Product recalls and insider trading
Rachna Shah1, Finn Petersen1, George P. Ball2, Salman Arif1
1University of Minnesota, Carlson School of Management, United States of America; 2Indiana University, Kelley School of Business, United States of America
The timeline of product recalls provides corporate insiders with an opportunity to sell stocks before the market reacts to a recall. In this paper, we examine whether such insider trading occurs during the product recall process. Our results show that insider trading is present and that directors but not officers seem to engage in it in the days following defect awareness. Thus, we identify the product recall process as a novel source of information that insiders exploit for personal gains.
Supply chain contracting for network goods
Dawei Jian
University of California Riverside, United States of America
How should manufacturers sell network goods through retailers? We study this new supply chain contracting problem, where the retailer can privately observe and control the evolving market conditions. The optimal contract resembles the second-best in the short run, but converges to the first-best in the long run. We guide practice why manufacturers should over supply, mitigate network effects, favor incumbent retailers, and improve retailer information capability, despite information asymmetry.
Smart home insurance: collaboration and pricing
Debajyoti Biswas1, Sara Rezaee Vessal2
1ESSEC Business School, France; 2ESSEC Business School, France
Insurers have started incentivising customers for buying smart home security products along with home insurance to achieve a reduction in hazard likelihood. In this paper, we study the discounting decision of the insurer and pricing and quality decisions of the smart product manufacturer for offering "smart home insurance" to customers under no-contract, a Wholesale price contract and a Cost-sharing contract, considering (1) equal market power and (2) having a dominant SPM separately.
Computational analysis of stochastic and robust optimization models for capacitated lot sizing under uncertain customer demand
Manuel Schlenkrich, Sophie Parragh
Johannes Kepler University Linz, Austria
This work presents a computational study of two-stage stochastic programming and budget-uncertainty robust optimization for capacitated lot-sizing under uncertain demand. To solve the stochastic models, a Benders decomposition approach is tailored to the problem. The tradeoff between computational time and performance on out-of-sample scenarios is investigated. Managerial insights are provided by analyzing the structure of the obtained production plans and the impact of flexibility in planning.
Tactical production planning and strategic buffer placement under demand and supply uncertainty in the high-tech manufacturing industry
Tijn Fleuren, Yasemin Merzifonluoglu, Maarten Hendriks, Renata Sotirov
Tilburg University, Netherlands, The
This paper proposes an integrated methodology to optimize tactical production planning and strategic buffer placement in complex capacity constrained high-tech manufacturing supply chains. We introduce a novel multi-stage stochastic programming model that simultaneously tackles demand and lead time uncertainty. For extended planning horizons, we establish a data-driven rolling horizon-based decision framework to derive efficient buffer replenishment policies for varying service levels.
Frictions in international operations: a financial approach
Haokun Du1, Wenhui Zhao2, Yan Zeng3
1Jindal School of Management, University of Texas at Dallas, United States of America; 2Antai College of Economics and Management, Shanghai Jiao Tong University, People's Republic of China; 3Lingnan (University) College, Sun Yat-sen University, People's Republic of China
We study frictions in foreign exchange market. We consider two companies with opposite needs of currencies. They can negotiate an exchange between themselves. Forward contract is where negotiation happens prior to randomness resolution, while ad-hoc contract after. The forward contract has a larger potential in increasing quantity decisions due to prior commitment. Ad-hoc contract leads to either unique or continuum of equilibrium(a). Payoff dominance uniquely selects an equilibrium.
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