Impact of non-homogenous distributor's preferred allocation on shortages in hospitals

2014 ◽  
Vol 52 (3) ◽  
pp. 624-641
Author(s):  
Adelina Gnanlet ◽  
Hyun-cheol Paul Choi
Keyword(s):  
Economies Of Scale ◽  
Optimal Allocation ◽  
Programming Model ◽  
Cost Savings ◽  
Price Discount ◽  
Content Type ◽  
Tier Ii ◽  
Numerical Experimentation ◽  
High Penalty ◽  
Tier I

Purpose – Hospitals procure high volumes of medical supplies through large distributors in order to leverage economies of scale. However, when shortages hit, hospitals incur high penalty costs by purchasing from secondary markets. In this paper, the authors counter the hospital's typical purchasing strategy that a collaborative relationship with a large, Tier I medical supply distributor is beneficial under all conditions. The paper finds that during shortages the more beneficial strategy is for the hospital to add a medium-sized, Tier II distributor who offers a transactional relationship and is willing to provide a “preferred allocation” in return for a pre-committed annual purchase contract. The paper aims to discuss these issues. Design/methodology/approach – The authors assume availability of order volume to be a stochastic process and formulate the problem as a two-stage stochastic programming model, with optimal allocation in the second stage. The authors analyze the first-stage objective function using full-factorial numerical experimentation and perform a complete search for optimal volume mix. In addition, the model accounts for purchasing relationship, shortage cost, and varying price discount schedules. Findings – Under no shortage situation, hospitals purchase its entire order volume from Tier I distributor. However, during shortages, for any increase in preferred allocation from the Tier II distributor, hospitals purchase high volumes from the Tier II distributor except when preferred allocation and availability is high. The paper finds that the average cost savings for the use of preferred allocation is 16.14 percent. Originality/value – Existing purchasing literature focusses on the benefit of using single/multiple homogenous distributors under all conditions. In this paper, the authors examine the benefit of using non-homogenous distributors under conditions of shortage when one of them is willing to provide preferred allocation under varying price discount schedules.

A goal programming model to study the impact of R&D expenditures on sustainability-related criteria: the case of Kazakhstan

2020 ◽  
Vol 58 (11) ◽  
pp. 2497-2512 ◽  
Author(s):  
Cinzia Colapinto ◽  
Raja Jayaraman ◽  
Davide La Torre
Keyword(s):  
Optimal Allocation ◽  
Greenhouse Gas Emission ◽  
Programming Model ◽  
Developed Countries ◽  
Sustainable Growth ◽  
Economic Sectors ◽  
Content Type ◽  
Long Run ◽  
Goal Programming Model ◽  
The Impact

PurposeMost countries face important economic, social and environmental challenges and are strongly committed to invest in research and development (R&D) activities to help support the long-run economic sustainable growth. This paper aims to extend the previous research on macro-economic growth models and introduces endogenous variables to determine the amount of investments in R&D activities.Design/methodology/approachThe model considers four different criteria and six economic sectors and aims at finding the optimal allocation of labor across different sectors. The model also endogenously determines the amount of investments in pollution abatement activities together with energy-related R&D efforts. The paper presents an application to the case of Kazakhstan, an emerging Asian country, that aims to become one of the top 30 most developed countries in the world by 2050.FindingsThe model shows the limits of the Kazakh agenda that identified too ambitious goals as the country has to go through a sociotechnical transition that involves a range of modifications in institutional structures, together with changes in user practices and the technological dimension. Kazakhstan should invest more in R&D activities able to develop sustainable energy sources to face the current electricity consumption demand and to reduce the greenhouse gas emission in the future.Originality/valueThe paper provides valuable knowledge for researchers and policy makers interested in the impact of R&D on the long-run economic sustainable growth.

