽  
Selection Decisions ◽  
Managerial Implications ◽  
Recipient Selection

Problem definition: We analyze a resource allocation problem faced by medical surplus recovery organizations (MSROs) that recover medical surplus products to fulfill the needs of underserved healthcare facilities in developing countries. The objective of this study is to identify implementable strategies to support recipient selection decisions to improve MSROs’ value provision capability. Academic/practical relevance: MSRO supply chains face several challenges that differ from those in traditional for-profit settings, and there is a lack of both academic and practical understanding of how to better match supply with demand in this setting where recipient needs are typically private information. Methodology: We propose a mechanism design approach to determine which recipient to serve at each shipping opportunity based on recipients’ reported preference rankings of different products. Results: We find that when MSRO inventory information is shared with recipients, the only truthful mechanism is random selection among recipients, which defeats the purpose of eliciting information. Subsequently, we show that (1) eliminating inventory information provision enlarges the set of truthful mechanisms, thereby increasing the total value provision; and (2) further withholding information regarding other recipients leads to an additional increase in total value provision. Finally, we show that under a class of implementable mechanisms, eliciting recipient valuations has no value added beyond eliciting preference rankings. Managerial implications: (1) MSROs with large recipient bases and low inventory levels can significantly improve their value provision by appropriately determining the recipients to serve through a simple scoring mechanism; (2) to truthfully elicit recipient needs information to support the recipient selection decisions, MSROs should withhold inventory and recipient-base information; and (3) under a set of easy-to-implement scoring mechanisms, it is sufficient for MSROs to elicit recipients’ preference ranking information. Our findings have already led to a change in the practice of an award-winning MSRO.

scholarly journals Produtos Verdes: uma análise comparativa dos valores de consumo entre acadêmicos de administração brasileiros e espanhóis ## Green Products: a comparative analysis of the consumption values between Brazilian and Spanish administration academics

2021 ◽  
Vol 10 (1) ◽  
Author(s):  
Luciana Aparecida Barbieri da Rosa ◽  
Francies Diego Motke ◽  
Leticia Lengler ◽  
Jeanne Margareth Mainardi ◽  
Marcelo Trevisan ◽  
...  
Keyword(s):  
Sustainable Consumption ◽  
Social Value ◽  
Survey Method ◽  
Sustainable Products ◽  
Consumption Values ◽  
Environmental Value ◽  
Functional Value ◽  
Data Collection Instrument ◽  
Brazilian Students ◽  
The One

Atualmente é preciso reavaliar o comportamento do consumidor e seus modos de consumo, pois buscando contribuir para um mundo mais equilibrado, com menos desperdício e impacto ambiental, percebe-se uma maior conscientização da sociedade acerca do que se consome. Neste sentido, este estudo possui como objetivo analisar o comportamento de consumo sustentável e compreender as similaridades e diferenças do consumo de produtos verdes de acadêmicos dos cursos de Administração de uma universidade brasileira e outra, espanhola. Para tanto, utilizou-se o método survey, com uma amostra caracterizada como não-probabilística e por acessibilidade mediante a aplicação de um questionário, que obteve o retorno de 289 respondentes. O instrumento de coleta de dados foi adaptado do estudo desenvolvido por Biswas e Roy (2015), o qual aborda a teoria dos valores de consumo, composta pelo valor funcional, valor social, valor condicional, valor ambiental e valor conhecimento. Os resultados obtidos revelam que, tanto para os acadêmicos brasileiros, quanto para os espanhóis, os constructos valor condicional e valor ambiental apresentaram as maiores médias, enquanto o constructo valor social apresentou uma média baixa. Também se observou que, por um lado, os estudantes brasileiros são mais propensos a adquirir produtos sustentáveis por sugestão de seus grupos sociais e que estão mais preocupados com o fato de que a escassez dos recursos naturais ameace o futuro das gerações posteriores. Por outro lado, os estudantes espanhóis são mais dispostos a comprar produtos de empresas que investem em questões ambientais. ABSTRACTNowadays it is necessary to reevaluate consumer behavior and consumption modes, as seeking to contribute to a more balanced world, with less waste and environmental impact, there is a greater awareness of society about what is consumed. In this sense, this study aims to analyze the sustainable consumption behavior of academics in Administration courses in Brazil and Spain, through comparative research. For this, the survey method was used, with a sample characterized as non-probabilistic and for accessibility through the application of a questionnaire, which obtained the return of 289 respondents. The data collection instrument was adapted from the study developed by Biswas and Roy (2015), which addresses the theory of consumption values, composed of functional value, social value, conditional value, environmental value, and knowledge value. The results obtained reveal that, for both Brazilian and Spanish academics, the conditional value and environmental value constructs had the highest averages, while the social value construct had a low average. It was also noted that, on the one hand, Brazilian students are more likely to purchase sustainable products at the suggestion of their social groups and that they are more concerned that the scarcity of natural resources threatens the future of later generations. On the other hand, Spanish students are more willing to buy products from companies that invest in environmental issues.

