REVISION: The Structure of Grocery Retail Markets and Food Waste
We examine the impact of grocery-store density and grocery-market concentration on food waste, using a two-echelon perishable-inventory model. Fresh-grocery stores, differentiated by their locations (upstream tier), maintain inventories and compete by setting prices and/or service levels. Households (downstream tier) choose amongst stores and make grocery-replenishment decisions. The expiring inventory at each tier is the food waste. We find that the effects on household and store food waste are opposite, yet household waste dominates store waste and thus determines the overall effects. Higher store density changes household purchase behavior because of closer stores, and due to different equilibrium prices/service-levels that ensue in denser markets. We characterize conditions under which these effects reduce/increase food waste. Numerical calibration shows that, for all plausible cases, increasing store density reduces food waste, achieving a 6%-14% waste reduction for a 10% ...
REVISION: Bike-Share Systems: Accessibility and Availability
The cities of Paris, London, Chicago, and New York (among many others) have set up largescale bike-share systems to facilitate the use of bicycles for urban commuting. This paper estimates the impact on bike-share ridership of two facets of system performance: accessibility (how far the user must walk to reach stations) and bike-availability (the likelihood of finding a bicycle). Our analysis is based on a structural demand model for spatially differentiated products that includes distinct mechanisms for the short and long-term effects of bike-availability (via lost sales and increased user-interest, respectively). The bike-share context, and the distinct mechanisms require us to go beyond past work in incorporating real time changes in product (bike)-availability information, and including much finer data on potential demand sources. These enhancements render traditional estimation methods computationally infeasible; we transform our estimation from the time domain to the ...
New: The Use and Value of Social Network Information in Selective Selling
We consider the use and value of social network information in selectively selling goods and services whose value derives from exclusive ownership among network connections or friends. Our stylized model accommodates customers who are heterogeneous in their number of friends (degree) and their proclivity for social comparisons (conspicuity). Firms with information on either (or both) of these characteristics can use it to make a product selectively available and increase their profits by better managing the exclusivity-sales trade-off. We find that the firm’s best targets are high-conspicuity customers within intermediate-degree segments – in contrast with the practice of targeting high degree customers. We also find that information about degree is more valuable than information about conspicuity. Surprisingly, strategies informed only by degree perform no worse than those informed by degree and conspicuity both, yet the opposite is not true. Customer self-selection is a perfect ...
REVISION: Supply Networks for Relational Sourcing
Making long-term commitments to exclusive suppliers, or relational sourcing, is critical in industries where quality includes social, ethical, and technical elements concerning which contractual terms would be costly to verify or enforce. This study identifies supplier network topologies that best facilitate such relational sourcing. We consider a brand-owning firm that sources in an ongoing fashion from a general multi-tier network of idiosyncratic suppliers. Alternate network designs are compared in terms of three defining structural properties: network scope, the number of suppliers at each tier in the network; degree of control/delegation, the number of tiers in the network; and network connectivity, the connections between firms located at different tiers. Our analysis reveals that neither network connectivity nor the distribution of costs among suppliers affects the ability to sustain relational sourcing. Networks characterized by more delegation or less scope have the most to ...
REVISION: Online Grocery Retail: Revenue Models and Environmental Impact
This paper compares the financial and environmental performance of two revenue models for the online retailing of groceries: the per-order model, where customers pay for each delivery; and the subscription model, where customers pay a set fee and receive free deliveries. We build a stylized model that incorporates (i) customers with ongoing uncertain grocery needs and who choose between shopping offline or online and (ii) an online retailer that makes deliveries through a proprietary distribution network. We find that subscription incentivizes smaller and more frequent grocery orders, which reduces food waste and creates more value for the customer; the result is higher retailer revenues, lower grocery costs, and potentially higher adoption rates. These advantages are countered by greater delivery-related travel and expenses, which are moderated by area geography and routing-related scale economies. Subscription also leads to lower food waste-related emissions but to higher ...
New: The Benefits of Decentralized Decision-Making in Supply Chains
The inefficiency of decentralized decision-making is one of the most influential findings of the supply chain coordination literature. This paper shows that with the possibility of continuing trade, decentralization can be beneficial in improving supply chain performance. In a supply chain with decentralized decision-making and continuing trade, it is easier to incentivize players to coordinate on efficient actions. There are more gains to be shared from coordination, and by virtue of each ...
REVISION: The Relational Advantages of Intermediation
This paper provides a novel explanation for the use of supply chain intermediaries such as Li & Fung Ltd.. We find that even in the absence of the well-known transactional and informational advantages of mediation, intermediaries improve supply chain performance. In particular, intermediaries facilitate responsive adaptation of the buyers’ supplier base to their changing needs while simultaneously ensuring that suppliers behave as if they had long-term sourcing commitments from buying firms ...