Suchergebnisse

ABSTRACTSubcontracting has become a prominent business practice across many industries. Subcontracting of industrial production is generally based on short‐term need for additional processing capacity, and is frequently employed by manufacturers to process customer orders more quickly than using only in‐house production. In this article, we study a popular business model where multiple manufacturers, each capable of processing his entire workload in‐house, have the option to subcontract some of their operations to a single third party with a flexible resource. Each manufacturer can deliver customer orders only after his entire batch of jobs, processed in‐house and at the third party, is completed. The third party facility is available to several manufacturers who compete for its use. Current business practice of First‐Come‐First‐Served (FCFS) processing of the subcontracted workloads as well as the competitive Nash equilibrium schedules developed in earlier studies result in two types of inefficiencies; the third party capacity is not maximally utilized, and the manufacturers incur decentralization cost. In this article, we develop models to assess the value created by coordinating the manufacturers' subcontracting decisions by comparing two types of centralized control against FCFS and Nash equilibrium schedules. We present optimal and/or approximate algorithms to quantify the third party underutilization and the manufacturers' decentralization cost. We find that both inefficiencies are more severe with competition than they are when the third party allocates capacity in an FCFS manner. However, in a decentralized setting, a larger percentage of the players prefer Nash equilibrium schedules to FCFS schedules. We extend our analysis to incomplete information scenarios where manufacturers reveal limited demand information, and find that more information dramatically benefits the third party and the manufacturers, however, the marginal benefit of additional information is decreasing. Finally, we discuss an extension wherein each manufacturer's objective takes into account asymmetries in subcontracting, in‐house processing, and delay costs.

ABSTRACTWe examine the strategic interplay between a buyer's design decision and the ensuing competition between suppliers in a three‐tier closed‐loop supply chain setting with significant recycling considerations. The nature of the engineering design decision in our research entails choice of integral versus modular design that has direct implications for the input raw material waste and ensuing competition between suppliers (i.e., incumbent and new). Whereas the integral design requires a large blank and generates excessive material scrap, the modular design reduces the generated scrap, and enhances cut‐to‐fit modularity, but incurs joining cost and yield loss. The incumbent supplier who supports the status quo choice of integral design can effectively recycle excessive material waste, as it is strategically located close to the source of material. The engineering design team at our study firm is currently exploring the option to source from alternative suppliers that can support either integral or modular designs, but have significantly lower effectiveness in recycling scrap material. We characterize the buyer's price sensitivity levels, component characteristics, supply chain configurations, and virgin and scrap specialty material prices that yield various design and sourcing policy alternatives. The buyer's optimal policy choice, the ensuing price–demand dynamics, and the resulting recycling implications demonstrate that the buyer can benefit from strategically tailoring his design decisions to affect the suppliers' material requirements and costs. We show that utilizing an alternative supply option is particularly valuable for components made from a material with a low price differential in virgin and scrap forms in supply chains wherein the new supplier base can recycle effectively. In such cases, the buyer induces severe price competition by dual sourcing the integral design, and competition may negate the seemingly obvious benefits of operational improvements (e.g., higher scrap material return rate).

ABSTRACTWe consider a competitive scheduling setting with arbitrary number of agents each having the option to utilize two parallel resources to satisfy its demand: (i) an in‐house resource dedicated to process only the tasks of each specific agent, and (ii) a flexible resource capable of processing all agents' workloads. In a noncooperative setting, each agent would determine how much of its demand it will subcontract to the flexible resource with the objective to deliver its entire demand as quickly as possible subject to the priority rules set by the owner of the flexible resource (i.e., third‐party). In this study, we also allow for agents to coalesce with other agents and update their initial subcontracting decisions to attain rescheduling savings. Evidently, a grand coalition of all agents can coordinate to achieve the maximum savings possible, but the resulting schedule may yield individual losses for a subset of agents (which we refer to as "losers"), thus necessitating a transfer payment scheme to distribute the rescheduling savings among the agents in an equitable way. We model the rescheduling interactions among the agents as a cooperative savings game, and propose savings distribution schemes that invoke the core allocation concept.

ABSTRACTLow‐waste packaging may imply an inconvenience to consumers and cause firms to offer a compensating price discount. For example, Starbucks' "Take the Mug Pledge" campaign provides a 10‐cent discount for customers who purchase coffee without a standard cup (i.e., customers provide their own cup). Understanding how such a discount drives demand and profit is the focus of this article. We consider a monopolist that can offer a reduced‐packaging option for its product at a variable cost savings. That option implies a transactional "inconvenience" cost for consumers. While that transactional cost is generally positive, our model also permits some consumers to associate convenience with reduced packaging. We derive the optimal price and discount that maximize profits. We show the optimal discount is bounded by the magnitude of the variable cost savings associated with the packaging reduction. We explore when the optimal discount is negative (a price premium), which requires a specific proportion of consumers to associate convenience with reduced packaging. We also derive conditions under which the firm should price to eliminate demand for the standard product, rather than segment the market, to leverage the variable cost savings of reduced packaging. When the variable cost savings are low (e.g., as is true for Starbucks), we show the profit curve for the segmenting policy is relatively flat for a discount up to several multiples of the cost differential. Finally, we demonstrate the potential for the reduced packaging option, with optimal discounting, to simultaneously increase profit and consumer surplus while reducing waste.