Seeing sustainability in business operations: US and British food retailer experiments with accountability

This article compares how food retail industries in Britain and the United States are facing sustainability challenges. The British and US industries are in different stages of maturity in identifying and responding to sustainability. Some UK retailers have begun developing broad‐based accountability systems that may aid them to see sustainability in their business operations. By examining what retailers are doing, how accountability systems can inform retailers and the business case for accountability, this article argues that retailers can gain significant business advantages with strategies to improve accountability. Compared with their American counterparts, British retailers may be better placed to deal with sustainability issues in future. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment.     

Data-driven manufacturer-retailer collaboration under competition

This research employs game theoretic models to investigate how and when data-driven collaborations between manufacturers and retailers are beneficial. In the models, two symmetric retailers each offer two products from two different manufacturers. Each manufacturer may choose to collaborate with one or both retailers through data-driven initiatives in providing retail value to the consumers. The results show that the main incentive behind these collaborations arise from the efficient allocation of resources. Surprisingly, greater brand differentiation reduces profit margins and the incentive to collaborate. We also find that market leaders can endogenously arise through data-driven collaborations.     

Scheduling food bank collections and deliveries to ensure food safety and improve access

Food banks are privately-owned non-profit organizations responsible for the receipt, processing, storage, and distribution of food items to charitable agencies. These charitable agencies in turn distribute food to individuals at risk of hunger. Food banks receive donated food from national and local sources, such as The Emergency Food Assistance Program (TEFAP) and supermarkets. Local sources with frequent high-volume donations justify the use of food bank vehicles for collection. Food bank vehicles are also used to deliver food to rural charitable agencies that are located beyond a distance safe for perishable food to travel without spoilage. Due to limited funds, food banks can only afford to sparingly use their capital on non-food items. This requires exploring more cost effective food delivery and collection strategies. The goal of this paper is to develop transportation schedules that enable the food bank to both (i) collect food donations from local sources and (ii) to deliver food to charitable agencies. We identify satellite locations, called food delivery points (FDPs), where agencies can receive food deliveries. A set covering model is developed to determine the assignment of agencies to an FDP. Both vehicle capacity and food spoilage constraints are considered during assignment. Using the optimal assignment of agencies to FDPs, we identify a weekly transportation schedule that addresses collection and distribution of donated food and incorporates constraints related to food safety, operator workday, collection frequency, and fleet capacity.     

非缺陷退货情形下的供应链协调

非缺陷退货指的是没有功能或质量上的缺陷却被客户退给零售商的产品.非缺陷退货造成的成本相当惊人,且主要由生产商承担,然而,减少非缺陷退货则主要靠零售商的努力和投入.本文研究了怎样通过供应链协调来减少非缺陷退货.本文介绍国外学者提出的一种“目标补偿”合同,即当非缺陷退货量低于某一特定目标值时,生产商将对低于目标值的每单位非缺陷退货量支付一定的补偿金.这种合同能有效地激励零售商加大努力来降低非缺陷退货,从而提高整条供应链的期望利润,研究表明,该合同在大多数情形下是Pareto改进的,在某些情形下对生产商和零售商都有利.     

Acceptance of buyout offers in the face of downsizing: empirical evidence from the Korean electronics industry

Using a sample of 812 employees in a major Korean electronics company, this study examines the predictors of acceptance of buyout incentives. As in the retirement research, the results here suggest that employees are more likely to accept buyouts the larger the size of the incentive, the older they are at the time of the offer and the poorer their health. However, in contrast to early retirement research, the results here suggest that it is the better performers, those whose spouses are still in the workforce and those who have already declined previous incentives who are most likely to accept buyout incentives in early and mid-career. This study also highlights five differences between American-based and Korean-based firms in their use of early buyout offers. Korean employees were more likely to accept buyout offers the higher their salary, while in the US salary and acceptance of such offers are typically inversely related. Also, while US firms focus on buyout incentives for older workers, Korean firms will often target workers in their thirties and forties. Korean firms typically offer one-time, lump-sum bonuses as departure incentives, whereas American firms are more likely to add years of age and/or service in calculating pension benefits. While US firms often offer some type of part-time employment contract to their early retirees, Korean firms often prohibit this arrangement. Finally, compared to the US, the greater stigma associated with interfirm mobility in Korea cuts against the acceptances of these offers.     

