Decision Making & Negotiations

This paper studies an incomplete contracting model to compare the effectiveness of alternative transfer pricing mechanisms. Transfer pricing serves the dual purpose of guiding intracompany transfers and providing incentives for upfront investments at the divisional level. When transfer prices are determined through negotiation, divisional managers will have insufficient investment incentives due to "hold-up" problems. While cost-based transfer pricing can avoid such "hold-ups", it does suffer from distortions in intracompany transfers.

The author argues that trade liberalization must be balanced in agenda, process and outcomes, including not only sectors in which developed countries have a comparative advantage, like financial services, but also those in which developing countries have a special interest, like agriculture and construction services. Account must be taken of the marked disadvantage that developing countries have in participating meaningfully in negotiations.

The author argues that making markets work requires sound financial regulation, competition policy and policies to facilitate the transfer of technology and to encourage transparency, some fundamental issues neglected by the Washington consensus.

We describe effective time partitioning heuristics for dynamic lot-sizing problems in multiitem and multilocation production/distribution systems. In a time-partitioning heuristic, the complete horizon of (say) N periods, is partitioned into smaller intervals. An instance of the problem is solved, to optimality, on each of these intervals, and the resulting solution coalesced into a solution for the complete horizon. The intervals are selected to be of a size which permits the use of exact and effective solution methods (e.g., branch-and-bound methods).

In this chapter, we provide a survey of analytical models which can be used to assess the benefits and costs associated with delayed product differentiation in a large variety of settings.

This paper addresses the simultaneous determination of pricing and inventory replenishment strategies in the face of demand uncertainty. More specifically, we analyze the following single item, periodic review model. Demands in consecutive periods are independent, but their distributions depend on the item's price in accordance with general stochastic demand functions. The price charged in any given period can be specified dynamically as a function of the state of the system. A replenishment order may be placed at the beginning of some or all of the periods. Stockouts are fully backlogged.

This paper describes a family of discrete-review policies for scheduling open multiclass queueing networks. Each of the policies in the family is derived from what we call a dynamic reward function: such a function associates with each queue length vector q and each job class k a positive value rk(q), which is treated as a reward rate for time devoted to processing class k jobs. Assuming that each station has a traffic intensity parameter less than one, all policies in the family considered are shown to be stable.

This article analyzes how Knowledge Management (KM) is likely to affect competition in the management consulting industry. KM represents a fundamental and qualitative change in this industry's basic production technology. Because management consultants acquire information directly from their customers, for these firms, KM technology exhibits increasing returns to scale. As such, although KM clearly represents an opportunity for some consultants to build a sustainable competitive advantage, it is likely to lead to a shake-out.

For most firms, successful new product introductions are rare, and failed products represent substantial monetary loss, particularly at the market launch stage. Unfortunately, the ability to reliably predict successes/failures early in the new product development process remains an elusive goal.