Negotiating Government-to-Government Food Importing Contracts: A Nash Bargaining Framework

2021 ◽  
Author(s):  
Liying Mu ◽  
Bin Hu ◽  
A. Amarender Reddy ◽  
Srinagesh Gavirneni
Keyword(s):  
Ad Hoc ◽  
Developing Nations ◽  
Problem Definition ◽  
Pool Size ◽  
Nash Bargaining ◽  
Practical Relevance ◽  
Negotiation Model ◽  
Multiple Sourcing ◽  
Managerial Implications ◽  
Better Than

Problem definition: Inspired by India’s challenges in importing pulses, we study the negotiation of government-to-government food importing contracts, with a focus on ad hoc and forward negotiations with multiple suppliers (henceforth referred to as multiple-sourcing negotiations). Academic/practical relevance: We are the first to comprehensively study ad hoc and forward multiple-sourcing negotiations for food importing. Such problems are widespread, especially in developing nations, and thus the research can be relevant to the wellbeing of large underprivileged populations. Methodology: We develop an analytical negotiation model in the Nash bargaining framework and adopt the Nash-in-Nash framework to analyze multiple-sourcing negotiations. Results: We find that while forward negotiations are not necessarily better than ad hoc negotiations for the buyer, it would be true with sufficiently many suppliers. When facing a supplier pool, we show that it may be optimal to mix forward and ad hoc suppliers. In general, fewer suppliers should be assigned as ad hoc as the pool size increases. We also find that adding a hybrid supplier (engaged in a forward negotiation with an ad hoc negotiation as the fallback option) may be better or worse than adding a forward supplier in the presence of other suppliers. Managerial implications: Our findings inform how a food importer should strategically utilize ad hoc and forward negotiations with its suppliers to improve the outcome. The work may help countries’ food importing policymaking and strategies and may improve the wellbeing of large underprivileged populations.

AI and Procurement

2021 ◽  
Author(s):  
Ruomeng Cui ◽  
Meng Li ◽  
Shichen Zhang
Keyword(s):  
Price Discrimination ◽  
Recommendation System ◽  
Wholesale Price ◽  
Problem Definition ◽  
Practical Relevance ◽  
Trading Company ◽  
Smart Control ◽  
Managerial Implications ◽  
The Impact ◽  
Price Quotes

Problem definition: In this research, we study how buyers’ use of artificial intelligence (AI) affects suppliers’ price quoting strategies. Specifically, we study the impact of automation—that is, the buyer uses a chatbot to automatically inquire about prices instead of asking in person—and the impact of smartness—that is, the buyer signals the use of a smart AI algorithm in selecting the supplier. Academic/practical relevance: In a world advancing toward AI, we explore how AI creates and delivers value in procurement. AI has two unique abilities: automation and smartness, which are associated with physical machines or software that enable us to operate more efficiently and effectively. Methodology: We collaborate with a trading company to run a field experiment on an online platform in which we compare suppliers’ wholesale price quotes across female, male, and chatbot buyer types under AI and no recommendation conditions. Results: We find that, when not equipped with a smart control, there is price discrimination against chatbot buyers who receive a higher wholesale price quote than human buyers. In fact, without smartness, automation alone receives the highest quoted wholesale price. However, signaling the use of a smart recommendation system can effectively reduce suppliers’ price quote for chatbot buyers. We also show that AI delivers the most value when buyers adopt automation and smartness simultaneously in procurement. Managerial implications: Our results imply that automation is not very valuable when implemented without smartness, which in turn suggests that building smartness is necessary before considering high levels of autonomy. Our study unlocks the optimal steps that buyers could adopt to develop AI in procurement processes.

Symbolic Awards in Buyer–Supplier Relations

2021 ◽  
Author(s):  
Ruth Beer ◽  
Hyun-Soo Ahn ◽  
Stephen Leider
Keyword(s):  
Laboratory Experiments ◽  
Problem Definition ◽  
Practical Relevance ◽  
Negative Effects ◽  
Bottom Line ◽  
Managerial Implications ◽  
The Cost ◽  
Behavioral Mechanisms ◽  
The Relationship ◽  
High Effort

