R K Amit

In this paper, we develop an optimal shelf-space stocking policy when demand, in addition to the exogenous uncertainty, is influenced by the amount of inventory displayed (supply) on the shelves. Our model exploits stochastic dominance condition; and, we assume that the distribution of realized demand with higher stocking level stochastically dominates the distribution of realized demand with lower stocking level. We show that the critical fractile with endogenous demand may not exceed the critical fractile of the classical newsvendor model. Our computational results validate the optimality of amount of units stocked on the retail shelves.

In addition to serving high-value-to-weight goods, the air cargo market is expanding substantially mainly because of globalisation and the need for increased responsiveness in supply chains. At the same time, the theory of air cargo revenue management is far from the contemporary practices because of cargo-specific complexities like uncertain, multidimensional capacities, variable tendering, and forwarder’s market power. This paper surveys the scientific contributions relevant to air cargo revenue management. We provide a comprehensive review of the developments in both quantity and pricing revenue management decisions. Additionally, we substantiate each decision with the appropriate dynamic programming formulation, which helps in highlighting the extensions to the current literature. We conclude our discussion by enumerating the potential prospects that are great revenue-yielding opportunities. This review links theoretical contributions and practical problems and serves as the signpost for the 30-year-old air cargo revenue management.

This book contains contemporary discussions on technology, business models, and the adoption of digital manufacturing systems. The book’s initial chapters cover technological details underpinning the digital manufacturing systems, for example, cyber-physical systems and digital twins. Next, the book discusses how organizations modify their business models using concepts such as servitization and platforms to leverage digital manufacturing. The latter chapters focus on how a country’s unique economic and infrastructural context influences digital manufacturing adoption in terms of technology and business models and frameworks to evaluate readiness for digital manufacturing. With perspectives from different continents, the book appeals to academic researchers and industry alike.

The objective of this paper is to develop a solution concept for stability of coalitional games with externalities. The existing solution concepts for this class of coalitional games can be empty. Using the partition function form representation, we propose a new solution concept called equivalence nucleolus, which is shown to be unique and always non-empty.

Purpose: Product as a service (PaaS) is a method of business innovation for traditional product companies to make their offerings more attractive, move up the value chain and find more customers. However, the customer acceptance of PaaS depends on the market in which it operates. The purpose of this study is to understand, through an automotive lease PaaS evaluation and from an outside-in user perspective, the effects of the main intrinsic and extrinsic factors of a product, its design and brand, on the lease versus buy decision of automobiles by consumers in an emerging market, to help companies transition to a PaaS business model. Design/methodology/approach: A survey of actual car owners and lease car users was conducted. Confirmatory factor analysis was used to test the measurement model, followed by logistic regression for statistical modeling. As a practice evaluation of an existing PaaS example, this study further explored the expectations and experience of automotive lease users to link practical insights to analytical results and help businesses make a successful transition to PaaS. Findings: The results of the study showed the effect of the brand as significant in lease versus buy decisions. Brand loyalty is more important when leasing than when buying a car. However, brand awareness/association is less important for leasing than buying. There was no significant difference in consumer expectations of product design in automotive lease PaaS. Customers who buy and lease cars have the same expectations of the overall product in terms of its key design attributes. Originality/value: The literature on PaaS has mostly focused on strategies, frameworks and guidelines for implementation and empirical studies are limited. Comparative analyses between PaaS and traditional ownership models are also limited. It is unclear how consumers’ expectations differ between PaaS and traditional ownership models, especially in emerging markets, because PaaS’s success depends on the market in which it operates. This study addresses this gap in the literature.

In this paper, we discuss a scenario in capital structure where two divisional managers compete for capital from a firm for their projects in a perfect information setting. We consider verifiable profits and study take-it-or-leave-it contracts where the managers ask for capital from the firm privately or sequentially in public and offer a part of the profit to the firm. Under capital constraint, we demonstrate that in private meeting, there is no sub game perfect Nash equilibrium (SPNE) in pure strategies; but in sequential public meeting, SPNE exists in pure strategies and, for the firm it is better to operate under capital constraint to increase the competition among managers.

