http://repub.eur.nl/res/concept/jel-L81/ Recent publications classified by JEL Code L81 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/32154/ 2011-09-01T00:00:00Z Dual distribution in franchising is addressed from an incomplete contracting perspective. We explicitly model cooperative (dual distribution) franchising as an organizational form, next to wholly-owned, wholly-franchised, and dual distribution franchise systems. Key conclusions of the model are: (1) dual distribution as an efficient governance mechanism does not depend on heterogeneous downstream outlets, and (2) whether dual distribution or some other organizational form is efficient depends on the size of the benefits to dual distribution relative to the parties' costs of investing. Hendrikse, G.W.J. Jiang, T. http://repub.eur.nl/res/pub/19532/ 2010-05-19T00:00:00Z Over the past two decades the internet has rapidly become an important medium to retrieve information, maintain social contacts, and to do online shopping. The latter has some important advantages over traditional shopping. Products are often cheaper on the internet, internet companies sell a wider collection of products and consumers can buy items whenever they like without leaving their homes. On the other hand, the current state of online shops still has two major disadvantages over `real' shops: Products are often much harder to find than in traditional shops and there are no salesmen to advise the customers. In this thesis, we address both these disadvantages. We introduce and evaluate several new user interfaces for online shops that are based on representing products in maps instead of lists to user, such that products are easier to find. In these maps similar products are located close to each other. To create these maps, statistical techniques such as multidimensional scaling are used. Furthermore, we combine these maps with recommender systems to address the second disadvantage and to help the user in finding the product best suiting her needs. Also, we introduce a recommender system that is able to explain the recommendations it gives to users. We think that the methods discussed in this thesis can form a basis for new promising online shopping interfaces both in research as in practice. Kagie, M. http://repub.eur.nl/res/pub/18463/ 2010-03-02T00:00:00Z This paper studies the adoption times of various e-business technologies in a large sample of firms from 10 different industry sectors and 25 European countries between 1994 and 2002. The results show that the probability of adoption increases with the number of previously adopted e-business technologies. Hence, the more advanced a firm is in using e-business technologies, the more likely it is to adopt additional e-business technologies, provided technologies do not substitute each other in their functionalities. This result is relevant for the marketing of new technologies, strategic planning and, from an economic perspective, for the convergence of growth across regions. Koellinger, Ph.D. Schade, C. http://repub.eur.nl/res/pub/17492/ 2009-11-10T00:00:00Z This paper studies asymmetric price responses of individual firms, via daily retail prices of almost all gasoline stations in the Netherlands and suggested prices of the five largest oil companies over more than two years. I find that 38% of the stations respond asymmetrically to changes in the spot market price. Hence, asymmetric pricing is not a feature of the market as a whole, but of individual firms. For asymmetrically pricing stations, the asymmetry is substantial directly after a change but disappears after one or two days. I study station-specific characteristics and conclude that asymmetric pricing seems to be a phenomenon that is randomly distributed across stations. I also find that none of the five largest oil companies adjust their suggested prices asymmetrically. Faber, R.P. http://repub.eur.nl/res/pub/15412/ 2009-04-07T00:00:00Z We address the value of RFID technology enabled information to manage perishables in the context of a supplier that sells a random lifetime product subject to stochastic demand and lost sales. The product's lifetime is largely determined by the time and temperature history in the supply chain. We compare two information cases to a Base case in which the product's time and temperature history is unknown and therefore its shelf life is uncertain. In the first information case, the time and temperature history is known and therefore the remaining shelf life is also known at the time of receipt. The second information case builds on the first case such that the supplier now has visibility up the supply chain to know the remaining shelf life of inventory available for replenishment. We formulate these three different cases as Markov decision processes, introduce well performing heuristics of more practical relevance, and evaluate the value of information through an extensive simulation using representative, real world supply chain parameters. Ketzenberg, M.E. Bloemhof-Ruwaard, J.M. http://repub.eur.nl/res/pub/15142/ 2009-03-08T00:00:00Z Traditionally, recommender systems present recommendations in lists to the user. In content- and knowledge-based recommendation systems these list are often sorted on some notion of similarity with a query, ideal product specification, or sample product. However, a lot of information is lost in this way, since two even similar products can differ from the query on a completely different set of product characteristics. When using a two dimensional, that is, a map-based, representation of the recommendations, it is possible to retain this information. In the map we can then position recommendations that are similar to each other in the same area of the map. Both in science and industry an increasing number of two dimensional graphical interfaces have been introduced over the last years. However, some of them lack a sound scientific foundation, while other approaches are not applicable in a recommendation setting. In our chapter, we