Problem definition: Giving out a symbolic “supplier of the year” or “outstanding supplier” award can be beneficial for a buyer as it may incentivize a supplier to exert higher efforts. However, when a good supplier is scarce, the award announces which supplier is particularly good and may increase the cost of building and maintaining the relationship. This paper studies both positive and negative effects of a symbolic award and offers explanations on underlying behavioral mechanisms. Academic/practical relevance: We show that symbolic awards can effectively incentivize suppliers to provide high effort, improving a buyer’s bottom line. This is particularly relevant in cases in which certain aspects of a buyer–supplier relationship are not contractible and suppliers have discretion over the quality provided. The award format significantly influences the award’s effectiveness. Methodology: We develop a game-theoretical model that captures a supplier’s utility for the award in a competitive setting and test the predictions of the model with laboratory experiments. Results: Our experimental results confirm that private symbolic awards have motivating effects and lead to higher buyer profits. When the awards are public, this profit premium diminishes as buyers pay higher prices to get the good suppliers. When the buyer is given the option to make the award public or private, buyers prefer that awards are public over private, anticipating a negative supplier response to their choice of the private award format. Managerial implications: Expressing praise or gratitude for a supplier’s efforts can be highly beneficial for a buyer. However, when there is scarcity of good suppliers, buyers should expect increased competition and accompany the award with efforts to preserve the relationship. Finally, if buyers choose to offer a distinctive award format, private recognitions may be perceived as greedy or self-interested and backfire.

scholarly journals Centralized and Decentralized Warehouse Logistics Collaboration

2020 ◽  
Vol 22 (4) ◽  
pp. 812-831 ◽  
Author(s):  
Shiman Ding ◽  
Philip M. Kaminsky
Keyword(s):  
Lower Bound ◽  
Transportation Cost ◽  
Problem Definition ◽  
Cost Ratio ◽  
Computational Studies ◽  
Practical Relevance ◽  
Grocery Industry ◽  
Ordering Policy ◽  
Managerial Implications ◽  
The Cost

Problem definition: We bound the value of collaboration in a decentralized multisupplier multiretailer setting, where several suppliers ship to several retailers through a shared warehouse, and outbound trucks from the warehouse contain the products of multiple suppliers. Academic/practical relevance: In an emerging trend in the grocery industry, multiple suppliers and retailers share a warehouse to facilitate horizontal collaboration, lower transportation costs, and increase delivery frequencies. Thus far, these so-called mixing and consolidation centers are operated in a decentralized manner, with little effort to coordinate shipments from multiple suppliers with shipments to multiple retailers. Facilitating collaboration in this setting would be challenging (both technically and in terms of the level of trust that would be necessary), so it is useful to understand the potential gains of collaboration. Methodology: We extend the classic one-warehouse multiretailer analysis to incorporate multiple suppliers and per-truck outbound transportation cost from the warehouse and develop a cost lower bound on centralized operation as benchmark. We then analyze decentralized versions of the system, in which each retailer and each supplier maximizes his or her own utility in a variety of settings, and we analytically bound the ratio of the cost of decentralized to centralized operation to bound the loss resulting from decentralization. Results: We find analytical bounds on the performance of several decentralized policies. The best, a decentralized zero-inventory ordering policy, has a cost ratio when compared with a lower bound on the centralized policy of no more than 3/2. In computational studies, we find that costs of decentralized policies are even closer to those of centralized policies. Managerial implications: Easy-to-implement decentralized policies are efficient and effective in this setting, suggesting that centralization (and thus a potentially complex and expensive coordination effort) is unlikely to result in significant benefits.

Contextual Trustworthiness of Organizational Partners: Evidence from Nine School Networks

2020 ◽  
Author(s):  
Samantha M. Keppler ◽  
Karen R. Smilowitz ◽  
Paul M. Leonardi
Keyword(s):  
Qualitative Study ◽  
Contextual Factors ◽  
Problem Definition ◽  
Practical Relevance ◽  
High Quality ◽  
School Networks ◽  
12Th Grade ◽  
Service Relationships ◽  
Managerial Implications ◽  
The Relationship

Problem definition: Trustworthy partners in procurement and service relationships are an asset. How can organizations discern trustworthy from untrustworthy partners, especially early on, so as to not waste time or resources on bad relationships? Academic/practical relevance: Like prior studies, we take the perspective that organizations rarely know whether a partner is trustworthy, but also that organizations often have some evidence of a partner’s trustworthiness, even before interacting. We argue a qualitative study is needed to understand how people discern a partner’s trustworthiness and the consequences of initial perceptions on the relationship trajectory. Methodology: We conduct an interview-based study of how people discern trustworthy partners in a setting where doing so is challenging: the education sector. Kindergarten-through-12th-grade schools must choose outside partners to rely on for resources or services the school cannot afford. Potential partners are numerous and of variable trustworthiness. Results: We find people use contextual factors as evidence of a potential partner’s trustworthiness, such as the partner’s institutional affiliations, physical proximity, and relationships with other schools. Sometimes the evidence indicates that a partner acts intrinsically trustworthily, regardless of these contextual factors. In other cases, the evidence indicates a partner acts contextually trustworthily, meaning partners follow through in some conditions but not others. Intrinsically trustworthy partners provide valuable but standardized resources or services. Contextually trustworthy partners provide the competitive advantage: customized resources that are not easily accessible by other schools. Managerial implications: People in organizations identify trustworthy partners via contextual factors, which helps them determine whether a partner acts trustworthily independent of context or conditional on context. The value of intrinsically trustworthy partners derives from their low risk and high quality, whereas the value of contextually trustworthy partners derives from their willingness to customize resources or services to some—but not all—organizations.

