International Journal of Management and Decision Making (12 papers in press)
- Transshipment problem with fuzzy customer demands and fuzzy inventory costs
by Mohamed HMIDEN, Lamjed Ben SAID, Khaled GHEDIRA
Abstract: We consider a supply chain consisting of a supplier and locations selling an innovative product. These locations could collaborate together by transshipment which is known as product transferring adopted mainly to reduce inventory costs and to improve customer service level. In this research, we are interested in the transshipment problem where the customer demands, the holding and the shortage costs are uncertain and represented by fuzzy sets. Our objectives are to propose a transshipment policy that takes into account the fuzziness of the mentioned parameters and to derive the approximate replenishment quantities. In order to achieve these objectives, we propose a transshipment decision process considering decision makers attitudes towards risks and a hybrid algorithm based on fuzzy simulation and genetic algorithm designed to determine the approximate replenishment quantities.
Keywords: Transshipment problem, uncertain environment, fuzzy customer demands, fuzzy holding and shortage costs, decision making under risk, fuzzy simulation, genetic algorithm
- Rapid productisation as a strategic choice in small- and medium -sized companies
by Kai Hänninen, Ville Isoherranen, Tuomo Kinnunen, Harri Haapasalo
Abstract: The objective of this study was to describe how rapid productisation (RP) can be used as a strategic choice for small- and medium -sized enterprises (SME). This study attempts to offer insight regarding how a given strategy and competitive situation forces companies to make decisions to abandon formal predetermined procedures. This case study examines the RP concept through the clarification of business case objectives set to start RP, it scrutinises the use of RP as a strategic decision in the case of SMEs. The study presents enablers for RP, the objectives for RP and RP as a strategic choice. In addition, it provides support for the managers of SMEs in considering RP as a revenue making option. Planned and intentional RP allows a company to react on customer expectations without unnecessarily expanding the company offerings. RP is a new concept originating from practical challenges in sales situations.
Keywords: Strategy; productisation; rapid productisation; case study; value creation; decision-making.
- DECISION MAKING REGARDING INFORMATION SHARING IN COLLABORATIVE RELATIONSHIPS UNDER AN MCDA PERSPECTIVE
by Patricia Guarnieri
Abstract: Selecting appropriate partners, considering the strategic nature of decisions related to information sharing in partnerships, is essential. Considering this fact, the main objective of this paper is to propose a general and systematic model related to decisions of suppliers management. The model is focused in the strategic decision of partners choice for information sharing, under a MCDA perspective. Aiming illustrate the use of the model, it was presented a numerical application based on real characteristics from Brazilian automotive industry. Then, it was verified that is possible the suppliers categorization in levels of collaboration driving suitable suppliers to share information in appropriate ways. The model differentiates those found in supplier selection literature because it includes soft factors, which are more appropriated in collaborative relationships in SCM.
Keywords: Collaboration,Collaborative relationships; Decision making; Information sharing, Information system, Information technology, MCDA, Multiple criteria decision making, Partnerships, Strategic alliances, Supplier selection problem.
- Relevant information, personality traits and anchoring effect.
by Andrea Caputo
Abstract: Although personality has been one of the most-studied factors in management and decision-making research, this stream of research has generated inconsistent support for the relationship between personality traits and individuals susceptibility to heuristics, and therefore biased judgment. The aim of this study is to investigate how the provision of correct information and individual difference factors influence susceptibility to anchoring effect. To test this hypothesis, individual levels of the personality traits have been measured. Then, participants were provided with an anchoring task involving the Taj Mahal either providing them correct information before the experiment or not. Providing individuals with the correct information limited susceptibility to the irrelevant anchor; even if only 33 % of those exactly recalled it when providing the estimate. High values in agreeableness and openness to experience were found to be related with reduced susceptibility to the anchor.
Keywords: anchoring, personality traits, judgment, Big-Five.