will describe a framework, which has a solid scientific foundation (using state-of-the-art statistical models) and is specifically designed to work with e-commerce product catalogs. Basis of the framework is the Product Catalog Map interface based on multidimensional scaling. Also, we show another type of interface based on nonlinear principal components analysis, which provides an easy way in constraining the space based on specific characteristic values. Then, we discuss some advanced issues. Firstly, we discuss how the product catalog interface can be adapted to better fit the users' notion of importance of attributes using click stream analysis. Secondly, we show an user interface that combines recommendation by proposing with the map based approach. Finally, we show how these methods can be applied to a real e-commerce product catalog of MP3-players. Kagie, M. Wezel, M.C. van Groenen, P.J.F. http://repub.eur.nl/res/pub/15029/ 2009-03-02T00:00:00Z This paper discusses how a manufacturer and its retailers interact with each other to optimize their product marketing strategies, platform product configuration and inventory policies in a VMI (Vendor Managed Inventory) supply chain. The manufacturer procures raw materials from multiple suppliers to produce a family of products sold to multiple retailers. Multiple types of products are substitutable each other to end customers. The manufacturer makes its decision on raw materials’ procurement, platform product configuration, product replenishment policies to retailers with VMI, price discount rate, and advertising investment to maximize its profit. Retailers in turn consider the optimal local advertising and retail price to maximize their profits. This problem is modeled as a dual simultaneous non-cooperative game (as a Nash game) model with two sub-games. One is between the retailers serving in competing retail markets and the other is between the manufacturer and the retailers. This paper combines analytical, iterative and GA (genetic algorithm) methods to develop a game solution algorithm to find the Nash equilibrium. A numerical example is conducted to test the proposed model and algorithm, and gain managerial implications. Yu, Y. Huang, G.Q. http://repub.eur.nl/res/pub/14615/ 2009-01-30T00:00:00Z A warehouse needs to have sufficient open locations to be able to store incoming shipments of various sizes. In combination with ongoing load retrievals open locations gradually spread over the storage area. Unfavorable positions of open locations negatively impact the average load retrieval times. This paper presents a new method to manage these open locations such that the average system travel time for processing a block of storage and retrieval jobs in an automated warehousing system is minimized. We introduce the effective storage area (ESA), a well-defined part of the locations closest to the depot; where only a part of the open locations –the effective open locations-, together with all the products, are stored. We determine the optimal number of effective open locations and the ESA boundary minimizing the average travel time. Using the ESA policy, the travel time of a pair of storage and retrieval jobs can be reduced by more than 10% on average. Its performance depends hardly on the number or the sequence of retrievals. In fact, in case of only one retrieval, applying the policy leads already to beneficial results. Application is also easy; the ESA size can be changed dynamically during storage and retrieval operations. Yu, Y. Koster, M.B.M. de http://repub.eur.nl/res/pub/14529/ 2009-01-13T00:00:00Z Many of the challenges in spare parts logistics emerge due to the combination of large service networks, and sporadic/slow-moving demand. Customer heterogeneity and stringent service deadlines entail further challenges. Meanwhile, high revenues rates in service operations motivate companies to invest and optimize the service logistics function. An important aspect of the spare parts logistics function is its ability to support customer-specific requirements with respect to service deadlines. To support customer specific operations, many companies are actively maintaining and utilizing installed base data during forecasting, planning and execution stages. In this paper, we highlight the potential economic value of installed base data for spare parts logistics. We also discuss various data quality issues that are associated with the use of installed base data and show that planning performance depends on the quality dimensions. Jalil, M.N. Zuidwijk, R.A. Fleischmann, M. Nunen, J.A.E.E. van http://repub.eur.nl/res/pub/13615/ 2008-10-24T00:00:00Z This study contributes to the retail adoption literature by explicitly focusing on the role of both profit-related and relationship variables in explaining new product adoption decisions by retailers, instead of considering either one of these groups of variables in isolation as has been done by previous retail adoption studies. Moreover, it specifically addresses how both relationship quality and a retailer’s dependence on the manufacturer moderate the effect of profit drivers. Using a sample of 392 new product adoption decisions by four Dutch retailers, the authors estimate a random effects logit model to explain adoption decisions. The results show significant positive main effects of gross margin, consumer support, product uniqueness, relationship quality and the retailer’s dependency on the manufacturer on the adoption decision. Moreover, the authors find that improved relationship quality tends to reduce the importance of both gross margin and consumer support in the adoption decision process, but surprisingly leads to a stronger impact of trade support. The moderating effect of the retailer’s dependence on the manufacturer also differs between profit drivers, such that it decreases the positive impact of gross margin, consumer support and product uniqueness, and it increases the negative effect of store brand cannibalization. Everdingen, Y.M. van Sloot, L.M. Verhoef, P.C. http://repub.eur.nl/res/pub/13556/ 2008-06-01T00:00:00Z This review addresses supply chain management issues specific to Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and corresponding quantitative models. Our objective is to twofold, namely to enhance the understanding of multi-channel e-fulfillment by documenting the current state of affairs, and to inspire fruitful future research by identifying gaps between relevant managerial issues and available academic literature. