Consider two buyers facing uncertain demands who need to purchase a common critical component from a powerful sole-source supplier. If the two buyers pool their demands and purchase from the supplier as a single entity, will they necessarily earn higher profits than purchasing separately?
We study a manufacturer's optimal multiple-sourcing strategies when some but not all suppliers face risks of complete supply disruptions. Using an approximate model, we show that the optimal unreliable orders are ranked by a simple and intuitive criterion, and are invariant of minor market size changes. Furthermore, when ordering from one reliable and one unreliable supplier, we show that the total order quantity and its allocation between the two suppliers are independent decisions.
The use of simulation methods is not very common in accounting research, even though several authors have pointed to the advantages these methods offer in addressing accounting research questions. In this position paper, I discuss the difficulties encountered when applying simulation methods in accounting research.
In this article, we lay out the challenges and research opportunities associated with business-to-business (B2B) buying. These challenges and opportunities reflect four aspects of B2B buying that the Institute for the Study of Business Markets (ISBM: www.isbm.org) has identified through a Delphi-like process: (1) the changing landscape of B2B buying, (2) the increasing sophistication of sellers, (3) the impact of technological changes, and (4) the increasing importance and growth of emerging markets. For each of these four areas, we identify the relevant background, key issues, and pertinent research agendas.
We disentangle and study the relative importance of different risk preferences in explaining extended warranty purchases and the high premia paid for them. Empirical and behavioral research on insurance is at odds with whether diminishing returns (curvature of the utility function), or loss aversion and nonlinear probability weighting lead to observed consumer behavior. This lack of consensus is primarily due to the inability of standard choice data to separate different risk preferences, and the consequent need to rely on strong parametric assumptions.
We present a survey design that generalizes static conjoint experiments to elicit inter-temporal adoption decisions for durable goods. We show that consumers’ utility and discount functions in a dynamic discrete choice model are jointly identified using data generated by this specific design. In contrast, based on revealed preference data, the utility and discount functions are generally not jointly identified even if consumers’ expectations are known.
The authors study the drivers and performance implications of retailers’ branding strategies for their premium and economy private-label tiers. Retailers can opt for store-banner branding and use their store-banner name and/or logo to reveal their ownership, or they can use stand-alone branding and avoid an explicit link between store brand and retail banner.
In this article, we analyze how retailers change their inventory investment behavior in response to macroeconomic shocks. We examine if service level, as measured by the ratio of stockout to inventory holding costs, can explain the differences in observed behavior across retailers. We use data on macroeconomic indicators and quarterly filings of US public retailers from 1985 to 2009 to estimate a dynamic model of short- and long-term impact of macroeconomic shocks on inventory investment.
Retail inventory is a statistic that is closely watched by retailers as well as their investors, lenders, and suppliers. Retailers not only benefit from inventory, but also bear the cost of excess inventory. Investors, lenders, and suppliers interpret this statistic for signs of the retailer's health, future sales prospects, and impending costs.
In this study, we use hourly data on store traffic, sales, and labor from 41 stores of a large retail chain to identify the extent of understaffing in retail stores and quantify its impact on sales and profitability. Using an empirical model motivated from queueing theory, we calculate the benchmark staffing level for each store, and establish the presence of systematic understaffing during peak hours.
In this paper, we examine the relationship between inventory levels and one-year-ahead earnings of retailers using publicly available financial data. We use benchmarking metrics obtained from operations management literature to demonstrate an inverted-U relationship between abnormal inventory growth and one-year-ahead earnings per share for retailers.
Retail store associates are frontline employees of retail organizations and are responsible for delivering superior in-store experience to its customers. Store associates provide customer service through direct interaction with customers as well as through indirect means such as maintaining a clean store and ensuring that the shelves are fully stocked.
This paper examines the differences in the behaviors of high (HIT) and low inventory turnover (LIT) retailers in responding to demand shocks. We identify quantity and price responsiveness as two mediating mechanisms that distinguish how high and low inventory turnover retailers manage demand shocks.
In Never Stop Learning, behavioral scientist and operations expert Bradley R. Staats describes the principles and practices that comprise dynamic learning and outlines a framework to help you become more effective as a lifelong learner. Replete with the most recent research about how we learn as well as engaging stories that show how real learning happens, Never Stop Learning will become the operating manual for leaders, managers, and anyone who wants to keep thriving in the new world of work.
Older adults will drive U.S. population growth over the next quarter century. Projected to grow four times as fast as the total population, older adults will make up 22 percent of the population in 2040, up from 15 percent in 2015.
Abstract Thinking like an accountant isn’t just rote memorization of accounting rules. Rather, it’s developing the judgment and decision-making skills needed to form accounting estimates and evaluate financial statements critically....
On April 21, the Kenan-Flagler Energy Club celebrated Earth Day with a lecture by alumnus Rob Glen (Arts & Sciences, ’78). A senior executive based in San Francisco for Bloomberg New Energy Finance (BNEF), Glen sets the prominent industry analyst firm’s global service, analysis and customer strategies. He also leads its business relationships with organizations including Chevron, General Electric and Google.
The image of the ‘home’ is central to family businesses, beyond its obvious role as the mooring ground for generations of entrepreneurs. Entrepreneurs often find it difficult to keep home and business apart—which is why the story of a home that is itself the business can offer many fascinating lessons. The Biltmore Estate, America’s largest private home and a National Historic Landmark, is today an 8,000-acre, 1,800-employee enterprise, run by a fourth-generation family hand. The estate defies an old myth—that family businesses don’t last beyond three generations. Evolving from just a tourist attraction to a luxury hotel, a winery, a home products line and an equestrian center, Biltmore has been a celebrated model of sustainable growth held together by a strong family anchor over nearly twelve decades. This article explores Biltmore’s mix of family-led and professional management, and how the grand estate is gearing up for the future.
The COVID-19 financial downturn will have short- and long-term effects on personal and consumer finance, as explored by a panel of Kenan Institute-convened experts during a press briefing held yesterday. The full recording of this briefing—along with a deeper-dive analysis on the specific implications of the downturn on personal retirement income by Kenan Institute Executive Director Greg Brown, is available in this week’s Kenan Insight.
Governors across the United States have reacted to the COVID-19 pandemic by implementing state-level executive actions to address a range of issues provoked by the crisis. Although it is too early to gauge the long-term effects of the pandemic and states’ responses to it, this Kenan Insight provides a preliminary analysis of actions governors have taken thus far, to help inform policymaking going forward. This briefing features CREATE Director and UNC Kenan-Flagler Professor Maryann Feldman, Rethinc. Labs Faculty Director and UNC Kenan-Flagler Professor Eric Ghysels, UNC-Chapel Hill Political Science Professor Christopher Clark and North Carolina Department of Health and Human Services Deputy Secretary Kody Kinsley.