- Enhancing Conflict Resolution through an AHP-Based Methodology
by Roberta Costa, Marco Greco, Maria Assunta Barchiesi
Abstract: Opposing interests, bounded rationality and decisional bias may severely hinder conflict resolution. When the commitment for an agreement is high, opponents can resort to the intervention of a third party, such as a mediator. We propose a methodology to enhance conflict resolution, which is based on the Analytic Hierarchy Process (AHP) and takes into account the psychological attitudes of the conflicting parties. The AHP Technique for Highly Eligible Negotiation Agreements (ATHENA) supports a third party in selecting, among potential negotiation agreements, those proposals having the best chances to be accepted by adverse parties. We illustrate an implementation of ATHENA that involved 160 students simulating "Union versus Management" negotiations. A control group of 40 couples negotiated without any Decision Support System, while the other 40 couples were supported by ATHENA. The results show that the procedure implementation outperformed unsupported negotiation by increasing the number and the fairness of agreements.
Keywords: Analytic Hierarchy Process (AHP); Negotiation; Conflict Resolution; Decision Making; Experimental Economics; Role Playing; Decision Support System.
- A Genetic Algorithm to Solve Process Layout Problem
by Kaveh Khalili-Damghani, S. M. Ali Khatami-Firouzabadi, Mohammad Diba
Abstract: A model based on a quadratic assignment problem (QAP) is proposed to design a process layout. The objective function of proposed model has three main parts, as (a) maximizing the profit of each product, (b) minimizing stored keeping materials, and (c) minimizing total layout cost. The demand requirement and production capacity are also considered as set of constraints. Eventually, as the global optimum solution is hard to find for the proposed model, a genetic algorithm (GA) is proposed to solve the model. The performance of proposed GA was compared with other well-known algorithms , i.e., simulated annealing (SA) algorithm and Tabu search (TS) on several benchmark instances of QAP as well as a series of simulated random large scale instances. The comparison reveals the promising results of GA over SA, and TS.
Keywords: Process layout design; Quadratic assignment problem; Genetic algorithm; Simulated annealing; Tabu search
- A multicriteria fuzzy method for selecting the location of a solid waste disposal facility
by Anna Corinna Cagliano, Maria Teresa Pilloni, Carlo Rafele
Abstract: Facility location is a multicriteria decision process that has important operational and economic impacts and that typically involves uncertainty and vagueness of evaluations.
A fuzzy-based method supporting preliminary decision-making about siting solid waste incinerators is proposed building on a structured classification of criteria for location selection developed from the existing literature. The application to a case study revealed the advantages of the methodology. The work intends to provide a general and comprehensive taxonomy of decision criteria that may be adapted to various facility location problems together with a fuzzy inference process that is useful for companies and public administration institutions looking for rigorous but relatively simple decision-making tools in uncertain environments. Future research will compare the developed method with the most common tools for making location decisions. The approach will be then extended to different kinds of facilities.
Keywords: strategic planning, facility design, facility location selection, multicriteria decision-making, facility location criteria, fuzzy logic, waste disposal facilities
Special Issue on: "Special issue on Interface between Marketing and Operation Management"
- Decisions of retail channel choices for the traditional retailer competing with a pure play online retailer
by Chao Liu, Ting Zhang, Qinglong Gou, Liang Liang
Abstract: The rapid development of online retailing has promoted some top traditional retailers to implement the brick-and-click strategy by expanding business to online channel. While online channel usually implies lower operation cost, most consumers believe that they will bear disutility cost of purchasing online because of various disadvantages of online shopping. Considering such online disutility cost and the competition from a pure play online retailer, we investigate a traditional retailers decisions on retail channel choices. In detail, we construct competitive pricing games between the traditional retailer and the pure play online retailer by assuming that consumers are heterogeneous in the online disutility cost, and that for each consumer, his online disutility cost from the online branch of the brick-and-mortar store is lower than that from the pure play online store. Equilibrium results show that introducing an online branch helps the traditional retailer improve overall profitability under certain conditions.