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’ – the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies must master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operation decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering. Agatz, N.A.H. Fleischmann, M. Nunen, J.A.E.E. van http://repub.eur.nl/res/pub/10769/ 2007-12-06T00:00:00Z We study the performance of sales forecasts which linearly combine model-based forecasts and expert forecasts. Using a unique and very large database containing monthly model-based forecasts for many pharmaceutical products and forecasts given by thirty-seven different experts, we document that a combination almost always is most accurate. When correlating the specific weights in these "best" linear combinations with experts' experience and behaviour, we find that more experience is beneficial for forecasts for nearby horizons. And, when the rate of bracketing increases the relative weights converge to a 50%-50% distribution, when there is some slight variation across forecasts horizons. Franses, Ph.H.B.F. Legerstee, R. http://repub.eur.nl/res/pub/10462/ 2007-08-21T00:00:00Z For the purpose of explaining governance structure variety in franchising, we explore the impact of governance structure on the incentives to invest in specific assets for the franchisor as well as the distributors. Wholly-owned, wholly-franchised, and mixed (dual distribution) franchise systems are considered. Circumstances are identified when a dual distribution governance structure uniquely allocates efficient ownership over assets. Whether dual distribution benefits are realized in a franchise or a cooperative franchise depends on whether most value is added upstream or downstream. A disadvantage of a dual distribution system is the deterioration of the investment incentives of the party having no authority, i.e. either the company-owned outlet manager in a traditional franchise or the franchisor in a cooperative franchise. A wholly-franchised system may therefore be efficient even when unique dual distribution benefits are present. A necessary condition for the efficiency of a dual distribution governance structure is a positive systemic effect, not the value of the brand name or location (or other) differences between outlets. Hendrikse, G.W.J. Jiang, T. http://repub.eur.nl/res/pub/7901/ 2006-08-22T00:00:00Z This review addresses the specific supply chain management issues of Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and reviews corresponding quantitative models. In this way, we aim to enhance the understanding of multi-channel e-fulfillment and to identify gaps between relevant managerial issues and academic literature, thereby indicating directions for future research. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’, the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies need to master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operations decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering. Agatz, N.A.H. Fleischmann, M. Nunen, J.A.E.E. van http://repub.eur.nl/res/pub/7632/ 2006-03-27T00:00:00Z Allocating the proper amount of shelf space to stock keeping units [SKUs] is an increasingly relevant and difficult topic for managers. Shelf space is a scarce resource and it has to be distributed across a larger and larger number of items. It is in particular important because the amount of space allocated to a specific item has a substantial impact on the sales level of that item. This relation between shelf space and sales has been widely documented in the literature. However, besides the amount of space, the exact location of the SKU on the shelf is also an important moderator of sales. At the same time, the effectiveness of marketing instruments of an SKU may also depend on the shelf layout. In practice, retailers recognize that these dependencies exist. However, they often revert to rules of thumb to actually arrange their shelf layout. We propose a new model to optimize shelf arrangements in which we use a complete set of shelf descriptors. The goal of the paper is twofold. First of all, we aim to gain insight into the dependencies of SKU sales and SKU marketing effectiveness on the shelf layout. Second, we use these insights to improve the shelf layout in a practical setting. The basis of our model is a standard sales equation that explains sales from item-specific marketing-effect parameters and intercepts. In a Hierarchical Bayes fashion, we augment this model with a second equation that relates the effect parameters to shelf and SKU descriptors. We estimate the parameters of the two-level model using Bayesian methodology, in particular Gibbs sampling. Next, we optimize the total profit over the shelf arrangement. Using the posterior draws from our Gibbs sampling algorithm, we can generate the probability distribution of sales and profit in the optimization period for any feasible shelf arrangement. To find the optimal shelf arrangement, we use simulated annealing. This heuristic approach has proven to be able to effectively search an enormous solution space. Our results indicate that our model is able to fit and forecast the sales levels quite accurately. Next, when applying the simulated annealing algorithm to the shelf layout, we appear to be able to increase profits for all the stores analyzed. We compare our approach to commonly used shelf optimization rules of thumb. Most sensible rules of thumb also increase expected profits (although not as much as our