Operations & Supply Chain Management

The authors test methods, based on cognitively simple decision rules, that predict which products consumers select for their consideration sets. Drawing on qualitative research, the authors propose disjunctions-of-conjunctions (DOC) decision rules that generalize well-studied decision models, such as disjunctive, conjunctive, lexicographic, and subset conjunctive rules. They propose two machine-learning methods to estimate cognitively simple DOC rules. They observe consumers' consideration sets for global positioning systems for both calibration and validation data.

Recent theoretical work predicts that an important margin of adjustment to deregulation or trade reforms is the reallocation of output within firms through changes in their product mix. Empirical work has accordingly shifted its focus towards multi-product firms and their product mix decisions. Existing studies have however focused exclusively on the U.S.

We characterize the equilibrium behavior in a broad class of competition models in which the competing firms' market shares are given by an attraction model, and the aggregate sales in the industry depend on the aggregate attraction value according to a general function. Each firm's revenues and costs are proportional with its expected sales volume, with a cost rate that depends on the firm's chosen attraction value according to an arbitrary increasing function.

Under accrual accounting, earnings add to shareholders' equity. Cash flow generated by a business has no effect on the book value of shareholders' equity but reduces the book value of net assets employed in business operations. In short, accrual accounting rules prescribe that earnings add to shareholder value, but cash flow is irrelevant to the valuation of equity. This paper documents that the stock market prices equity shares according to this prescription.

We analyze a planning model for a firm or public organization that needs to cover uncertain demand for a given item by procuring supplies from multiple sources. The necessity to employ multiple suppliers arises from the fact that when an order is placed with any of the suppliers, only a random fraction of the order size is usable. The model considers a single demand season with a given demand distribution, where all supplies need to be ordered simultaneously before the start of the season.

We consider a revenue maximizing make-to-order manufacturer that serves a market of price and delay sensitive customers and operates in an environment in which the market size varies stochastically over time. A key feature of our analysis is that no model is assumed for the evolution of the market size. We analyze two main settings: i) the size of the market is observable at any point in time; and ii) the size of the market is not observable and hence cannot be used for decision-making.

We consider a single product revenue management problem where, given an initial inventory, the objective is to dynamically adjust prices over a finite sales horizon to maximize expected revenues. Realized demand is observed over time, but the underlying functional relationship between price and mean demand rate that governs these observations (otherwise known as the demand function or demand curve), is not known.

We study the following question: How does competition influence the inventory holdings of General Motors' dealerships operating in isolated U.S. markets? We wish to disentangle two mechanisms by which local competition influences a dealer's inventory: (1) the entry or exit of a competitor can change a retailer's demand (a sales effect); and (2) the entry or exit of a competitor can change the amount of buffer stock a retailer holds, which influences the probability that a consumer finds a desired product in stock (a service-level effect).

In this study we estimate empirically the effect of local market conditions on inventory holdings of U.S. automobile dealerships. We show that the influence of competition on a retailer's inventory holdings can be separated into two mechanisms: (1) the entry or exit of a competitor can change a retailer's demand (a sales effect); (2) the entry or exit of a competitor can change the amount of buyer stock a retailer chooses to hold, which influences the probability a consumer finds a desired product in stock (a service level effect).