scholarly journals Motivating Supplier Social Responsibility Under Incomplete Visibility

2020 ◽  
Vol 22 (6) ◽  
pp. 1268-1286 ◽  
Author(s):  
Tim Kraft ◽  
León Valdés ◽  
Yanchong Zheng
Keyword(s):  
Supply Chain ◽  
Social Responsibility ◽  
Investment Decision ◽  
Problem Definition ◽  
Third Party ◽  
Theoretic Model ◽  
Practical Relevance ◽  
Managerial Implications ◽  
Game Theoretic ◽  
Game Theoretic Model

Problem definition: We examine how a profit-driven firm (she) can motivate better social responsibility (SR) practices by a supplier (he) when these practices cannot be perfectly observed by the firm. We focus on the firm’s investment in the supplier’s SR capabilities. To capture the influence of consumer demands, we incorporate the potential for SR information to be disclosed by the firm or revealed by a third party. Academic/practical relevance: Most firms have limited visibility into the SR practices of their suppliers. However, there is little research on how a firm under incomplete visibility should (i) invest to improve a supplier’s SR practices and (ii) disclose SR information to consumers. We address this gap. Methodology: We develop a game-theoretic model with asymmetric information to study a supply chain with one supplier and one firm. The firm makes her investment decision given incomplete information about the supplier’s current SR practices. We analyze and compare two settings: the firm does not disclose versus she discloses SR information to the consumers. Results: The firm should invest a high (low) amount in the supplier’s capabilities if the information she observes suggests the supplier’s current SR practices are poor (good). She should always be more aggressive with her investment when disclosing (versus not disclosing). This more aggressive strategy ensures better supplier SR practices under disclosure. When choosing between disclosing and not disclosing, the firm most likely prefers not to disclose when the supplier’s current SR practices seem to be average. Managerial implications: (i) Greater visibility helps the firm to better tailor her investment to the level of support needed. (ii) Better visibility also makes the firm more “truthful” in her disclosure, whereas increased third-party scrutiny makes her more “cautious.” (iii) Mandating disclosure is most beneficial for SR when the suppliers’ current practices seem to be average.

Surge Pricing and Two-Sided Temporal Responses in Ride Hailing

2021 ◽  
Author(s):  
Bin Hu ◽  
Ming Hu ◽  
Han Zhu
Keyword(s):  
Strategic Behavior ◽  
Problem Definition ◽  
Lower Price ◽  
Pricing Strategies ◽  
Practical Relevance ◽  
Temporal Perspective ◽  
Equilibrium Pricing ◽  
Managerial Implications ◽  
Initial Price ◽  
Supply Information

Problem definition: We investigate surge pricing in ride-hailing platforms from a temporal perspective, highlighting strategic behavior by riders and drivers and that drivers respond to surge pricing much more slowly than riders do. Academic/practical relevance: Surge pricing in ride-hailing platforms is a pivotal and controversial subject. Despite abundant anecdotal evidence, strategic behavior by riders and drivers has not been formally studied in the literature. Methodology: We adopt and analyze a classic two-period, game-theoretical model as in the strategic consumer literature. Results: We identify two types of equilibrium pricing strategies. The first consists of a short-lived, sharp price surge followed by a lower price, which we refer to as skimming surge pricing (SSP). The second consists of a low initial price followed by a higher price, which we refer to as penetration surge pricing (PSP). We find that PSP equilibria are generally superior to SSP equilibria when both exist but require platforms to share demand–supply information with drivers. Managerial implications: The SSP equilibrium rationalizes the controversial sharp surge-pricing practice: the short-lived sharp price surge causes many high-value riders to voluntarily wait out the initial surge period, which attracts additional drivers to the region to serve riders at a much lower price than the initial surge price. The theoretically superior PSP equilibrium suggests that a vastly different approach may improve surge pricing and highlights the potential value and importance for platforms to share demand–supply information with drivers.