optimization algorithm). In particular, it is beneficial to put high-margin items close to the beginning of the aisle (or the “racetrack"). Finally, we provide managerial implications and directions for further research. Nierop, J.E.M. van Fok, D. Franses, Ph.H.B.F. http://repub.eur.nl/res/pub/7090/ 2005-11-16T00:00:00Z Local governments in Western Europe increasingly use city time-access regulations to improve social sustainibility. These regulations significantly influence the distribution process of retail chain organizations. This paper studies the impact of governmental timewindow pressure on retailers’ logistical concept and consequential financial and environmental distribution performance. We determine which dimensions in the retailer’s logistical concept determine its cost and emission sensitivity to increasing time-window pressure. Our research is based on a multiple case study of fourteen Dutch retail cases in different sectors and with different store formulas. The retailers provided all organizational, flow and cost data of their secondary distribution (between distribution center and stores). We use these data to calculate the impacts of different time-window pressure scenarios, including the current situation, using vehicle routing software. It appears that cost increases are moderate, when few cities are affected. However, as more cities are affected, costs increase considerably, particularly if time-window lengths become shorter. Time-windows harmonized between cities, lead to less negative effects. We find various dimensions that contribute to reducing the retailer’s sensitivity to timewindow pressure. We formulate conclusions hypothesizing the links between timewindow pressure, its effects, and the dimensions that determine these effects. Quak, H.J. Koster, M.B.M. de http://repub.eur.nl/res/pub/6924/ 2005-09-14T00:00:00Z An important development that contributes to store brands’ growing success in the grocery market is the increasing number of discount stores that sell predominantly own, private-label, brands. To fight private labels, manufacturers of national brands feel increasingly compelled to develop better trade relations with discounters. Some discounters, from their part, are looking for opportunities to differentiate themselves, and to move beyond a pure price-based competition, by extending their assortment with attractive national brands. In this study, we determine what factors drive national-brand success at discount stores, and lead to positive outcomes for both the manufacturer and the discounter. Deleersnyder, B. Dekimpe, M.G. Steenkamp, J-B.E.M. Koll, O. http://repub.eur.nl/res/pub/6555/ 2005-05-18T00:00:00Z In this study we consider a pick-to-pack orderpicking system, in which batches of orders are picked simultaneously from different(work) zones by a group of order pickers. After picking, the orders are transported by a conveyor to the next station for packing. Our aim is to determine the optimal number of zones such that the overall (picking and packing) time to finish a batch is minimized. We solve this problem by optimally assigning items to pick routes in each zone. We illustrate the method with data taken from a distribution center of one of the largest online retailers in the Netherlands. Le-Duc, T. Koster, M.B.M. de http://repub.eur.nl/res/pub/1581/ 2004-09-10T00:00:00Z In most western countries, grocery retailers are faced with maturing domestic markets with a year-to-year sales growth close to zero. Moreover, most Western-European markets are characterized by a high concentration rate, with a combined market share of the top five players easily exceeding 70%. One important outcome of this evolution has been a growing interest in cross-border initiatives. However, even though the industry gained importance, retailers are still struggling to develop the competencies to compete and survive in this new, more global, arena. In this paper, we study entry investments into Central and Eastern-European transition economies to unveil when, to what extent, and to which retailer the strategic window in these different markets opens. We develop and empirically test a set of hypotheses on factors that affect (1) the speed (timing) and (2) size of retailers’ decisions to enter Central and Eastern European markets. A conceptual framework is proposed which looks at strategic decisions through the option lens. This perspective offers an economic rationale for the behavioral process of major resource allocations. The resulting hypotheses are tested, using a joint hazard/poisson-regression framework, on a data set covering all entry decisions of the top 75 European grocery retailers towards Central and Eastern Europe. We find that in these transition economies important legitimization effects can be derived from rivals’ actions. Especially the moves, made and anticipated, by home rivals are carefully monitored. This reflects the idea that retailers are motivated not only by the chance of creating value in these new markets, but also by the fear of being left out. Gielens, K. Dekimpe, M.G. http://repub.eur.nl/res/pub/1845/ 2004-01-01T00:00:00Z Recently, retailers have begun considering which brands they can delist without reducing customer satisfaction, losing category sales, or increasing store switching behavior. Although several studies have considered assortment reductions, none has explicitly investigated the impact of total brand delistings. Therefore, the authors study the impact of brand delistings on assortment evaluations and store switching and complaining intentions. They execute both a controlled experiment and a survey and find that brand delisting mainly has negative consequences when the delisted brands have high equity, assortment size is limited, the assortment consists of a low proportion of high-equity brands, and the brand delistings take place in categories with high hedonic levels. The authors discuss the theoretical and managerial implications of these findings. Sloot, L.M. Verhoef, P.C.