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Article

Zhong Ning, Tsan‐Ming Choi, Charlene Xie, Li Xie and Junjun Dai

This paper aims to explore the effect of e‐marketplace on the supply chain's performance under the markdown policy. Profit and risk analyses are both conducted and channel…

Abstract

Purpose

This paper aims to explore the effect of e‐marketplace on the supply chain's performance under the markdown policy. Profit and risk analyses are both conducted and channel coordination issues are examined.

Design/methodology/approach

The paper presents a markdown policy supply chain analytical model with e‐marketplace and examines the optimal markdown policy. The mean‐variance theory is employed to study both the risk and profit residing in the supply chain. Extensive numerical analysis is conducted. The paper investigates both the cases when e‐marketplace selling price is exogenous and endogenous.

Findings

The markdown policy can coordinate the supply chain as long as the parameters satisfy certain analytical conditions. The expected profit and risk in the supply chain are both increased when e‐marketplace is introduced. The retailer shares a larger portion of the increased expected profit but at the same time bears a higher risk.

Research limitations/implications

In this study, similar to the mainstream literature in the related area, the supply chain consists of one manufacturer and one retailer, and there is one single selling season with one product. Despite being able to generate interesting analytical results, this model fails to capture the more complicated real world practices.

Practical implications

The existence of e‐marketplace can be beneficial to the whole supply chain in terms of expected profit improvement. When the expected profit increase brought about by e‐marketplace is large enough to compensate for both the operational cost of e‐marketplace and the increase of the risk, the retailer could consider introducing e‐marketplace to dispose of the excess inventory.

Originality/value

This paper is an original work. It is based on the reviewed literature and the model with markdown policy is new. This could be a reference for further research into optimal performance in the supply chain with e‐marketplace.

Details

Supply Chain Management: An International Journal, vol. 16 no. 6
Type: Research Article
ISSN: 1359-8546

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Article

Paul D. Gottlieb and Adesoji Adelaja

This paper aims to build a mathematical model to determine the price of an acre of developable land, whether it is part of a large open tract (farm) or a smaller…

Abstract

Purpose

This paper aims to build a mathematical model to determine the price of an acre of developable land, whether it is part of a large open tract (farm) or a smaller residential parcel that can legally be subdivided. The primary purpose of the model is to explore the effect of various minimum lot‐size regulations on the price of these two types of vacant land. The study also attempts to explain apparently conflicting findings that have recently appeared in empirical studies of “down‐zoning” in the states of Maryland and New Jersey.

Design/methodology/approach

The mathematical model of land value is based on principles of asset valuation under uncertainty at various locations within a metropolitan area. The price of an acre of land is modeled as the present value of a stream of indirect utility to homeowners, and economic rents to farmers, developers or landlords, depending on an endogenous date of development. The cases of New Jersey and Maryland are compared using parameterized simulations, with minimum lot size allowed to vary.

Findings

The simulations reconcile earlier empirical studies on Maryland and New Jersey. The observed absence of any price effect of down‐zoning in rural Maryland appears to be caused by the fact that development is not imminent there. In New Jersey, development is imminent virtually everywhere, and a high proportion of today's vacant land value is due to its development potential. This means that down‐zoning will typically lead to dramatic declines in vacant land value in New Jersey.

Research limitations/implications

The study relies on state averages, so its results should not be applied to particular parcels in Maryland or New Jersey. The study incorporates uncertainty in expected developer profits, but not in future political decisions.

Practical implications

By clarifying the context in which zoning changes will or will not lead to decline in a landowner's asset value, the study can inform legal and political debates over re‐zonings in the USA. Included in these debates is the claim that some re‐zonings violate the “takings” clause of the USA constitution.

Originality/value

The majority of papers on this subject are empirical, using a hedonic or an appraisal methodology. This paper provides a coherent theoretical model of per‐acre land prices under different levels of zoning restriction. It can be used for simulation or prediction with relatively few input parameters.