Economies of scale: the case of KiwiSaver fees

2019 ◽  
Vol 31 (4) ◽  
pp. 695-710
Author(s):  
Aaron Gilbert ◽  
Ayesha Scott ◽  
Shuohan Xu
Keyword(s):  
Mutual Funds ◽  
Design Methodology ◽  
Economies Of Scale ◽  
Cost Savings ◽  
Retirement Savings ◽  
Defined Contribution ◽  
Translog Cost Function ◽  
Content Type ◽  
Cent Increase ◽  
Funds Management

Purpose International evidence of economies of scale in mutual funds is mixed. KiwiSaver offers an interesting opportunity to examine economies of scale given its growth from a new scheme with few members and low balances, where fund costs should be high, to a much larger scheme that should be cheaper to run. As a defined contribution superannuation scheme, fees play an important role in determining the eventual retirement savings members achieve. This paper aims to examine whether the anticipated economies of scale are passed onto members. Design/methodology/approach The authors use a sample of 267 KiwiSaver funds over 2013-2018 and relate fund fees to assets under management (AUM) and the number of participants using regression analysis and a translog cost function. Findings The authors find evidence to suggest funds are passing on cost savings. Specifically, the authors observe that fees increase slower as the number of members grows, suggesting economies of scale are driven by the number of members, but not the size of the assets being managed. All else held constant, a 1 per cent increase in fund participants increases fees by 0.93 per cent on average. In contrast, a 1 per cent increase in AUM results in effectively 1 per cent increase in fees, all else held constant. Originality/value While KiwiSaver has been an undeniable boost to the local funds management industry, regulators are increasingly under pressure to ensure fees are appropriate. In 11 years, New Zealand-based KiwiSaver has grown to over $50b in AUM, with over $400m in total fees per year. This paper provides evidence that economies of scale are partially present in the KiwiSaver sector, although not where it arguably counts: in the size of the AUM.

Selling groceries through the cloud in a Tier II city in India

2016 ◽  
Vol 6 (3) ◽  
pp. 1-24
Author(s):  
Sanjay Mohapatra ◽  
Vikram Swain ◽  
Shriram Misra ◽  
Rohit Padhi ◽  
Subhabrata Nath Sharma ◽  
...  
Keyword(s):  
Learning Outcomes ◽  
Inventory Management ◽  
Large Scale ◽  
Economies Of Scale ◽  
Scale Up ◽  
Subject Area ◽  
It Strategy ◽  
Content Type ◽  
Tier Ii ◽  
Score Card

Subject area Information Systems – IT Strategy Design and Implementation. Study level/applicability The case can be discussed in Marketing Management courses and IT Strategy classes in MBA, executives from NGOs who are participating in Management Development Programs, etc. It can also be used in entrepreneurship classes. The case serves as an illustration to entrepreneurship projects, and so this case can be discussed in training program for budding entrepreneurs intending to implement cloud in its IT infrastructure. Case overview E-commerce is big nowadays in India. In e-commerce, particularly e-tail in India is witnessing a boom with players reporting achieving revenue targets earlier than anticipated. Though e-tail sites are now ubiquitous and dime a dozen with multiple offerings or specialized offerings, the e-grocery model is yet to take off on a large scale across India. E-grocery model has its unique challenges on both supply as well as distribution side unlike other e-tail business. As it deals with perishable items, it faces challenges in supply chain, procurement, inventory management, cold storage management, quality and logistics. To solve such problems, high degree of localization is needed for players in this business. It requires them to open up multiple warehouses at strategic locations in a city if they decide to have control over the goods they sell. Start-ups in this space face the problems in monitoring inventory levels across warehouses where they use disparate Point of Sales (POS) systems. There is a lack of synchronization among the POS applications across the warehouses for which they are able to take the benefit of economies of scale during procurement and distribution. Also, they face stock out and excess inventory across stock keeping units (SKUs). To solve this problem, a strategy is needed so that they can maintain data for all its warehouses through a single database and also by which they can scale up easily and at a lower investment without disturbing continuity in business. Expected learning outcomes Following are the learning outcomes: to learn about the business model and market ecosystem of an e-tailing business dealing in grocery items in a tier-II city in its introduction phase of organizational life cycle, to learn about various processes involved in online ordering of an item from an e-commerce website, to understand the various challenges faced by an organization dealing in e-tailing business in its introduction phase and to find out whether IT Strategy can be of help to overcome these challenges, to have an understanding of the Balance Score Card and Departmental Score Card, to understand how cloud can be of help to overcome the challenges and what are the possible cloud architectures to address such problems, to get an idea about how return on investment can be measured for finding feasibility of investment in cloud and to have the understanding of risk associated with implementing cloud and the cost of mitigating those risks. Supplementary materials Teaching notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS:11 Strategy.