Cereal Consumption, Production, and Prices in West Pakistan (Notes & Comments)

1968 ◽  
Vol 8 (2) ◽  
pp. 288-306 ◽  
Author(s):  
G. C. Hufbauer
Keyword(s):  
Food Consumption ◽  
Ad Hoc ◽  
Dry Weight ◽  
Small Sample ◽  
Tax Rates ◽  
Active Population ◽  
Early Settlement ◽  
Consumption Rates ◽  
Late Nineteenth ◽  
Better Than

In the late nineteenth and early twentieth centuries, several Punjab Settlement Officers attempted to estimate food consumption rates. These estimates, based on direct observation and ad hoc guesses, were made partly out of academic curiosity, but more urgently, as an aid in establishing the land revenue (i.e., tax) rates. The pre-1926 estimates are summarized in Table I, expressed in pounds of wheat and other foodgrain consumption per person per year1. Broadly speaking, the later, more systemtic observers (e.g., Sir Ganga Ram and C. B. Barry), found lower consumption levels than the earlier observers. It was generally accepted that the rural populace ate better than urban dwellers. Despite the ingenuity of the early Settlement Officers, their compiled estimates suffer from all the difficulties of haphazard small sample observation. Given the revenue purpose of the estimates, they may be biased towards the able-bodied, economically active, population. Further, the very early estimates may have confused dry weight with cooked weight, including water.

Achieving structured knowledge management with a novel online group decision support system

2020 ◽  
pp. 026666692096984
Author(s):  
Wesley Shu ◽  
Songquan Pang ◽  
Minder Chen
Keyword(s):  
Knowledge Management ◽  
Knowledge Acquisition ◽  
Ad Hoc ◽  
Group Decision Support System ◽  
Face To Face ◽  
Knowledge Conversion ◽  
Group Problem Solving ◽  
The People ◽  
Mixed Factorial Design ◽  
Better Than

Knowledge management (KM) is a complicated process that involves socialization, externalization, combination, and internalization and requires close collaboration among the people involved. Although Nonaka proposed the SECI (Socialization, Externalization, Combination, Internalization) model and the concept of Ba, which provides a process-oriented view of knowledge creation and transfer, practicing it is rather ad hoc. COVID-19 has provided a chance for practitioners to find a new method for KM. In this study, we adapted a group problem-solving system called TeamSpirit and structured it as a Ba for the SECI model. We then compared TeamSpirit with two other implementations of Ba, email and face-to-face communication, to evaluate their effects on knowledge externalization, knowledge combination, and knowledge internalization. Then, we evaluated whether these knowledge-conversion processes could improve knowledge acquisition and intention to share knowledge. A 3 × 2 mixed factorial design experiment was conducted. The results show that (a) TeamSpirit was better than the others, and face-to-face was better than email for each of the three knowledge conversion processes (externalization, combination, and internalization) and (b) the better the team’s knowledge conversion process lead, the stronger its knowledge acquisition and knowledge-sharing intention.

Performance Analysis of AODV Protocol in Mobile Ad Hoc Networks

2011 ◽  
Vol 403-408 ◽  
pp. 2415-2419 ◽  
Author(s):  
Yuan Ming Ding ◽  
Chang Hong Sun ◽  
Lin Song ◽  
Wan Qi Kong
Keyword(s):  
Routing Protocol ◽  
Ad Hoc ◽  
Mobile Ad Hoc Network ◽  
Data Transfer ◽  
Simulation Software ◽  
Aodv Protocol ◽  
Mobile Ad Hoc ◽  
Hoc Networks ◽  
Aodv Routing Protocol ◽  
Better Than

Simulation environment of the mobile Ad Hoc network is built by applying NS2 simulation software. The simulation data indicates that AODV routing protocol is better than DSDV in throughput, fairness and stability. In the underwater network environment where the nodes are in Low-Speed movement, the data transfer rate of AODV routing protocol is higher than AOMDV. To a certain extent, AODV is more suitable for application in underwater environments.

Partial Completion as a Nonprofit Strategy

2021 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Karthik Ramachandran
Keyword(s):  
Nonprofit Organizations ◽  
Service Provision ◽  
Problem Definition ◽  
Product Service ◽  
Service Portfolio ◽  
Wide Range ◽  
Partial Completion ◽  
Innovative Solution ◽  
Managerial Implications ◽  
Level 3

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constraints, some nonprofit organizations (NPOs) have adopted an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO’s choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO’s product or service portfolio. Academic/practical relevance: Although partial product or service provision has been observed in the nonprofit operations, there is limited understanding of when it is an appropriate strategy—a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO’s product/service completion and variety choices. Results: We identify when and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization versus fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations. (1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, even in the presence of ample resources. (2) Partial provision is particularly valuable when beneficiary needs are highly heterogeneous, or beneficiaries have high self-completion capabilities. A higher self-completion capability generally implies a lower optimal completion level; however, it may lead to either a higher or a lower optimal variety level. (3) Although providing incomplete products may appear to burden beneficiaries, a lower completion level can be optimal when fairness is factored into an NPO’s objective or when beneficiary capabilities are more heterogeneous.

Sign in / Sign up

Export Citation Format

Share Document