No abstract

Analyzing the proliferation of item‐level RFID, recent studies have identified the cost sharing of the technology as a gating issue. Various qualitative studies have predicted that conflict will arise, in particular in decentralized supply chains, from the fact that the benefits and the costs resulting from item‐level RFID are not symmetrically distributed among supply chain partners. To contribute to a better understanding of this situation, we consider a supply chain with one manufacturer and one retailer. Within the context of this retail supply chain, we present analytic models of the benefits of item‐level RFID to both supply chain partners. We examine both the case of a dominant manufacturer as well as the case of a dominant retailer, and we analyze the results of an introduction of item‐level RFID to such a supply chain depending on these market power characteristics. Under each scenario, we show how the cost of item‐level RFID should be allocated among supply chain partners such that supply chain profit is optimized.

No abstract

a b s t r a c tConcern related to sustainability and greenhouse gases has grown among citizens as well as firms, which are increasingly committing to carbon emission reduction targets. However, firms' emissions come from direct and indirect sources, and from the different stages of their supply chain. Therefore, comprehensive supply chain approaches are essential to ensure the cost-effectiveness of carbon management strategies. These approaches should capture operational and environmental trade-offs arising from the interaction between different supply chain processes such as procurement, manufacturing, transport and inventory management. Considering all these processes, we propose a model for supply chain network design that takes demand uncertainty into account and includes decisions on supply chain responsiveness under different carbon policies: caps on supply chain carbon footprints, caps on market carbon footprints, and carbon taxes. Our model supports the analysis of the effect of different policies on costs and optimal network configuration and allows us to distinguish between different product types: functional or innovative products. With detailed numerical examples, we illustrate the type of analysis and managerial insights that can be derived with our model, which include the assessment of supply chains' potential for carbon abatement, the study of the effect of different carbon policies on supply chain costs and network design, the analysis of the impact of various product characteristics, the test of an alternative profit maximisation model, and the determination of the value of a supply chain carbon tax that should induce specific levels of carbon abatement.

No abstract

This paper examines the financial consequences that inventory leanness has on firm performance. We conduct an econometric analysis using 4,324 publicly traded U.S. manufacturing companies for the period 1980-2008. Using an instrumental variable fixed effects estimator we find a nonlinear relationship between inventory leanness and financial performance. However, we note that the maximum point of this inverted Ushaped relationship often lies at the extreme end of the investigated samplesuggesting a decreasing return from leanness rather than an optimal level. We show that the strength of this relationship is highly dependent on both the industry and inventory component (raw materials, work in process and finished goods) studied. The main novelty and direct implication of our findings is that most firms still have much potential to increase profitability by becoming leaner and they are unlikely to cross a threshold where profitability decreases with increased leanness. We display how much the average firm could gain by becoming leaner and show how this sensitivity changes by inventory component and industry. Finally, we highlight several new econometric aspects that we believe must be addressed when empirically investigating the inventory-performance link.

Supply contracts are used to coordinate the activities of the supply chain partners. In many industries, service level‐based supply contracts are commonly used. Under such a contract, a company agrees to achieve a certain service level and to pay a financial penalty if it misses it. The service level used in our study refers to the fraction of a manufacturer's demand filled by the supplier. We analyze two types of service level‐based supply contracts that are designed by a manufacturer and offered to a supplier. The first type of contract is a flat penalty contract, under which the supplier pays a fixed penalty to the manufacturer in each period in which the contract service level is not achieved. The second type of contract is a unit penalty contract, under which a penalty is due for each unit delivered fewer than specified by the parameters of the contract. We show how the supplier responds to the contracts and how the contract parameters can be chosen, such that the supply chain is coordinated. We also derive structural results about optimal values of the contract parameters, provide numerical results, and connect our service level measures to traditional service level measures. The results of our analyses can be used by decision makers to design optimal service level contracts and to provide them with a solid foundation for contract negotiations.

Roles of inventory and reserve capacity in mitigating supply chain disruption risk.