Consumer-Driven Demand and Operations Management Models (eBook)

Preface 6
References 8
Introduction 9
Overall Structure 10
Chapter Highlights 10
References 13
Acknowledgments 14
Contents 15
Rational Consumer Behavior: Endogenous Decision Making Mechanisms 23
Cheap Talk in Operations: Role of Intentional Vagueness 24
1.1 Introduction 25
1.2 Classical Cheap Talk Game 27
1.3 Service Application 29
1.4 Retail Application 39
1.5 Summary 52
1.6 The Past and the Future 53
References 56
Product Design in a Market with Satisficing Customers 58
2.1 Introduction 58
2.2 Literature Survey 63
2.3 Applications and Variations to Basic Model 64
2.4 Analysis of General Model 68
2.5 Extensions 72
2.6 Concluding Remarks: Satisficers vs. Utility Maximizers 76
2.7 Proofs 77
References 81
The Effect of Assortment Rotation on Consumer Choice and Its Impact on Competition 84
3.1 Introduction 84
3.2 Literature Review 88
3.3 The Multi-period Utility Model with Satiation 90
3.4 Competing on Assortment Rotation 92
3.5 Conclusions 98
References 99
Models of Herding Behavior in Operations Management 101
4.1 Introduction 102
4.2 Related Literature 105
4.3 Herding in a Single Queue 106
4.4 Herding and Queue Selection 111
4.5 Discussion and Further Research Opportunities 127
References 131
Organizational Strategies for Managing Rational/ Strategic Consumer Behavior 133
Internet-Based Distribution Channel for Product Diversion with Potential Manufacturer's Intervention 134
5.1 Introduction 135
5.2 Literature Review 138
5.3 Problem Description 140
5.4 Retailer-Only Secondary Market 142
5.5 ManufacturerÌs Intervention 146
5.6 Discussion and Conclusion 160
5.7 Appendix 163
References 172
Managing Client Portfolio in a Two-Tier Supply Chain 174
6.1 Introduction 174
6.2 Literature Review 177
6.3 The Basic Model 179
6.4 The Bullwhip Effect with Multiple Clients 180
6.5 Client Portfolio 182
6.6 Conclusion 183
Appendix 185
References 195
Strategic Customer Behavior and the Benefit of Decentralization 196
7.1 Introduction 196
7.2 Durable Goods 197
7.3 Perishable Goods 205
7.4 Conclusion and Future Research 215
Appendix 217
References 220
Product Strategies for Managing Rational/ Strategic Consumer Behavior 221
Is Assortment Selection a Popularity Contest? 222
8.1 Introduction 223
8.2 Literature Review 224
8.3 Models 225
8.4 Analytical Results and Numerical Observations 232
8.5 Concluding Remarks 243
References 244
Product Design, Pricing, and Capacity Investment in a Congested Production System 246
9.1 Introduction 246
9.2 Literature Review 248
9.3 Basic Model and Assumptions 250
9.4 Quadratic Cost Functions 251
9.5 General Power Cost Functions 255
9.6 Conclusions and Current Research 258
Appendix 260
References 268
Selling to Strategic Customers: Opaque Selling Strategies 269
10.1 Introduction 269
10.2 Literature Review 273
10.3 FirmÌs Selling Strategies Under Deterministic Demand 279
10.4 Modeling Uncertain Demand: The Effect of Uncertainty on Opaque Selling Strategies 287
10.5 Other Related Considerations and Future Research 295
10.6 Appendix A: Deterministic Demand 298
10.7 Appendix B: Uncertain Demand 308
References 315
Competing Through Mass Customization 317
11.1 Introduction 318
11.2 Model 321
11.3 Pricing Game 323
11.4 The Adoption Game 325
11.5 MC vs. Traditional Approach 327
11.6 Comparative Statics: Conditions Favoring MC 330
11.7 Concluding Remarks 332
References 334
Operational Strategies for Managing Rational/ Strategic Consumer Behavior 337
Counteracting Strategic Consumer Behavior in Dynamic Pricing Systems 338
12.1 Introduction 338
12.2 The Effectiveness of Price Segmentation in Face of Strategic Customers 339
12.3 Price Commitments 348
12.4 Capacity Rationing 349
12.5 Internal Price-Matching Policies 358
12.6 Limiting Inventory Information 366
References 366
Mitigating the Adverse Impact of Strategic Waiting in Dynamic Pricing Settings: A Study of Two Sales Mechanisms 368
13.1 Introduction 368
13.2 Model Preliminaries 370
13.3 Two Inventory Display Formats 371
13.4 Two Operating Regimes 379
13.5 Conclusions 384
References 384
The Impact of Strategic Consumer Behavior on the Value of Operational Flexibility 386
14.1 Introduction 387
14.2 Modeling Traditional and Flexible Production 388
14.3 Modeling Strategic Consumer Purchasing 390
14.4 Equilibrium Analysis 393
14.5 The Value of Flexibility 397
14.6 Extensions and Complications 405
14.7 Conclusions 409
References 409
Capacity Rationing with Strategic Customers 411
15.1 Introduction 412
15.2 Capacity Rationing Under Rational Expectations 414
15.3 Capacity Rationing When Customers Learn 423
15.4 Relation to Rational Expectation Equilibrium 431
15.5 Conclusions 432
References 433
Pricing Strategies for Managing Rational/ Strategic Consumer Behavior 434
Shaping Consumer Demand Through the Use of Contingent Pricing 435
16.1 Introduction 435
16.2 Contingent Pricing 437
16.3 Contingent Pricing with Strategic Consumers 438
16.4 Conclusion 444
Appendix 445
References 446
Strategic Consumer Response to Dynamic Pricing of Perishable Products 447
17.1 Introduction 447
17.2 Literature Review 449
17.3 Strategic Consumer Behavior 451
17.4 Simulation Results 456
17.5 Extensions 461
17.6 Conclusions and Future Research 464
Appendix 465
References 469
Strategic Behavior in Supply Chains: Information Acquisition 471
18.1 Introduction 472
18.2 Motivating Example: Costume Gallery 473
18.3 Literature Review 476
18.4 Independent Retailers and Products 477
18.5 Advance Purchase Discounts: Risk Sharing and Supply Chain Performance 482
18.6 Application at Costume Gallery 484
18.7 Conclusions and FutureWork 488
References 488
Index 490