RATIONALE FOR ESTABLISHING A FLOATING PRICE DISCOUNT ON ENTERPRISE PRODUCTS

2017 ◽  
Author(s):  
Andriy Kolomiyets ◽  
Keyword(s):  
Cost Savings ◽  
Sales Managers ◽  
Price Discount ◽  
Advertising Appeals ◽  
Price List ◽  
Price Discounts ◽  
Additional Costs ◽  
Product Sales ◽  
And Storage ◽  
Form Effect

The article presents an overview of methods for determining the effectiveness of advertising appeals of the enterprise in conditions of competition. It is shown that the sale of goods in large batches leads to a reduction in sales costs associated with the organization of sales, transportation and storage. Therefore, when providing a quantitative discount, their value should not exceed the amount of cost savings of the seller, which is caused by the sale of goods in large batches. Similar to the effects of real responses to advertising appeals, the effects of the price of the enterprise's products are distinguished: the current effect, the form effect, the competition effect and the transition effect. The process of modeling the effects of the promotion price and the control price is considered, and of interest is the temporary price for the buyer with a discount, which is actually provided by sales managers at the enterprise. Then there will be an effect of discounts on temporary base prices. The price discount is considered as a part of the price of the goods which can be introduced by the enterprises-manufacturers for the purpose of stimulation and interest of the enterprises-sellers to sell production. In the study of product sales, a problem was found related to sales of products in the area of the price discount offered by the price list, which represents the constant prices of the company for a certain period of time. The promotion price is defined as the discount on the products of the enterprise price according to the price list. It is determined that buyers, focusing on the system of discounts, avoid buying hardware in the approach to the transition of prices and increase the volume of purchases after the transition discount. A comparison of retail and base prices, and base and wholesale prices for hardware. It is proved that the company when approaching the price discount loses the profit that could be obtained, and this problem causes losses to both parties and the seller and buyer. It is shown that the policy of promoting price discounts of Metal-Holding encourages consumers to buy more hardware, which is not beneficial to the buyer, because it causes additional costs for storage of the balance. It is concluded that the problem at some weight interval when approaching the existing price discount on the left and right requires the establishment of a floating price discount on the company's products.

scholarly journals Optimal placement design for picking and packing in distribution centers

2021 ◽  
Vol 13 (4) ◽  
pp. 168781402110106
Author(s):  
John Rios ◽  
Rodrigo Linfati ◽  
Daniel Morillo-Torres ◽  
Iván Derpich ◽  
Gustavo Gatica
Keyword(s):  
Optimal Allocation ◽  
Programming Model ◽  
Operating Cost ◽  
Nonlinear Integer Programming ◽  
Operating Costs ◽  
Optimal Placement ◽  
Distribution Centers ◽  
Suitable Space ◽  
Efficient Distribution

An efficient distribution center (DC) is one that receives, stores, picks and packs products into new logistics units and then dispatches them to points of sale at the minimal operating cost. The picking and packing processes represent the highest operating cost of a DC, and both require a suitable space for their operation. An effective coordination between these zones prevents bottlenecks and has a direct impact on the DC’s operational results. In the existing literature, there are no studies that optimize the distribution of the picking and packing areas simultaneously while also reducing operating costs. This article proposes an integer nonlinear integer programming model that minimizes order preparation costs. It does so by predicting customer demand based on historical data and defining the ideal area for picking and packing activities. The model is validated through a real case study of seven clients and fifteen products. It achieves a [Formula: see text] reduction in operating costs when the optimal allocation of the picking and packing areas is made.

