Information, flexibility, and value added

Information technologies used in production activities facilitate the acquisition of more detailed and more timely information concerning the state of the production environment. While the effects of distribution shifts on decisions under uncertainty have been much studied, less is known about the effects of information acquisition on revenue generation and choice. In this article we consider the firm level impacts of information acquisition on revenue, on input use, and on profitability. A choice made under uncertainty depends upon the distribution of a random parameter but not upon its realization, while the choice depends only on the realization when this realization is known. Impacts are determined by interactions between second and third cross derivatives of the primal revenue function.     

Consumer response to and choice of customized versus standardized systems

Recent research on customization suggests that a need exists to examine conditions under which selling customized versus non-customized offerings will be more beneficial to vendors. To this end, this paper empirically evaluates consumer response to and choice of customized systems (offerings that are integrated and customized) in relation to standardized systems (offerings that feature integration but not customization). Through a series of studies, we demonstrate that the relationship between a buyer's systems purchase strategy and their future repurchase intentions toward the seller is moderated by a buyer characteristic (that is, a consumer's insight into his/her own preferences, or the degree to which a consumer can confidently and consistently express his or her true preferences) as well as a seller characteristic (retailer reputation). Given that consumers who are experts have greater insight into their own preferences than novices, our work also suggests that this greater insight into one's own preferences is a plausible explanation for why experts are more likely to choose a customized system. The main practical implication of our research is that it prompts managers to challenge the contention in some mass customization writings that customized offerings have universal appeal. Although the participants in our studies also tended to be more attracted to customized systems in general, this proclivity was lower for consumers with less product category expertise. This is important because our results convey that repurchase intentions towards a vendor will be higher after the purchase of a non-customized system by those consumers who lack insight into their preferences. As such, firms should try to propose customized systems only to those prospective buyers who possess strong preference insight, and propose standardized systems to those buyers who do not.     

Transient results for a high demand CCRC model

Abstract

This paper examines the transient behavior of a stochastic model for high demand continuing care retirement community (CCRC) populations. The CCRC under consideration provides a number of independent living units each of which houses one resident at a time and a skilled nursing facility (SNF) for those who require care. A time-homogeneous Markov process is used to model the care requirements of the CCRC residents. Under the model, the “state” of the population is described by the number of permanent transfers and the number of temporary transfers to the SNF. The paper examines how one can obtain information about the distribution of the state of the CCRC population at a given future time.     

Residual income past and future

This article considers the strengths and weaknesses of value-based management approaches based upon the residual income (RI) concept as the basis for incentive-based reward systems. The objective of these systems is to encourage optimal corporate investment selection by divisional managers and to encourage them to act as if they were independent owners of their divisions sharing a proportion of all losses and all profits. Part 1 of the article considers these systems in the light of the earlier RI debate in the 1960s and 1970s which raised a number of problems applicable to today's value-based systems. It also considers recent attempts to solve, perhaps, the major problem generated in the earlier debate—how to ensure that a single period RI is congruent with project net present value. Part 2 of the article provides a brief survey of current research into incentive systems based on RI. It then presents a possible programme of further research emphasising relevant research in finance theory.     

The Publication Profile of Economists

Publication rates are reported from a set of 126 economics and related journals for 1,600 economists who received their doctorates between 1969 and 1988. The data strongly support the contention that publication of one article per year in established journals is exceptional.     

The split delivery vehicle routing problem with minimum delivery amounts

In the vehicle routing problem, a fleet of vehicles must service the demands of customers in a least-cost way. By allowing multiple vehicles to service the same customer (i.e., splitting deliveries), substantial savings in travel costs are possible. However, split deliveries are often an inconvenience to the customer who would prefer to have demand serviced in a single visit. We consider the vehicle routing problem in which split deliveries are allowed only if a minimum fraction of a customer’s demand is serviced by a vehicle. We develop a heuristic method for solving this problem and report computational results on a wide range of problem sets.