Details

Agricultural Finance Review, vol. 69 no. 2
Type: Research Article
ISSN: 0002-1466

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Article

Xujin Pu, Zhenxing Yue, Qiuyan Chen, Hongfeng Wang and Guanghua Han

This paper's purpose is to suggest that manufacturers strategically place soft orders for assembly materials with suppliers in Silk Road Economic Belt countries who…

Abstract

Purpose

This paper's purpose is to suggest that manufacturers strategically place soft orders for assembly materials with suppliers in Silk Road Economic Belt countries who probably doubt the realization of the soft orders placed.

Design/methodology/approach

First, a two-stage Stackelberg competition is constructed, taking into account the supplier's trust level in formulating the decision process in the assembly supply chain. The authors then provide a buyback contract to coordinate the supply chain, in which the manufacturer obtains enough supplies by sharing some of the perceived risks of not fully trusted suppliers. Furthermore, the authors conduct a numerical study to investigate the influence of trust under a decentralized case and a buyback contract.

Findings

The authors found that all supply chain partners in Silk Road Economic Belt countries experience potential losses due to not fully trusting certain conditions. The study also shows that, in Silk Road Economic Belt countries, operating under a buyback contract is better than being without one in terms of assembly supply chain performance.

Research limitations/implications

On the one hand, the authors only consider the asymmetry of demand information without considering that of cost structure information. On the other hand, a natural extension of the paper is to integrate single-period transactions into the multi-period transaction problem setting. As all these issues require substantial effort, the authors reserve them for future exploration.

Originality/value

Doing business with not-fully-trustworthy partners in Silk Road Economic Belt countries is risky, and this study reveals how trust works in global cooperation and with strategic reactions in situations of partial trust.

Details

The International Journal of Logistics Management, vol. 31 no. 4
Type: Research Article
ISSN: 0957-4093

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Article

Xiaoling Wu, Yichen Peng, Xiaofeng Liu and Jing Zhou

The purpose of this paper is to analyze the effects of private investor's fair preference on the governmental compensation mechanism based on the uncertainty of income for…

Abstract

Purpose

The purpose of this paper is to analyze the effects of private investor's fair preference on the governmental compensation mechanism based on the uncertainty of income for the public-private-partnership (PPP) project.

Design/methodology/approach

Based on the governmental dilemma for the compensation of PPP project, a generalized compensation contract is designed by the combination of compensation before the event and compensation after the event. Then the private investor's claimed concession profit is taken as its fair reference point according to the idea of the BO model, and its fair utility function is established by improving the FS model. Thus the master-slave counter measure game is applied to conduct the behavior modeling for the governmental compensation contract design.

Findings

By analyzing the model given in this paper, some conclusions are obtained. First, the governmental optimal compensation contract is fair incentive for the private investor. Second, the private fair preference is not intuitively positive or negative related to the social efficiency of compensation. Only under some given conditions, the correlation will show the consistent effect. Third, the private fair behavior’s impact on the efficiency of compensation will become lower and lower as the social cost of compensation reduces. Fourth, the governmental effective compensation scheme should be carried out based on the different comparison scene of the private claimed portfolio profit and the expected revenue for the project.

Originality/value

This study analyzes the effects of private investor's fair preference on the validity of governmental generalized compensation contract of the PPP project for the first time; and the governmental generalized compensation contract designed in this study is a pioneering and exploratory attempt.