Determining the structure of pharmaceutical industry in Iran

2019 ◽  
Vol 13 (1) ◽  
pp. 101-115
Author(s):  
Sara Emamgholipour ◽  
Lotfali Agheli
Keyword(s):  
Pharmaceutical Industry ◽  
Economies Of Scale ◽  
Monopolistic Competition ◽  
Pharmaceutical Market ◽  
Data Availability ◽  
Market Demand ◽  
Firm Level ◽  
Content Type ◽  
Measure Concentration ◽  
Pharmaceutical Industries

Purpose As the pharmaceutical industry is one of the key sectors of the health-care system, the identification of its structure is of particular importance. This paper aims to determine the structure of the pharmaceutical industry in Iran to provide appropriate solutions for pricing and regulation by policymakers. Iran is a growing pharmaceutical market with over $4bn in sales, so the supply side needs to be examined to meet the domestic consumption. Design/methodology/approach This research is a descriptive and retrospective analytical study which examines the Iranian pharmaceutical industry through library studies and using pharmaceutical data of the country’s Food and Drug Administration during 1992-2016. Due to data availability in firm level, the concentration ratio of N leading firms and the Herfindahl–Hirschman index are used to measure the concentration of the pharmaceutical market in 2014 and 2016. Findings The results show that pharmaceutical manufacturing, importing companies and distributing companies play roles in monopolistic competition market, loose oligopoly market and oligopoly market, respectively. For all companies, the magnitudes of Herfindahl–Hirschman indices indicate non-competitive settings. As a result, these companies set their own prices, and market demand affects their sales. In addition, demand for medicines is shaped in the form of supply-induced demand. Research limitations/implications This research was accomplished with no computational limitation. However, it was confined to only one country, one industry and the mentioned period of study. Practical implications The pharmaceutical manufacturers have no influence on medicine prices, and government pricing regulations lessen the market power of such market agents. However, the easy entry to and exit from market stimulate producers to participate in manufacturing activities. The pharmaceutical importers may expand their imports in response to entry new actors; however, the new entrants weaken the coordination on pricing decisions. Social implications As pharmaceutical distributers act in an oligopoly market, they can collude, reduce competition and lower the welfare of pharmaceutical consumers. In such conditions, high investment requirements and economies of scale may discourage the entry of new firms. Originality/value Although there are various studies on market structure in non-pharmaceutical industries, this study is a new effort to measure concentration in the Iranian pharmaceutical market and to determine its structure.

Economies of scale in European life insurance

2018 ◽  
Vol 19 (2) ◽  
pp. 190-207 ◽  
Author(s):  
Udo Klotzki ◽  
Alexander Bohnert ◽  
Nadine Gatzert ◽  
Ulrike Vogelgesang
Keyword(s):  
Life Insurance ◽  
Fixed Effects ◽  
Economies Of Scale ◽  
Insurance Markets ◽  
Fixed Effects Model ◽  
Content Type ◽  
Administrative Costs ◽  
Life Insurers ◽  
Acquisition Costs ◽  
The Uk

Purpose Due to the continuing low interest rate environment as well as the increase in acquisition costs, price transparency, cost transparency and competition with banks, the cost of life insurance becomes increasingly important for customers, insurers and shareholders. Against this background, the purpose of this paper is to study the development of insurers’ economies of scale in regard to administrative costs for four of the largest European life insurance markets. Design/methodology/approach The analysis on economies of scale is based on a comprehensive set of 477 life insurers in Germany, Italy, Spain and the UK, yearly data between 2000 and 2014, and regression calculations that are based on 4,855 observations. Findings The results show that economies of scale exist for all considered markets and for most of the considered years. However, the extent of economies of scale varies considerably across countries. Originality/value Overall, the existing academic literature on costs and corresponding economies of scale in life insurance primarily deals with analyses of total costs instead of administrative costs, a single year or a single market. This paper contributes to the existing literature by conducting an analysis of recent market dynamics and economies of scale in regard to administrative costs for the period from 2000 and 2014 for four of the largest European life insurance markets for which the respective data were available (Germany, Italy, Spain and the UK) and 477 life insurers in total. This is done by means of a log-log transformation of premiums and costs and a fixed effects model based on these transformed figures for 4,855 observations. In addition, for each market, the authors analyze the development of administrative costs for a total of 477 insurers.

scholarly journals Location of regional and international hub ports in liner shipping

2017 ◽  
Vol 2 (2) ◽  
pp. 114-125 ◽  
Author(s):  
Jianfeng Zheng ◽  
Cong Fu ◽  
Haibo Kuang
Keyword(s):  
Design Methodology ◽  
Location Problem ◽  
Programming Model ◽  
Liner Shipping ◽  
Mixed Integer ◽  
Eastern Asia ◽  
Hub Location ◽  
Hub Location Problem ◽  
Content Type ◽  
Western Asia