Keywords: Retail Channel Choices, Brick-and-Click, Online Channel, Traditional Channel, Pricing Model
- A DEA-based Measurement of Effectiveness of Provincial Image Advertisement for Local Tourism Destination: Evidence from China
by Hua-Qing Wu, Yi-Xian Liu, De-Lin Zhuang, Wei-Dong Zhu
Abstract: Global economic depression makes competition of tourism industry shift from individual tourist attraction to tourism region covering many tourist attractions in order to save operating costs, and regional image advertising of destination has become an important tool to coordinate the operation behaviors among different managers of tourist attractions. However, is the regional image advertising effective? This paper firstly introduces data envelopment analysis (DEA) to evaluate the efficiency of provincial image advertising in China; furthermore, estimates a regression model to identify the impact factors of advertising efficiency. Results show that the overall efficiency of Chinese provincial image advertising is relatively low. In terms of regional distribution, the east and west areas are more efficient than the central. And gross provincial production, the distribution density of scenic spots and marketing size of destination are the important impact factors influencing advertising efficiency, with the former two exerting a significantly positive effect while the latter a negative one.
Keywords: Image Advertising; Tourism Destination; Efficiency Evaluation; Data Envelopment Analysis.
- A Dynamic Pricing Model with Goodwill Influenced by Price-Quality Effect
by Jing Huo, Ting Zhang
Abstract: In this paper, we consider an important phenomenon of price-quality effect in goodwill formulation process, that high price indicates high quality thus has a positive impact on goodwill. Based on the familiar Nerlove-Arrow models, we set up a dynamic model, in which the firm maximizes the profit by setting optimal price and quality, and price-quality effect is considered that high price could increase the sales through enhancing the goodwill if quality has reached a threshold level. Our result shows that (i) in the high quality strategy scenario, the quality is set at the quality threshold of the existence of price-quality effect, and the optimal price is increasing in the degree of price-quality effect and the quality threshold and (ii) in low quality strategy scenario, the quality is set at zero, and the optimal price is decreasing in the quality threshold.
Keywords: Pricing, Quality, Price-quality effect; Nerlove-Arrow mode, Goodwil, Dynamic, Equilibrium, Monopoly
- Effect of New Inflation-Brought Competitive Purchasing and Leasing Demand Functions on Revenue of a Joint Inventory-Pricing Decision Making Model
by Sina Keyhanian, Masoud Rabbani
Abstract: Inflation lessens the purchasing power of money generally leading to reduction in demand for purchasing products. That is also why companies may choose to increase advertising of their products in order to alleviate the shock. This paper considers a new customer reaction to inflation growth and caused advertising policy alteration, namely cautious behavior, according to which customers react differently in the beginning phases of inflation that is they might assume that theres a possibility for the situation to continue getting worse; although it may not, thus they decide to purchase the required products as soon as possible. This leads to an initial demand enhancement, though following a decreasing trend after the prices reach a sufficiently unaffordable level. On the other hand inflation growth increases demand for leasing, which is a suitable option to satisfy needs of products that are to be used only in a specific duration. These assumptions lead to a competition between purchasing and leasing demand for which new exponential functions are designed in this paper and applied to a joint pricing and inventory mathematical model proposed to find the revenue of an integrated finance lease-sales system. Sensitivity and trends of decision variables optimal values are analyzed in terms of caution coefficient and inflation vectors for different numerical examples.
Keywords: Demand Function, Customer Behavior, High Inflation, Finite Pricing, Finance Lease, Mathematical Model, Revenue Management, Engineering Economy, Sensitivity Analysis.
- To Overstate or Not: How to describe new products online for e-tailers considering full return policy
by Wei Xiong, Jin Qin
Abstract: In order to compete with online and offline rivals, e-tailers need to pay specific attention to online product description to attract customers and get their orders. Most e-tailers also provide full return service to lower customers risk perception of online purchase and minimize their possible loss. How to describe product online in consideration of full return policy is a difficult problem for e-tailers since overstatement may increase sales but incur more returns, otherwise the sales may decrease as well as the return cost. In this paper, we study e-tailers optimal description strategy for new products which have low salvage values. Our results indicate that monopoly e-tailer will not overstate in new product description considering the full return policy. In duopoly case, low quality e-tailer will not overstate while high quality e-tailer will do under certain conditions, and high quality e-tailers overstatement will benefit both e-tailers under full return policy.
Keywords: full return policy; overstatement; e-tailing; B2C; online purchase; product description; consumer risk perception; retailer deception.