The trend of engaging in the Internet-based direct sales has raised serious awareness and attenti... more The trend of engaging in the Internet-based direct sales has raised serious awareness and attention, both in industry and in academia, to the opportunities and challenges of using both integrated and nonintegrated distribution channels simultaneously. In this chapter, we investigate the impact of the interplay between customers’ channel preference and distribution costs on the supply chain channel design for a
ABSTRACT The predominant perception on commonality strategy in product line design is that it ent... more ABSTRACT The predominant perception on commonality strategy in product line design is that it entails a trade-off decision for a firm between cost savings and product differentiation. Adopting the commonality strategy may lower a firm's manufacturing costs, but it blurs the distinction between products targeting different consumer segments and makes consumer switching between products more likely such that cannibalization is always intensified. We show that this view in the literature is based on a crucial assumption that the quality valuation of one consumer segment is greater than that of another segment for all product attributes; i.e., one segment's preference structure dominates the other segment's preference structure. In this paper we consider the case of a nondominating preference structure where each segment has an attribute it values more than the other segment does. Interestingly, we show that the effect of commonality strategy is more diverse in this nondominating preference structure and that commonality can actually relieve cannibalization in the product line design. This finding gives rise to a previously unrecognized opportunity for firms to redesign their product lines to improve profits.
The advent of e-commerce has prompted many manufacturers to redesign their traditional channel st... more The advent of e-commerce has prompted many manufacturers to redesign their traditional channel structures by engaging in direct sales. The model conceptualizes the impact of customer acceptance of a direct channel, the degree to which customers accept a direct ...
... Papers based on the mul-tidimensional scaling (MDS) approach (eg, Shocker and Srinivasan 1974... more ... Papers based on the mul-tidimensional scaling (MDS) approach (eg, Shocker and Srinivasan 1974, Sudharsan et al. 1987) also suffer from the same difficulty. ... 2 E2i (c )_-3 cW u tIcJEi C J 3 We use rr to represent both the product design strategy and the profit. ...
International Journal of Production Research, 2002
Upon receiving emergency orders, managers often expedite the orders when inventories are insuffic... more Upon receiving emergency orders, managers often expedite the orders when inventories are insufficient to fulfil orders from current stocks. These practices not only disrupt production flow on the shop floor, but also complicate capacity planning because of unexpected set-ups. While the use of safety stock is a clear option that can be used to overcome the impact of emergency orders, the effectiveness of the option needs to be examined. We compare the performance of push and pull systems with explicit consideration of order-expediting and capacity constraints. Using service level, operating costs, and delivery time for late orders as relevant performance measures, we provide insights for managers who suffer from uncertain demand.
We consider a Vertical Product-line Design (VPD) problem for a monopolist where products are desi... more We consider a Vertical Product-line Design (VPD) problem for a monopolist where products are designed with quality-type attributes and customer segments exhibit an ordered pattern in the attribute part-worth structure. In this paper, we examine the appropriateness of a strict-product-ordering approach across products in designing a vertical product line. We show that the approach, although used widely in practice, is not a property of an optimal solution and can lead to an arbitrarily bad design. Furthermore, we present a sufficient condition where the strict-product-ordering approach is the property of an optimal solution in a general product line design problem. We also show that the VPD problem with a strict-product-ordering approach is computationally intractable, and develop a greedy heuristic solution procedure that exploits the problem structure. A computational study shows that the heuristic results in an average performance ratio of 98.7% compared with optimal solutions. In addition, our computational study shows that insisting on the strict-product-ordering approach results in on-average 3% less profit for the firm if it is enforced in inappropriate conditions.
We develop an integrated approach for analyzing logistics and marketing decisions within the cont... more We develop an integrated approach for analyzing logistics and marketing decisions within the context of designing an optimal returns system for a retailer servicing two distinct market segments. At the operational level, we show that the optimal refund price is not unique. ...
