Knowledge that Transforms

In this paper we review the literature on appointment policies, specifically in terms of the objective function commonly used and the assumptions made about the behavior of demand. First, we provide an economic framework to analyze the problem. Based on this framework we make a critical analysis of the objective functions used in the literature. We also question the validity of the assumption made throughout the literature that demand is exogenous and independent of customers' waiting times. We conclude that the objective functions used in the literature are appropriate only in the case of a central planner facing a demand that is unresponsive to waiting time. For other scenarios, such as a private server facing a demand that does react to waiting time, these objective functions are only shortcuts for the real objective functions that must be used. A more general model is then proposed that fits these scenarios well. Finally, we determine the impact of using the literature's objective functions on optimal appointment policies.

Evidence on the impact of amplification effects on supply chain performance primarily has been derived from studies in manufacturing industries. In this article we reported on a case study from the telecommunication industry and aimed to analyze relevant root causes and associated countermeasures of the amplification phenomenon in service supply chains. Our case findings confirm the occurrence of upstream amplification of workload in the service supply chain, workload being a more appropriate measure for amplification effects in service supply chains than inventory levels. Not all of the root causes for amplification effects known from research in manufacturing environments were found to apply in this particular service context, especially those related to the use of inventory. In addition, our telecom case study highlighted a new root cause for amplification: interactions of high workloads and reduced process quality that start reinforcing each other once workloads pass a certain threshold. In this particular case, many of the known countermeasures to eliminate amplification did not apply, because of the specific characteristics of the service process, or yielded only limited results. A potentially very powerful countermeasure identified was to implement quality improvements throughout the service chain. This quality dimension links our research to the literature on service management in general, where service quality is on top of the research agenda.

We develop a dynamic prioritization policy to optimally allocate a scarce resource among K projects, only one of which can be worked on at a time. When the projects' delay costs differ, the problem (a “restless bandit”) has not been solved in general. We consider the policy of working on the project with the highest expected delay loss as if the other project was completely finished first (although recourse is allowed). This policy is optimal if: (1) the delay cost increases with the delay regardless of the performance state, (2) costs are not discounted (or, discounting is dominated by delay costs), (3) projects are not abandoned based on their performance state during processing at the scarce resource, and (4) there are no stochastic delays. These assumptions are often fulfilled for processing at specialized resources, such as tests or one‐off analyses.

Using case study data, we describe how a large personal computer manufacturer changed its supply‐chain management strategy after outsourcing the majority of its design and manufacturing activities to a network of focused suppliers. To cope with this new structure, the firm created highly skilled generalists, “supply‐chain integrators,” who coordinate product development, marketing, production, and logistics from product concept to delivery across firm boundaries. We particularly focus on the skill‐set that characterizes these integrators. Finally, we use the case evidence, combined with previous theory, to suggest a specific program of research into coordinating product development across disaggregated supply chains.

This paper presents a methodology and a case study for supply chain management in the clothing industry that makes extensive use of the virtual enterprise paradigm. The main research goal was to design and implement a prototype e‐business software component and carry out tests in several industrial users. The research effort resulted in the extended production data management system (epms), which supported the business processes of customer order management, subcontractor selection, and multi‐site/multi‐firm production orders release. The enablers of this software application were business‐to‐business (b2b) e‐commerce technologies in the operating context of application service providers (asps).

We consider an inventory model with a supplier offering discounts to a reseller at random epochs. The offer is accepted when the inventory position is lower than a threshold level. We compare three different pricing policies in which demand is induced by the resellers price variation. Policy 1 is the EOQ policy without discount offers. Policy 2 is a uniform price, stock‐independent policy. Policy 3 is a stock level‐dependent, discriminated price policy. Assuming constant demand rates, expressions are obtained for the optimal order quantities, prices, and profits. The numerical experiments show that if it is better to accept a suppliers discount, then it benefits the reseller to transfer the discount to downstream customers.

We consider a supply chain with one manufacturer in the upstream and two competing retailers in the downstream. The retailers sell differentiated goods and are endowed with some private demand information. The paper shows that the manufacturer's optimal strategy is independent of the type of downstream competition, Cournot or Bertrand, and that no information will be shared with the manufacturer on a voluntary basis. However, complete information sharing, which benefits all three parties, can be achieved through side payment when the retailers' information is statistically less accurate or when the leakage effect is more beneficial to the retailers.

This paper investigates the relationship between aspects of quality and long run profitability and growth of a firm. The paper first determines whether a stable relationship among price, aspects of quality, and the sales rate exists, by examining the equilibrium properties of a dynamic model. Then, we use the derived equilibrium expressions to develop insights into the strategic nature of “quality reputation” and, how to integrate marketing (i.e., pricing) and quality related decisions. The paper shows under certain conditions it might be more advantageous to manipulate “quality reputation” through advertising and product innovations than to increase product quality. We comment on quality based strategic options a firm must consider to ensure long run growth and profitability.

This paper integrates a stakeholder perspective into the resource‐based view of the firm, to analyze the mechanisms that link the adoption of the international Environmental Management Standard ISO 14001 to firms' competitive advantage. This paper shows that the perceived competitiveness impact of the standard depends mostly on the involvement of firms' external stakeholders (distributors, customers, community members, and regulatory agencies) in its design. ISO 14001 is a process standard, and it is difficult for stakeholders to get credible information on the effectiveness of the standard if they are not involved in its design. Stakeholders' involvement in a firm's ISO 14001 standard becomes a valuable organizational capability, which is difficult to imitate by competitors. The analysis is supported by primary data collected from a questionnaire mailed to 152 firms, resulting in 55 observations representing 30% of the total number of firms certified in the U.S. in August 1998.

The future of the global industry lies in the continuous improvement of both products and processes, a renewed commitment to competition, and an aggressive approach to satisfying customers needs in quality, quantity, and timing. In quality management, the degree of customer satisfaction for a given product may be measured in the form of the loss to society. This loss is formulated as a function of the deviation from the target for each of the product's quality characteristics. The greater the variability of uncontrolled factors during manufacturing or production the larger will be that loss. In this paper, we develop a form of the loss function that takes into account the variability of a production process, the decision loss, and the costs of sampling and inspection. Specifically, we consider monitoring a production process, which may undergo continuous mean shift and variance deterioration during a production run. We then examine decision rules for continuing production or stopping and adjusting the production process.