The negative impact of product variety: Forecast bias, inventory levels, and the role of vertical integration

Wan, Xiang; Sanders, Nada R.

doi:10.1016/j.ijpe.2017.02.002

Cited by 81 publications

(63 citation statements)

References 61 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…On the other hand, some other OEMs choose to offer remanufactured products (e.g. Apple, Caterpillar, Cummins) for the sake of enhancing profitability or brand social image (McConocha and Speh, 1991) despite that the increased product variety makes supply chain operations more complicated (Fisher and Ittner, 1999;Wan et al, 2017). Many studies show that the remanufacturing decision of OEMs is contingent upon the corresponding cost savings Xiong et al, 2013;Zheng et al, 2019), which are closely related to product design (Desai et al, 2001;Gu et al, 2015;Joshi and Gupta, 2019).…”

Section: Introductionmentioning

confidence: 99%

Impact of product-design strategies on the operations of a closed-loop supply chain

Zhi

et al. 2019

Transportation Research Part E: Logistics and Transportation Re

128

View full text Add to dashboard Cite

This study investigates product design and its impact on the operations of a two-echelon closed-loop supply chain (CLSC). Research findings reveal that remanufacturing does not necessarily enhance the profitability of the supplier or the manufacturer, but adjusting product-design strategies helps to curb loss if profitability suffers. An environmental impact analysis identifies an interval for the base unit remanufacturing cost, within which remanufacturing is beneficial. We then obtain the condition under which the environmental impact can be mitigated by product design. These results shed insights for supply chain managers in their operational decisions and policy-makers in properly regulating remanufacturing activities.Keywords: Product-design strategy; Closed-loop supply chain; Remanufacturing; Environmental impact speaking, remanufacturing-oriented product design interacts with other decisions such as collection (Atasu and Souza, 2013;Galbreth et al., 2013;Subramanian et al., 2013), remanufacturing (Reimann et al., 2019), and pricing strategies (Örsdemir et al., 2014;Wu, 2013). Existing studies show that a supply chain member, such as an OEM, may change its product-design strategy to deter its competitor from remanufacturing (Subramanian et al., 2013) or to attain win-win results for both parties (Wu, 2013). In addition, Gu et al. (2015) reveal that an OEM can adjust its product-design strategy to maximize its profits if it engages in remanufacturing. Therefore, product design proves to be an effective tool for a supply chain member to maximize its profit in a remanufacturing context.The aforesaid studies assume that an integrated manufacturer is responsible for the design and production of a single product. But in reality, many products are designed and produced by a non-integrated manufacturer and its suppliers. For instance, PC manufacturers purchase CPUs from Intel or AMD and memory chips from other external chipmakers to make their final products. Most Chinese automakers rely on external suppliers for high-quality key components such as engines, gearboxes, and tires. It is apparent that the success of these manufacturers depends on their key component suppliers.Empirical evidence has revealed that an increasing number of OEMs are interested in motivating their suppliers to participate in their product development (Yan et al., 2018). In most cases, if a manufacturer engages in both producing new product and remanufacturing, the remanufactured product typically erodes demand for new final products, leading to reduced demand for components. For instance, as an engine producer, Cummins produces both new and remanufactured engines (here, the engine is a final product of Cummins). Its remanufactured engines are used to replace broken ones in faulty vehicles (Shi et al, 2016).It is apparent that Cummins' remanufactured engines compete with its new products, thereby reducing demand for engine parts such as bent axles. Another example is that automatic gearboxes used in many domestic automakers in China are boug...

show abstract

Section: Introductionmentioning

confidence: 99%

Impact of product-design strategies on the operations of a closed-loop supply chain

Zhi

et al. 2019

Transportation Research Part E: Logistics and Transportation Re

128

View full text Add to dashboard Cite

show abstract

“…Following certain recent literature (e.g., Lin, McDonough, Lin, and Lin, 2013;Wan and Sanders, 2017), we conducted a significance test to assess the indirect effect of the attributes of the technical problem on the performance of the contest. Such indirect effects only capture the effect of the independent variables on the dependent variable through the mediator (Fritz and MacKinnon, 2007;Hayes, 2009).…”