The trend of engaging in the Internet-based direct sales has raised serious awareness and attenti... more The trend of engaging in the Internet-based direct sales has raised serious awareness and attention, both in industry and in academia, to the opportunities and challenges of using both integrated and nonintegrated distribution channels simultaneously. In this chapter, we investigate the impact of the interplay between customers’ channel preference and distribution costs on the supply chain channel design for a
ABSTRACT The predominant perception on commonality strategy in product line design is that it ent... more ABSTRACT The predominant perception on commonality strategy in product line design is that it entails a trade-off decision for a firm between cost savings and product differentiation. Adopting the commonality strategy may lower a firm's manufacturing costs, but it blurs the distinction between products targeting different consumer segments and makes consumer switching between products more likely such that cannibalization is always intensified. We show that this view in the literature is based on a crucial assumption that the quality valuation of one consumer segment is greater than that of another segment for all product attributes; i.e., one segment's preference structure dominates the other segment's preference structure. In this paper we consider the case of a nondominating preference structure where each segment has an attribute it values more than the other segment does. Interestingly, we show that the effect of commonality strategy is more diverse in this nondominating preference structure and that commonality can actually relieve cannibalization in the product line design. This finding gives rise to a previously unrecognized opportunity for firms to redesign their product lines to improve profits.
The advent of e-commerce has prompted many manufacturers to redesign their traditional channel st... more The advent of e-commerce has prompted many manufacturers to redesign their traditional channel structures by engaging in direct sales. The model conceptualizes the impact of customer acceptance of a direct channel, the degree to which customers accept a direct ...
... Papers based on the mul-tidimensional scaling (MDS) approach (eg, Shocker and Srinivasan 1974... more ... Papers based on the mul-tidimensional scaling (MDS) approach (eg, Shocker and Srinivasan 1974, Sudharsan et al. 1987) also suffer from the same difficulty. ... 2 E2i (c )_-3 cW u tIcJEi C J 3 We use rr to represent both the product design strategy and the profit. ...
International Journal of Production Research, 2002
Upon receiving emergency orders, managers often expedite the orders when inventories are insuffic... more Upon receiving emergency orders, managers often expedite the orders when inventories are insufficient to fulfil orders from current stocks. These practices not only disrupt production flow on the shop floor, but also complicate capacity planning because of unexpected set-ups. While the use of safety stock is a clear option that can be used to overcome the impact of emergency orders, the effectiveness of the option needs to be examined. We compare the performance of push and pull systems with explicit consideration of order-expediting and capacity constraints. Using service level, operating costs, and delivery time for late orders as relevant performance measures, we provide insights for managers who suffer from uncertain demand.
We consider a Vertical Product-line Design (VPD) problem for a monopolist where products are desi... more We consider a Vertical Product-line Design (VPD) problem for a monopolist where products are designed with quality-type attributes and customer segments exhibit an ordered pattern in the attribute part-worth structure. In this paper, we examine the appropriateness of a strict-product-ordering approach across products in designing a vertical product line. We show that the approach, although used widely in practice, is not a property of an optimal solution and can lead to an arbitrarily bad design. Furthermore, we present a sufficient condition where the strict-product-ordering approach is the property of an optimal solution in a general product line design problem. We also show that the VPD problem with a strict-product-ordering approach is computationally intractable, and develop a greedy heuristic solution procedure that exploits the problem structure. A computational study shows that the heuristic results in an average performance ratio of 98.7% compared with optimal solutions. In addition, our computational study shows that insisting on the strict-product-ordering approach results in on-average 3% less profit for the firm if it is enforced in inappropriate conditions.
We develop an integrated approach for analyzing logistics and marketing decisions within the cont... more We develop an integrated approach for analyzing logistics and marketing decisions within the context of designing an optimal returns system for a retailer servicing two distinct market segments. At the operational level, we show that the optimal refund price is not unique. ...
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Papers by Dilip Chhajed