scholarly journals Exploration of Methods for Small Businesses in Determining The Brand Positioning through Marketing Mix Concept

The Winners ◽  
2018 ◽  
Vol 19 (1) ◽  
pp. 1
Author(s):  
Irene Teresa Rebecca ◽  
Anita Maharani
Keyword(s):  
Social Media ◽  
Quality Assurance ◽  
Small Businesses ◽  
Research Method ◽  
Marketing Mix ◽  
Product Line ◽  
Business Owner ◽  
Brand Positioning ◽  
Managerial Implications ◽  
Depth Interviews

The purpose of this study was to show how small business owner reconstructed brand for its products through the concept of 7Ps. The research method used was qualitative, with in-depth interviews with the owner of the brand Keona. The results show that Keona products keep producing an updated model that is able to compete, supported by price and after-sales service. Then, consumers can find the products through the variety of channels. Results of this study encourages managerial implications that the business owner of bag Keona should keep up the quality assurance of its products, referring to standard operational procedures for service. Moreover, the owner should also optimize the features of social media as a means of marketing, and produce product line for any segments.

Managing Congestion in Matching Markets

2021 ◽  
Author(s):  
Nick Arnosti ◽  
Ramesh Johari ◽  
Yash Kanoria
Keyword(s):  
Problem Definition ◽  
Theoretic Model ◽  
Matching Markets ◽  
Contact Potential ◽  
Managerial Implications ◽  
The Commons ◽  
Game Theoretic ◽  
Face Search ◽  
Uniqueness Of Equilibrium ◽  
Never Screened

Problem definition: Participants in matching markets face search and screening costs when seeking a match. We study how platform design can reduce the effort required to find a suitable partner. Practical/academic relevance: The success of matching platforms requires designs that minimize search effort and facilitate efficient market clearing. Methodology: We study a game-theoretic model in which “applicants” and “employers” pay costs to search and screen. An important feature of our model is that both sides may waste effort: Some applications are never screened, and employers screen applicants who may have already matched. We prove existence and uniqueness of equilibrium and characterize welfare for participants on both sides of the market. Results: We identify that the market operates in one of two regimes: It is either screening-limited or application-limited. In screening-limited markets, employer welfare is low, and some employers choose not to participate. This occurs when application costs are low and there are enough employers that most applicants match, implying that many screened applicants are unavailable. In application-limited markets, applicants face a “tragedy of the commons” and send many applications that are never read. The resulting inefficiency is worst when there is a shortage of employers. We show that simple interventions—such as limiting the number of applications that an individual can send, making it more costly to apply, or setting an appropriate market-wide wage—can significantly improve the welfare of agents on one or both sides of the market. Managerial implications: Our results suggest that platforms cannot focus exclusively on attracting participants and making it easy to contact potential match partners. A good user experience requires that participants not waste effort considering possibilities that are unlikely to be available. The operational interventions we study alleviate congestion by ensuring that potential match partners are likely to be available.

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