Sustainable Development Goal 6.1 is “to achieve universal and equitable access to safe and affordable drinking water for all”. To measure affordability of accessing clean water, coping cost approach has been adopted, and this paper contributes to the burgeoning empirical literature on measuring affordability. The objective of this paper is to estimate coping costs related to the erratic, unsafe, and inadequate water supply in the metropolitan area of Chennai, India. Based on the data collected from 423 households, we find that households in Chennai city resort to five main types of coping behaviors: collecting, pumping, treating, storing, and purchasing. We employ the multiple regression with robust errors, to estimate the determinants of the coping costs. We obtain the mean coping costs as INR (Indian Rupee) 553, and INR 658 per month for piped and non-piped households in this sample. For non-piped households, collection costs (time costs in traveling and queuing for collecting water) constitute 22% of the coping costs, while collection costs for piped households are less 2% of the coping costs. One interesting finding is the variation of coping costs with household income—these costs are roughly 1% of income for the high income households to as high as 15% for the low income households. The results outline the need of policy intervention to enhance affordability.

In this paper, we consider a supply chain coordination problem when demand faced by a retailer is influenced by the amount of inventory displayed on the retail shelf. We assume that shelf space inventory is used as one of the levers to stimulate demand. Our objective in this research is to design individually rational contracts that coordinate the supply chain when the retailer faces inventory-level-dependent demand. We consider a buyback contract where any leftover inventory at the retailer can be returned to the supplier at a pre-specified terms of the buyback contract. The existing buyback contracts in the supply chain coordination literature do not guarantee the satisfaction of individual rationality constraint. A continuum of buyback contracts coordinate the supply chain. The contracts may differ on the basis of division of profits resulting in contracts that may not be individually rational. This motivates us to use the Shapley value from the cooperative game theory which ensures fairness and individual rationality in the buyback contract. We also provide managerial insights into the design of the contracts and analyze the impact of shelf space inventory on the contract parameters. © 2012 Elsevier B.V.

Stringent environmental regulations, improving technology, and growing incomes have shortened vehicle life-cycles that leads to increasing number of end-of life vehicles (ELVs). ELVs form a valuable source of materials when they are recycled in an efficient manner. Regulated ELV recycling markets for ELV recycling ensure an efficient material recovery, unlike unregulated markets which are present predominantly in emerging economies. We analyze ELV recycling in an unregulated market through a system dynamics model. These markets are close to perfectly competitive markets with low enter and exit barriers for dismantlers, and the scrap from dismantled vehicles is traded as a commodity. Dismantlers entry and exit decisions—dismantlers’ dilemma—are based on profitability. We conjecture that the dismantlers’ dilemma constrains the dismantling capacity and fluctuates the scrap supply in unregulated recycling markets. Using the Indian data, the simulation results show that the unregulated market will lead to lower dismantling capacity, which may further worsen by increase in dismantling costs. From our analysis, we suggest that lowering dismantling costs through coordination among the dismantlers and providing support for scrap prices through regulation can improve the dismantling situation in these markets.

Risk neutral assumption in the newsvendor problem under recourse option predicts the order quantity insensitive to the selling price; and, risk aversion modeled through common utility functions gives decreasing order quantity with increasing selling price. In this paper, we consider loss aversion to model the choice preference of the decision maker in the newsvendor problem under recourse option, and prove that loss aversion predicts the rational ordering behavior of the newsvendor with respect to the changes in price and cost parameters. Further, we find that loss aversion can significantly improve the performance of utility function based models in predicting the rational behavior. We extend the analysis to a supply chain setting and establish coordinating contract between a loss averse retailer facing a newsvendor problem and a risk neutral supplier under recourse option. We find that the contract parameter does not depend on the loss aversion; hence, the same contract can be implemented with retailers with different levels of loss aversion.