Manufacturer competition in the nanostore retail channel

In emerging markets, a significant share of the revenue of Consumer Packaged Goods (CPG) manufacturers comes from the traditional retail channel, composed of millions of independent family-owned nanostores. Nanostore owners typically have limited cash flow and are driven by the modest goal of making a living. It is common practice for manufacturers to dispatch sales representatives to visit nanostores directly in order to drive product sales. We study the sales visit and pricing decisions of manufacturers supplying to a nanostore over an infinite time horizon. We first consider the case of a single manufacturer and show that the manufacturer should price the product such that the nanostore can earn enough to pay for his subsistence spending. Such a supplier-retailer mutual reliance relationship continues to hold for the two-manufacturer model where the manufacturers compete for the nanostore's cash resources under shelf space limitations. Further, under some conditions, the two manufacturers can mutually benefit, that is, instead of jeopardizing each other through competition, they contribute collectively to satisfy the nanostore family's subsistence needs such that nanostores are more likely to survive; besides, each can earn more profit than in a single-supplier setting. The results can help us understand the current industry dynamics in this vital sector.</p

Sustainability analysis of the CITYLAB solutions

The objective of the CITYLAB project is to develop knowledge and solutions that result in roll-out, upscaling and further uptake of cost effective strategies, measures and tools for emission free city logistics. CITYLAB includes a set of Living Laboratories where promising logistic concepts are implemented related to emissions free city logistics. The objective of this report is to assess the impact that would occur when the CITYLAB implementations would be scaled up. The main challenge that has to be overcome is the difference in type, availability and detail of data from different CITYLAB implementations. This assessment of the impacts of upscaling is done by integrating all stakeholders’ opinions in the evaluation process and taking into account the costs and benefits for society as well as the financial viability for industry partners

Impact and process assessment of the seven CITYLAB implementations

CITYLAB focuses on four axes that call for improvement and intervention: •Highly fragmented last-mile deliveries in city centres •Inefficient deliveries to large freight attractors and public administrations •Urban waste, return trips and recycling •Logistics sprawl Within these axes, the project supports seven implementations that are being tested, evaluated and rolled out. An implementation is defined as the process of preparing, testing and putting into practice a new service or a new way of operating or organising logistics activities. The objective of this report is to present an assessment of the effects and consequences of the implementations as they are conducted. For each case, we summarise the process leading to the application of a specific technical and managerial solution, and present the outcomes. For each implementation, we present •Problem and aim •Description of the solution •Implementation process •Effects and consequences •Challenges ahead •Lessons and generalisation of results This deliverable provides a complete picture of the evolvement of the implementations during the CITYLAB project and final versions of the process and impact assessment

Inventory and Service Optimization for Self-serve Kiosks

In the retail industry, labor costs constitute a big chunk of total operating costs and retailers are advancing towards process automation to minimize their operating costs and to provide reliable services to their customers. One such example of technological advancement is self-service kiosks that are becoming an integral part of our life, whether it be for cashing a cheque, self-checkout at retail stores, airports, hospitals, or checkout-free stores. Although self-serve kiosks are cost-effective due to low setup and operating costs, the technology is relatively new and poses new research questions that have not been studied before. This thesis explores and addresses strategic and operational challenges associated with self-serve kiosk technology. The first part of the thesis is based on a collaboration with MedAvail Technologies Inc., a Canada-based healthcare technology company, developing self-serve pharmacy kiosk technology to dispense over-the-counter and prescription drugs. MedAvail faces several challenges related to assortment and stocking decisions of medications in the kiosk due to its limited capacity and the thousands of drugs being ordered in various quantities. We address these challenges by analyzing pharmaceutical sales data and developing a data-driven stochastic optimization approach to determine optimized kiosk storage capacity and service levels and recommend assortment and stocking decisions under supplier-driven product substitution. A column-generation based heuristic approach is also proposed to solve the models efficiently. The second part of the thesis extends the self-serve kiosk inventory planning problem to a robust optimization (RO) framework under fill rate maximization objective. We propose a data-driven approach to generate polyhedral uncertainty sets from hierarchical clustering and the resulting RO model is solved using column-and-constraint generation and conservative approximation solution methodologies. The proposed robust framework is tested on actual pharmacy sales data and randomly generated instances with 1600 products. The robust solutions outperform stochastic solutions with an increase in out-of-sample fill rate of 5.8%, on average, and of up to 17%. Finally, the third part of the thesis deals with an application of pharmacy kiosks to improve healthcare access in rural regions. We present a mathematical function to model customer healthcare accessibility as the expected travel distance when multiple pharmacy location (store and kiosks) choices are available to customers. Customer choice behavior is modelled using a multinomial logit (MNL) model where customer utility for a pharmacy location depends on travel distance which is not exactly known but rather depends on kiosk fill rate. We model the problem as a newsvendor problem with fill-rate dependent demand to decide on kiosk stock level (or capacity) to minimize the weighted sum of expected travel distance and total cost. Sensitivity analysis over modelling parameters is carried out to derive insights and to determine problem settings under which pharmacy kiosks improve customer accessibility

Standard-essential patents, innovation, and competition

The three essays collected in this PhD thesis use economic theory to study policy questions related to standard-essential patents. The first essay provides a theoretical framework to analyse the incentives for multiple complex technologies and shows how the incentives given by the competitive outcome may be suboptimal if there are both substitute and complementary inventions. The second essay examines a proposal to introduce essentiality checks for standard-essential patents. The essay identifies a trade-off between reducing litigations and providing excessive incentives to innovate. The third essay demonstrates a potential anticompetitive behaviour by an integrated firm who may use market power in a complementary market to evade policy restrictions on the licensing of standard-essential patents

Essays on credit rating agencies in China

The four essays collected in this PhD thesis focuses on the research of credit rating agencies (CRAs) in China. The first chapter introduces the overview of the Chinese bond market and rating industry. The second chapter mainly analyses the impact of the failure to accurately predict bond defaults on CRAs. The third chapter studies the relationship between issuer importance and credit ratings. And the fourth chapter investigates whether the reputational capital of credit rating agencies affects their rated bonds

Essays on consumer finance

This PhD thesis consists of four chapters and provides insights into the complex and understudied personal loan sector in the United States, examining effects of various regulatory restrictions on the supply of personal loans. Personal loans—those for a variety of purposes, such as debt consolidation, medical bills, or vacations—are provided by depository institutions, finance companies, and FinTech lenders, and are subject to a multilayered and dynamic regulatory environment. The first chapter examines the effects of the notoriously low Arkansas rate ceiling on credit use by nonprime consumers in the state, who are especially vulnerable to credit rationing because of the low-rate ceiling. The second chapter demonstrates that following the CARD Act, consumer finance loans were a substitute for subprime cards for risky consumers when rate ceilings permit such loans to be profitable. The third chapter shows that FinTech lenders partner with specialist banks in order to make use of the banks’ interest rate exportation ability (thus circumventing usury laws) and target marginal consumers located in states with low interest rate ceilings, where finance companies are unable to lend profitably. The fourth chapter reveals that the Payday Rule temporarily decreased the supply of consumer credit from finance companies, payday lenders, and vehicle title lenders, and led to a substitution between types of loans issued by finance companies