Details

China Finance Review International, vol. 8 no. 1
Type: Research Article
ISSN: 2044-1398

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Book part

Ernest R. Larkins

With repeal of the extraterritorial income exclusion expected in 2004, many U.S. companies selling abroad must rethink tax strategies related to export profit. Many firms…

Abstract

With repeal of the extraterritorial income exclusion expected in 2004, many U.S. companies selling abroad must rethink tax strategies related to export profit. Many firms with net operating loss (NOL) carryforwards, foreign tax credit (FTC) carryforwards, and interest-charge domestic international sales corporations (ICDs) can reduce marginal tax rates (MTRs) below rates otherwise applying to domestic sales. This article provides several case examples illustrating how U.S. exporters can minimize the MTR applicable to export profit. MTRs often depend on the period over which the company expects to absorb its NOL or FTC carryforward, the firm’s discount rate, and, in the case of ICDs, the prevailing T-bill rate. Assuming a 34% corporate tax rate, exporters with NOL (FTC) carryforwards can reduce the MTR on export profit to zero (17%) in some cases. Also, over the range of variables this article examines, the ICD reduces the MTR on export profit to between 34 and 21%. The cases illustrate how NOL and FTC carryforwards and ICDs affect exporters’ MTRs and provide educators with useful tools for discussing the tax aspects of exporting.

Details

Advances in Taxation
Type: Book
ISBN: 978-0-76231-134-7

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Article

Wenfeng Wu, Jianshe Song, Kexia Jiang and Hao Li

This paper aims to study the maintenance and replacement problem for a deteriorating repairable system with multiple vacations of one repairman. It proposes a new…

Abstract

Purpose

This paper aims to study the maintenance and replacement problem for a deteriorating repairable system with multiple vacations of one repairman. It proposes a new replacement policy and establishes corresponding replacement models.

Design/methodology/approach

It is assumed that the repair after the system failures is not “as good as new” and the repairman is in multiple vacations. The reaching of the effective age of the system is assumed to be mutually stochastic at working state, waiting state for repair and being repaired state. Under these assumptions, a replacement policy based on the effective age of the system is applied. The long-run expected downtime per unit time and the long-run expected profit per unit time as objective functions are chosen, respectively. By using geometric process theory and renewal process theory, the mathematic models have been established and the explicit expressions of the long-run expected downtime per unit time and the long-run expected profit per unit time are derived, respectively.

Findings

The optimal replacement policy can be calculated and determined by the computer to minimize the expected downtime or maximize the expected profit. The minimum expected downtime per unit time and maximum expected profit per unit time can also be determined.

Originality/value

This replacement policy and mathematic models can be used as reference to the failure system maintenance and replacement.

Details

Journal of Quality in Maintenance Engineering, vol. just-accepted no. just-accepted
Type: Research Article
ISSN: 1355-2511

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Article

Khairy A.H. Kobbacy, Hexin Wang and Wenbin Wang

Many supply contracts are employed in practice to improve the performance of supply chains. But there is a lack of research that can offer guidance to practitioners in…

Abstract

Purpose

Many supply contracts are employed in practice to improve the performance of supply chains. But there is a lack of research that can offer guidance to practitioners in choosing the best supply contract among a group of popular contracts. This paper aims to fill this gap by developing an intelligent rule‐based supply contract design system for choosing the best contract and its parameters from a supplier's point of view.

Design/methodology/approach

The approach used in this paper is based on the comparison of several supply contracts that are encountered in supply chain practice. The paper aims at identifying the conditions under which one supply contract outperforms another from the supplier's perspective. To facilitate the implementation of the decision‐making rules that are developed in this research, an intelligent decision support system is developed.

Findings

Six popular contracts are analysed; returns policy (RP), quantity discount (QD), target rebate (TR), backup agreement (BA), quantity flexibility (QF), and quantity commitment (QC). The main findings are: QD contracts generate larger expected profits for the supplier than TR contracts do when the demand is exogenous, an RP contract is better than a QD contract when the wholesale profit margin is sufficiently large and that the optimal QC contract always provides a higher expected service level than BA and QF contracts.

Originality/value

The paper presents an approach for developing an intelligent supply contract design system that can offer guidance to practitioners in choosing the best supply contract for a particular supplier.

