We investigate the role of incentives set by a parent firm for competition among its subsidiaries. In a Cournot experiment four subsidiaries of the same parent operate in the same market. Parents earn a specific share of the joint profit and can choose how to distribute the remaining surplus (or loss). Results show that parents allocating profits equally among their subsidiaries reach outcomes ...

Instrumental efficiency wage models predict an inverse relationship between wages and supervision with this relationship becoming more pronounced amongst firms that participate in some form of employee sharing. To be sure, our theoretical exposition predicts that an increase in total remuneration will elicit a larger cut in optimal monitoring in ‘sharing’ rather than ‘non sharing’ firms. In thi...

Some studies suggest that fishery yields can be higher with reserves than under conventional management. However, the economic performance of fisheries depends on economic profit, not fish yield. The predictions of higher yields with reserves rely on intensive fishing pressures between reserves; the exorbitant costs of harvesting low-density populations erode profits. We incorporated this effec...

A small printing company in Johannesburg has experienced a steady decline in profits over the past four years, and wishes to reverse this trend. The objective of this study was to assess the implementation of Lean Manufacturing in that context, and to determine the impact it had on the printing company’s profit margin. A process-mapping of the printing organization was performed; this process-m...

Recent years have witness the pervasive supply disruptions and their impacts on supply chain performance. We investigate single or dual sourcing emergency model with partial supply disruptions. Introducing the concept of disruption proportion and delivery allocation, we first explore partial interrupted proportion of main supplier and delivery proportion of backup supplier. Under partial disrup...

Once a new product is available, if the company starts the sales without building an initial inventory (myopic policy), the demand for the product grows rapidly due to extensive word of mouth spreading from past sales and soon may exceed the firm’s capacity resulting in lost sales. To avoid this problem, companies generally delay product launch to build sufficient inventory prior to starting sa...

When designing a new product, developers must balance the expected profit of improving the design against the cost and time requirements of doing so. We investigate this tradeoff by modeling the prototyping stage of product development as a probabilistic search process. We study optimal policies for single-period and infinitehorizon problems and derive closed-form solutions for the case of prof...

In this paper exponential distribution is implemented as a demand distribution in newsvendor model with two different and conflicting goals. The first goal is the standard objective of maximization of the expected profit. The second one is to maximize the probability of exceeding the expected profit, called survival probability. Using exponential distribution as the demand distribution allows u...

In this paper the problem of establishing the optimal trade-off between investment cost for the retrofit and expected revenue that result from increasing flexibility in systems described by nonlinear models is addressed. A systematic procedure is first proposed for constructing the cost versus flexibility curve. A stochastic optimization method is then presented for evaluating the expected opti...

We study the design of pricing mechanisms and auctions when the mechanism designer does not know the distribution of buyers’ values. Instead the mechanism designer receives a set of samples from this distribution and his goal is to use the sample to design a pricing mechanism or auction with high expected profit. We provide generalization guarantees which bound the difference between average pr...