Section: Robustness Checkmentioning

confidence: 99%

“To Own or Not to Own?” A Study on the Determinants and Consequences of Alternative Intellectual Property Rights Arrangements in Crowdsourcing for Innovation Contests

Mazzola

Acur

Piazza³

et al. 2018

J of Product Innov Manag

View full text Add to dashboard Cite

Firms are increasingly engaging in crowdsourcing for innovation to access new knowledge beyond their boundaries; however, scholars are no closer to understanding what guides seeker firms in deciding the level at which to acquire rights from solvers and the effect that this decision has on the performance of crowdsourcing contests. Integrating property rights theory and the problem‐solving perspective while leveraging exploratory interviews and observations, we build a theoretical framework to examine how specific attributes of the technical problem broadcast by firms affect the seekers’ choice between alternative intellectual property rights (IPR) arrangements that call for acquiring or licensing‐in IPR from external solvers (i.e., with high and low degrees of ownership, respectively). Each technical problem differs in the knowledge required to be solved as well as in the stage of development of the innovation process and seeker firms pay great attention to such characteristics when deciding about the IPR arrangement they choose for their contests. In addition, we analyze how this choice between acquiring and licensing‐in IPR, in turn, influences the performance of the contest. We empirically test our hypotheses analyzing a unique dataset of 729 challenges broadcast on the InnoCentive platform from 2010 to 2016. Our results indicate that challenges related to technical problems in later stages of the innovation process are positively related to the seekers’ preference toward IPR arrangements with a high level of ownership, while technical problems involving a higher number of knowledge domains are not. Moreover, we found that IPR arrangements with a high level of ownership negatively affect solvers’ participation and that IPR arrangement play a mediating role between the attributes of the technical problem and the solvers’ self‐selection process. Our paper contributes to the open innovation and crowdsourcing literature and provides practical implications for both managers and contest organizers.

show abstract

“…Over the years, there has been a rich body of research developed on product variety and the impact of product variety on performance (Fisher et al., ; Ramdas et al., ; Wan, ; Wan & Sanders, ). In contrast, the study of variety has not been extended to ancillary services, such as logistics services.…”

Section: Literature Reviewmentioning

confidence: 99%

How Do Delivery Variety Decisions Contribute to Sales? An Empirical Study on Demand and Supply Integration

2017

Self Cite

View full text Add to dashboard Cite

This study empirically assesses the value of decisions on offering delivery variety (the number of different methods of truck transport used to deliver products to buyers). Rooted in the literature on demand and supply integration, we develop the relationship between delivery variety decisions and sales through the mediating role of unit fill rate. We find that a decision to increase delivery variety will indirectly improve sales through the mediating role of the fill rate. Furthermore, our results suggest that decisions on order variety (the number of ordering methods offered to buyers) moderates this mediation effect. A decision to increase order variety enhances the benefits of delivery variety. We estimate our models using archival data including deliveries, order fulfillment, sales records, and other operational data over three years. When the number of delivery methods increases from 1 to 3, fill rates increase by 1.22% and sales increase by 15.39%, and when the number of order methods increases from 1 to 4, the impact of delivery variety on fill rates increases by an additional 0.39% and on sales by an additional 4.68%. These findings provide empirical support for the integration of demand and supply associated with decision making in supply chains and underscore the need for top management to consider the complementary benefits of delivery variety and order variety on order fulfillment and sales.

show abstract

The negative impact of product variety: Forecast bias, inventory levels, and the role of vertical integration

Cited by 81 publications

References 61 publications

Impact of product-design strategies on the operations of a closed-loop supply chain

Impact of product-design strategies on the operations of a closed-loop supply chain

“To Own or Not to Own?” A Study on the Determinants and Consequences of Alternative Intellectual Property Rights Arrangements in Crowdsourcing for Innovation Contests

How Do Delivery Variety Decisions Contribute to Sales? An Empirical Study on Demand and Supply Integration

Contact Info

Product

Resources

About