Purpose This paper aims to investigate the location of regional and international hub ports in liner shipping by proposing a hierarchical hub location problem. Design/methodology/approach This paper develops a mixed-integer linear programming model for the authors’ proposed problem. Numerical experiments based on a realistic Asia-Europe-Oceania liner shipping network are carried out to account for the effectiveness of this model. Findings The results show that one international hub port (i.e. Rotterdam) and one regional hub port (i.e. Zeebrugge) are opened in Europe. Two international hub ports (i.e. Sokhna and Salalah) are located in Western Asia, where no regional hub port is established. One international hub port (i.e. Colombo) and one regional hub port (i.e. Cochin) are opened in Southern Asia. One international hub port (i.e. Singapore) and one regional hub port (i.e. Jakarta) are opened in Southeastern Asia and Australia. Three international hub ports (i.e. Hong Kong, Shanghai and Yokohama) and two regional hub ports (i.e. Qingdao and Kwangyang) are opened in Eastern Asia. Originality/value This paper proposes a hierarchical hub location problem, in which the authors distinguish between regional and international hub ports in liner shipping. Moreover, scale economies in ship size are considered. Furthermore, the proposed problem introduces the main ports.

Service productivity as mutual learning

2015 ◽  
Vol 7 (2/3) ◽  
pp. 296-311 ◽  
Author(s):  
Christian Grönroos ◽  
Katri Ojasalo
Keyword(s):  
Open Systems ◽  
Cost Savings ◽  
Service Organizations ◽  
Content Type ◽  
Mutual Learning ◽  
Context Learning ◽  
Starting Point ◽  
Service Production ◽  
Service Productivity ◽  
Internal Efficiency

Purpose – The purpose of this paper is to analyse the mutual learning implications for service productivity of the characteristics of service and service production. Design/methodology/approach – This is a conceptual paper. The starting point is, first of all, that productivity as a management concept should help a firm to manage its economic profit, and secondly, that service organizations are open systems, where the customers participate as co-producers and are exposed to the firm’s production resources and processes. Unlike in manufacturing, to understand productivity in service organizations as a means of managing profit, cost effects and revenue effects of changes in the productions system cannot be separated. Due to the interaction between customers and the firm’s resources during service production, dialogical collaboration between them develops. This enables mutual learning. Findings – Given the social dynamics in service production processes, four learning processes that influence service productivity are identified. Two processes enhance the organizations’s internal efficiency (cost savings), and two enhance its external effectiveness (perceived quality, revenue generation); two are organization-driven, two are customer-driven. Research limitations/implications – The mutual learning model demonstrates how the service provider by learning from the dynamics of service encounters in many ways can manage the productivity of the organizations’s processes. It shows that learning enables improvement of service productivity through effects enhancing both internal efficiency and external effectiveness. Originality/value – In a productivity context, learning has not earlier been studied as a mutual learning phenomenon.

A novel design space concept for design of concrete foundation supporting chemical reactors

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Osama Bedair
Keyword(s):  
Design Space ◽  
Cost Savings ◽  
Space Representation ◽  
Chemical Reactors ◽  
Content Type ◽  
Gas Recovery ◽  
Wide Range ◽  
Numerical Finite Element ◽  
Novel Concept ◽  
Reactor Models

PurposeThis paper presents a novel concept for design of concrete support system for chemical reactors used in refineries and petrochemical plants. Graphical method is described that can be used to size the concrete base and piling system. Recommendations are also provided to optimize the parameters required for the design. The procedure is illustrated for design of two reactor models commonly used in gas recovery units.Design/methodology/approachDesign space representation for the foundation system is described for chemical reactors with variable heights. The key points of the design graph are extracted from the numerical finite element models. The reactor load is idealized at discrete points to transfer the loads to the piles. Bilateral spring system is used to model the soil restrains.FindingsThe graphical approach is economical and provides the design engineer the flexibility to select the foundation parameters from wide range of options.Practical implicationsThe concept presented in the paper can be utilized by engineers in the industry for design of chemical reactors. It must be noted that little guidelines are currently available in practice addressing the structural design aspects.Originality/valueA novel concept is presented in this paper based on significant industrial design experience of reactor supports. Using the described method leads to significant cost savings in material quantity and engineering time.

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