Details

Journal of Manufacturing Technology Management, vol. 22 no. 6
Type: Research Article
ISSN: 1741-038X

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Book part

Chanaka Edirisinghe, Bogdan Bichescu and Xinjie Shi

In a decentralized supply chain with one supplier and one retailer, a properly designed contract can lead to supply chain coordination. In this chapter, we model the…

Abstract

In a decentralized supply chain with one supplier and one retailer, a properly designed contract can lead to supply chain coordination. In this chapter, we model the selection of an appropriate coordinating contract from a menu of contracts including wholesale price, buyback, and markdown money, while allowing both the supplier and the retailer to assume the roles of Stackelberg leader and/or supply chain captain. This work extends previous literature that assumes that the supplier is both the Stackelberg leader and the supply chain captain. In our models, either agent can make stocking and pricing decisions. Our findings suggest that the feasibility of a coordinating contract depends on the addition of Pareto-improving, profit-sharing conditions that motivate agents to take part in the contract. Further, the selection of an optimal contract is based not only on which agent holds the overstock liquidation advantage, but also on the decision structure of the supply chain. For instance, when the supplier is the Stackelberg leader and the retailer is the supply chain captain, as well as holds the inventory liquidation advantage, and controls the stocking level, then a wholesale price contract can coordinate the supply chain under the proposed Pareto-improving profit sharing, termed Pareto-improving coordination. Additional results and managerial implications are presented in the chapter.

Details

Applications of Management Science
Type: Book
ISBN: 978-1-78052-100-8

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Book part

Arnab K. Basu, Nancy H. Chau and Zahra Siddique

We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion…

Abstract

We study the impact of tax and minimum wage reforms on the incidence of informality. To gauge the incidence of informality, we use measures of the extent of tax evasion, the extent of minimum wage noncompliance, and the size of the informal workforce. Our approach allows us to examine (i) the distinction between determinants of firm-level reported wage distribution and actual wage distribution, (ii) the complementarity of tax and minimum wage enforcement, (iii) the impact that a minimum wage reform has on tax and minimum wage compliance, and (iv) the impact that a tax policy reform has on tax and minimum wage compliance. We conclude with the design of optimal minimum wage and tax policies (even in the complete absence of minimum wage enforcement). We do so based on two objectives derived from popular concerns associated with an unchecked expansion of informality: tax revenue maximization, and poverty alleviation among workers.

Details

Informal Employment in Emerging and Transition Economies
Type: Book
ISBN: 978-1-78052-787-1

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Article

Ryan Larsen, David Leatham and Kunlapath Sukcharoen

Portfolio theory suggests that geographical diversification of production units could potentially help manage the risks associated with farming, yet little research has…

Abstract

Purpose

Portfolio theory suggests that geographical diversification of production units could potentially help manage the risks associated with farming, yet little research has been done to evaluate the effectiveness of a geographical diversification strategy in agriculture. The paper aims to discuss this issue.

Design/methodology/approach

The paper utilizes several tools from modern finance theory, including Conditional Value-at-Risk (CVaR) and copulas, to construct a model for the evaluation of a diversification strategy. The proposed model – the copula-based mean-CVaR model – is then applied to the producer’s acreage allocation problem to examine the potential benefits of risk reduction from a geographical diversification strategy in US wheat farming. Along with the copula-based model, the multivariate-normal mean-CVaR model is also estimated as a benchmark.

Findings

The mean-CVaR optimization results suggest that geographical diversification is a viable risk management strategy from a farm’s profit margin perspective. In addition, the copula-based model appears more appropriate than the traditional multivariate-normal model for conservative agricultural producers who are concerned with the extreme losses of farm profitability in that the later model tends to underestimate the minimum level of risk faced by the producers for a given level of profitability.

Originality/value

The effectiveness of geographical diversification in US wheat farming is evaluated. As a methodological contribution, the copula approach is used to model the joint distribution of profit margins and CVaR is employed as a measure of downside risk.

Details

Agricultural Finance Review, vol. 75 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

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