Subjective performance of patent examiners,implicit contracts,and self‐funded patent offices

Self‐funded patent offices should be concerned with patent quality (patents should be granted to only deserving innovations) and quantity (as revenues come from fees paid by applicants). In this context, we investigate what is the impact of the self‐funded constraint on different bonus contracts and how these contracts affect the examiners' incentive to prosecute patent applications. We consider contracts in which a patent office offers bonuses on quantity quotas (explicit contract) and on quality outcome (either an implicit contract or an explicit contract based on a quality proxy). We find that a self‐funded constrained agency should make different organization choices of incentives. For a low quality proxy precision, an agency facing a tight budget operates well with implicit contracts. However, by only relaxing moderately the budget constraint, the agency might be worse off simply because this will preclude implicit contracts. Only very large patenting fees might allow the agency to compensate for the loss of implicit contracts.     

Incorporating a “no claim bonus” in insurance agency contract

A bonus received by an agent from an insurer when the insured does not make a claim is called a “no claim bonus” (NCB). An NCB rewards the agent's risk‐management (RM) effort that reduces the probability that the insured suffers a loss. This paper designs an incentive compatible contract that induces the agent to choose an RM effort. If the agent's RM effort cost is lower than a threshold, feasible ranges of NCB and premium values exist such that the insurer can offer an incentive compatible agency contract with an NCB that is acceptable to the agent.     

Performance Measurement and Incentive Compensation: An Empirical Analysis and Comparison of Chinese and Western Firms' Practices

This paper describes the findings of a study aimed at providing a replication and extension in China of studies focused on incentive compensation practices of automobile retailers in the USA and the Netherlands. Rich, detailed data-sets from all three countries are analysed together and in comparison. As theory is not well developed at the level of detail of the data collected, the purpose of this study was primarily exploratory, to provide empirics that can lead to the development of theory. The findings show that Chinese firms are much more likely to provide incentive compensation than are Dutch firms, and they are even somewhat more likely to provide them than are US firms. But Chinese bonus plans are more likely to be subjective, rather than formula-based. In the situations where incentive payments are based on pre-set formulas, the Chinese firms' systems are more like those used in the Netherlands than in the USA, with bonuses based on non-financial performance measures and with more complex performance–reward functions. Like managers in the US firms, but unlike managers in the Dutch firms, Chinese managers who receive some form of incentive compensation are more satisfied with their pay. The paper concludes with tentative explanations of the findings and suggestions for future research.     

Private and Social Incentives for Vertical Contract Disclosure

We follow the framework in Arya and Mittendorf's 2011 Rand Journal of Economics paper but extend their analysis by investigating supplier(s)' equilibrium choices of disclosure or confidentiality regarding their contract terms with the downstream retailers. In the case of a common supplier, we find that the unique subgame perfect Nash equilibrium (SPNE) is for the supplier to choose disclosure. This private incentive is opposite to social incentive, which calls for the regulator to choose confidentiality. In the case of dedicated suppliers, however, there are multiple SPNE due to coordination issues between the suppliers. The case which maximizes social surplus – disclosure – can be supported as a SPNE, together with the case of confidentiality, which maximizes supplier profits at the cost of everyone else. Copyright © 2014 John Wiley & Sons, Ltd.     

A mechanism design approach to allocating central government funds among regional development agencies

To allocate central government funds among regional development agencies, we look for mechanisms that satisfy three important criteria: efficiency, (individual and coalitional) strategy proofness (a.k.a. dominant strategy incentive compatibility), and fairness. We show that only a uniform mechanism satisfies all three. We also show that all efficient and strategy proof mechanisms must function by assigning budget sets to the agencies and letting them freely choose their optimal bundle. In choosing these budget sets, the agencies’ private information has to be taken into account in a particular way. The only way to additionally satisfy a weak fairness requirement (regions with identical preferences should be treated equally) is to assign all agencies the same budget set, as does the uniform mechanism. Finally and maybe more importantly, we show that the central government should not impose constraints on how much to fund an activity (e.g. by reserving some funds only for a particular activity): otherwise, there are no efficient, strategy proof and fair mechanisms, no matter how small these constraints are.     

Evaluating food retailing efficiency: the role of information technology

Information and internet-based technologies have fostered new supply chain initiatives in food retailing but little research has evaluated performance and efficiency impacts. A distance function based on three key performance measures for food retailers is used to evaluate store performance and efficiency. The effects of store format, membership in a chain, unionization, and the adoption of a variety of information technologies. Supply chain technologies are groups into three general categories including data sharing technologies, decision sharing technologies, and technologies that support product assortment, pricing, and merchandising decisions.      

