The Optimum Size of a Producer Service Firm Facing Uncertain Demand

1998 ◽  
Vol 30 (1) ◽  
pp. 129-141 ◽  
Author(s):  
D Phillips ◽  
A D MacPherson ◽  
B Lentnek
Keyword(s):  
General Model ◽  
Manufacturing Sector ◽  
Scale Economies ◽  
Comparative Statics ◽  
Uncertain Demand ◽  
Optimum Size ◽  
Maintenance And Repair ◽  
Service Firm ◽  
Producer Service ◽  
Service Location

In this paper we present a theory of optimum size and number of clients for a producer service firm performing maintenance and repair services for clients in the manufacturing sector. The theory holds that scale economies vary directly with the level of contact requirements for service delivery. This is illustrated by a model of a monopoly repair specialist in which frequency of breakdown (and therefore client demand for service) is stochastic. Comparative statics are used to draw testable hypotheses from the model which, if extended to a multisite case, may serve as a portion of a general model of producer service location.

Optimum Producer-Service Location

1992 ◽  
Vol 24 (4) ◽  
pp. 467-479 ◽  
Author(s):  
B Lentnek ◽  
A MacPherson ◽  
D Phillips
Keyword(s):  
Service Provision ◽  
Manufacturing Sector ◽  
Profit Maximization ◽  
Producer Services ◽  
Industrial Firms ◽  
Producer Service ◽  
Vertical Disintegration ◽  
Locational Behavior ◽  
Service Location

Presented in this paper is a formal economic model that identifies the optimal intraurban location for a producer-service vendor that caters to the technical needs of spatially dispersed clients in the manufacturing sector. Two major components are incorporated into the model. The first of these describes the oft-cited externalization process among industrial firms, where in-house service provision is selectively abandoned in favor of out-sourcing. The second component describes a vendor location process based on profit maximization, where buyers and sellers are optimally located relative to one another. Normative modeling propositions are then compared with current empirical streams in the literature on producer-service location, the role of manufacturing demand, and the process of selective vertical disintegration among industrial firms. The paper is concluded with a brief research agenda for modeling the intraurban locational behavior of specialist firms in the producer services.

The Location of Services Involved with International Trade

1987 ◽  
Vol 19 (5) ◽  
pp. 687-700 ◽  
Author(s):  
K O'Connor
Keyword(s):  
Physical Activity ◽  
Communication Technology ◽  
Port Development ◽  
Large Cities ◽  
Producer Service ◽  
The Usa ◽  
Service Location ◽  
Statistical Record ◽  
Selection Of

Services that link buyer and seller across nations and continents have long been a part of city and port development, but have not attracted much research interest, perhaps because they remain (like their statistical record) ‘invisible’. Technical and structural change in the organisation of shipping, reflected largely in containerisation, have changed the context for these services and they have responded in a variety of ways. Data in this paper trace the location of a selection of these services in the USA and Australia, indicating a separation between services and negotiations on aspects of trade services, and new patterns of physical activity in trade. It is suggested that this separation may be facilitated by the standardisation that has come with containerisation, the importance of intercorporate linkages, the role of official markets, and the application of modern communication technology. These aspects account for the clustering of services in large cities and their separation from day-to-day trade business, and could provide insights for producer-service location in general. The paper indicates the need for survey work to test these ideas.

Servicing Our Economy: Producer Service Location and Government Procurement 2004-2010 in the Washington DC Metropolitan Area

2016 ◽  
Vol 47 (4) ◽  
pp. 631-647 ◽  
Author(s):  
S. C. Christopher ◽  
R. D. Vese ◽  
M. A. Boyd ◽  
A. D. Reddy ◽  
A. P. Mulhollen ◽  
...  
Keyword(s):  
Metropolitan Area ◽  
Government Procurement ◽  
Washington Dc ◽  
Producer Service ◽  
Service Location

Raising Productivity in a Service Organisation: The Role of Pace and Customer Participation

Paradigm ◽  
1998 ◽  
Vol 1 (2) ◽  
pp. 70-77
Author(s):  
Rakesh Singh
Keyword(s):  
Service Sector ◽  
Service Providers ◽  
Manufacturing Sector ◽  
Customer Participation ◽  
Service Firm ◽  
General Management ◽  
Time Consciousness ◽  
Service Organisation ◽  
Made In

One of the complaints against the service sector is that it is comparatively inefficient and that it yields a lower rate of productivity vis a vis the manufacturing sector. The service providers contend this mainly with the argument that their services are as against products, more 'Person-dominant' and that a significant part of service benefit can never be pre-engineered in the workshop. Often a service is 'produced' in interaction with its customers. By extension, therefore, the burden of raising productivity in service sector is not entirely in the hands of service marketers. The author, with his views on customized and general management programmes on service and satisfaction, offers a solution towards raising productivity in a service firm. He invokes the concept of pace (speed or time consciousness) and customer participation (or using the customer participation (or using the customer as a fellow producer of the service) and marshals both the forces to enhance the general productivity of the service firm. Several suggestions are made in this respect.

Endogenous Investment and Pricing under Uncertainty

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
David Young
Keyword(s):  
Pure Strategy ◽  
Comparative Statics ◽  
Uncertain Demand ◽  
Differentiated Products ◽  
Cournot Model ◽  
Production Capacities

I analyze investment and pricing incentives in a differentiated products framework with uncertain demand. Firms choose production capacities before observing demand and choose prices after demand is realized. Unlike previous models, when firms are identical, symmetric pure-strategy equilibria exist, even in the presence of very low capacity costs. The equilibrium outcomes are significantly different from the equivalent Cournot model. Firms choose to underutilize their capacity at times of low demand, and hold more capacity than predicted by Cournot. I show with a simple policy example that even the sign of the comparative statics may differ between the two models.

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