Customers,competitors and choice: employee relations in food retailing

This article examines the nature of employee relations in three of the leading food retailers in the UK. It compares and contrasts policies and practices by analysing the links between product markets, management choice, and employee relations. Special reference is made to features of work relations, employment relations, and industrial relations     

具有奖励机制与再保险安排的最优保险合约设计

在保险合约中引入奖励机制可以使投保人动态参与到保险合约中,赋予了投保人在面对索赔事件时是否执行索赔的可选择权,改变了传统保险合约中投保人执行索赔的单一权利,但却增加了保险人潜在的流动性风险。保险合约中再保险的安排则可以对冲由于奖励机制产生的潜在流动性风险,进一步分散保险人的风险,有助于保险人稳健经营。基于此,通过建立具有红利奖励机制与再保险安排的最优保险合约设计模型,最终求解得到最优保险合约是具有最优免赔额形式的保险合约。利用算例研究方法进行建模,研究结果显示,最优保险合约中的最优免赔额与奖励机制中的红利奖励之间具有正向关系,保费、自留额与最优免赔额之间则存在着显著的负向关系。     

Human resource strategies and contingent workers: The case of safety and health in the petrochemical industry

One of the most important economic developments in recent years is the growth in the number of temporary and contract employees. Little is known, however, about the implications these contingent employees have for human resource practices. This paper presents the results of a study of one group of contingent workers, contract workers in the petrochemical industry. The primary concern of this study is the consequences contract workers have for safety, a hotly debated and politically charged issue in an industry where safety mishaps can have catastrophic consequences. We find that contract employees offer petrochemical firms an important degree of flexibility in meeting rapid fluctuations in their demand for labor. Contract employment relationships also create stresses with potentially severe adverse effects on workplace safety. Overcoming these threats to safety while maintaining flexibility will require a high level of coordination among human resource professionals, line managers, corporate executives, unions, and government agencies.     

供应商对不同风险偏好的销售商激励机制研究

利用委托-代理理论,在由单个供应商和单个销售商所组成的简单供应链中,分别研究了供应商和销售商在具有相同风险偏好和不同风险偏好下供应商对销售商的最优激励机制的设计问题,结果表明,在需求不确定且依赖于销售商努力水平的情形下,不同的风险偏好不会影响销售商的努力水平,但在整个激励机制的设计上,会有不同点,并且说明了销售商越是风险规避的,其承担风险的动力就越小。     

WORLD OUTLOOK

The slowdown in the world economy, which followed last year's oil price collapse and which awakened fears that the world was on the threshold of a new recession, is coming to an end. Output growth in the first half of the year was stronger than we had previously expected and a gentle acceleration is forecast over the next eighteen months. In contrast to this improvement on output, there has been little or no progress on the major problems of the world economy, including the USA's twin structural deficits, budget and trade, and the international debt crisis. Moreover, with the US facing elections in just over a year's time, no economic initiative is likely until 1989. Hence the prevailing view that the US and world economies will "muddle through" for another year. But in 1989 a new US administration is likely to face up to the trade and budget imbalances and many US forecasters believe that the required fiscal tightening will lead to recession. As we explain below, this is not our view and the forecast embodies steady 3 per cent growth in the world economy over the medium term. Inflation has now passed the low point brought about by the oil price collapse. On our forecast of output, inflation is expected to remain close to its present underlying rate of 4 per cent.     

不对称成本信息下的供应链收益共享契约研究

讨论了在需求具有价格敏感性的情况下,且零售商的销售成本信息不对称时,供应商如何设计契约参数以最大化供应链总利润的问题,并通过数值算例,分析了不对称情况下供应链各成员收益的变化情况。     

Options as a Marketing Tool: Pricing a Promotional Scheme for a Product with a Secondary Market

Adding options to durable products allows new opportunities for manufacturers and retailers in markets with a secondary market to create better segmentation schemes, provide creative means to differentiate their products and services, and increase the value they offer consumers. This raises the need for sellers to properly price such options. This work presents a few examples of incentive programs for the car industry, develops models and calculates their cost to the seller, demonstrating the applicability of the proposed methodology. Our numerical results indicate that such options are surprisingly inexpensive for car manufacturers and dealers. Copyright © 2015 John Wiley & Sons, Ltd.     

Long-Term or Short-Term Managerial Incentive Contracts

This paper deals with the strategic role of the temporal dimension of contracts in a duopoly market. Is it better for a firm to sign long-term incentive contracts with managers or short-term contracts? For the linear case, with strategic substitutes (complements) in the product market, the incentive variables are also strategic substitutes (complements). It is shown that a long-term contract makes a firm a leader in incentives, while a short-term contract makes it a follower. We find that, under Bertrand competition, in equilibrium one firm signs a long-term contract and the other firm short-term incentive contracts; however, under Cournot competition, the dominant strategy is to sign long-term incentive contracts.