139,277 research outputs found

    Inventory drivers in a pharmaceutical supply chain

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    In recent years, inventory reduction has been a key objective of pharmaceutical companies, especially within cost optimization initiatives. Pharmaceutical supply chains are characterized by volatile and unpredictable demands –especially in emergent markets-, high service levels, and complex, perishable finished-good portfolios, which makes keeping reasonable amounts of stock a true challenge. However, a one-way strategy towards zero-inventory is in reality inapplicable, due to the strategic nature and importance of the products being commercialised. Therefore, pharmaceutical supply chains are in need of new inventory strategies in order to remain competitive. Finished-goods inventory management in the pharmaceutical industry is closely related to the manufacturing systems and supply chain configurations that companies adopt. The factors considered in inventory management policies, however, do not always cover the full supply chain spectrum in which companies operate. This paper works under the pre-assumption that, in fact, there is a complex relationship between the inventory configurations that companies adopt and the factors behind them. The intention of this paper is to understand the factors driving high finished-goods inventory levels in pharmaceutical supply chains and assist supply chain managers in determining which of them can be influenced in order to reduce inventories to an optimal degree. Reasons for reducing inventory levels are found in high inventory holding and scrap related costs; in addition to lost sales for not being able to serve the customers with the adequate shelf life requirements. The thesis conducts a single case study research in a multi-national pharmaceutical company, which is used to examine typical inventory configurations and the factors affecting these configurations. This paper presents a framework that can assist supply chain managers in determining the most important inventory drivers in pharmaceutical supply chains. The findings in this study suggest that while external and downstream supply chain factors are recognized as being critical to pursue inventory optimization initiatives, pharmaceutical companies are oriented towards optimizing production processes and meeting regulatory requirements while still complying with high service levels, being internal factors the ones prevailing when making inventory management decisions. Furthermore, this paper investigates, through predictive modelling techniques, how various intrinsic and extrinsic factors influence the inventory configurations of the case study company. The study shows that inventory configurations are relatively unstable over time, especially in configurations that present high safety stock levels; and that production features and product characteristics are important explanatory factors behind high inventory levels. Regulatory requirements also play an important role in explaining the high strategic inventory levels that pharmaceutical companies hold

    Inventories in motion : a new approach to inventories over the business cycle

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    I propose an inventories-in-motion concept which represents a new approach to inventories over the business cycle. This channel has previously been ignored by macroeconomists. I build a general equilibrium business cycle model in which inventories arise naturally as a result of gaps between production of goods and their consumption as goods are distributed. These inventories are actively managed and adjusted to meet consumption and investment needs in the economy. Although conceptually very simple, I show that such inventory behaviour matches a number of stylised facts of aggregate inventories. Nonetheless, my model does not admit an important role for inventory management improvements in declining macroeconomic volatility in the last 30 years

    Fairs for e-commerce: the benefits of aggregating buyers and sellers

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    In recent years, many new and interesting models of successful online business have been developed. Many of these are based on the competition between users, such as online auctions, where the product price is not fixed and tends to rise. Other models, including group-buying, are based on cooperation between users, characterized by a dynamic price of the product that tends to go down. There is not yet a business model in which both sellers and buyers are grouped in order to negotiate on a specific product or service. The present study investigates a new extension of the group-buying model, called fair, which allows aggregation of demand and supply for price optimization, in a cooperative manner. Additionally, our system also aggregates products and destinations for shipping optimization. We introduced the following new relevant input parameters in order to implement a double-side aggregation: (a) price-quantity curves provided by the seller; (b) waiting time, that is, the longer buyers wait, the greater discount they get; (c) payment time, which determines if the buyer pays before, during or after receiving the product; (d) the distance between the place where products are available and the place of shipment, provided in advance by the buyer or dynamically suggested by the system. To analyze the proposed model we implemented a system prototype and a simulator that allow to study effects of changing some input parameters. We analyzed the dynamic price model in fairs having one single seller and a combination of selected sellers. The results are very encouraging and motivate further investigation on this topic

    Labor hoarding and inventories

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    Labor hoarding is a widely believed empirical behavior of firms and a prominent explanation for procyclical labor productivity. Conventional wisdom attributes labor hoarding to labor adjustment costs. This paper argues that the conventional wisdom is inadequate for understanding labor hoarding because it ignores the role of inventories. Since idle labor can be used to produce inventories, why do firms hoard labor when inventory is an option? Using a dynamic rational expectations model of profit-maximizing firms facing demand uncertainty, this paper studies the dynamic interactions between labor hoarding and inventory accumulation. Closed-form decision rules for labor and inventory decisions are derived. The analysis shows that labor adjustment costs alone are far from sufficient for explaining labor hoarding. ; Earlier title: On the optimal volume of labor hoardingProductivity ; Labor supply

    Back to Keynes?

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    After a brief review of classical, Keynesian, New Classical and New Keynesian theories of macroeconomic policy, we assess whether New Keynesian Economics captures the quintessential features stressed by J.M. Keynes. Particular attention is paid to Keynesian features omitted in New Keynesian workhorses such as the micro-founded Keynesian multiplier and the New Keynesian Phillips curve. These theories capture wage and price sluggishness and aggregate demand externalities by departing from a competitive framework and give a key role to expectations. The main deficiencies, however, are the inability to predict a pro-cyclical real wage in the face of demand shocks, the absence of inventories, credit constraints and bankruptcies in explaining the business cycle, and no effect of the nominal as well as the real interest rate on aggregate demand. Furthermore, they fail to allow for quantity rationing and to model unemployment as a catastrophic event. The macroeconomics based on the New Keynesian Phillips curve has quite a way to go before the quintessential Keynesian features are captured.Keynesian economics, New Keynesian Phillips curve, monopolistic competition, nominal wage rigidity, welfare, pro-cyclical real wage, inventories, liquidity, bankruptcy, unemployment, monetary policy

    The Power of Demand: A General Equilibrium Analysis of Multi-Stage-Fabrication Economy with Inventories

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    Due to lack of models that can feature both output- and input-inventories simultaneously, several well known puzzles pertaining to inventory fluctuations and the business cycle have not been well explained by dynamic optimization theory. By presenting a general equilibrium, multi-stage production model of inventories with separate decisions to order, use, and stock input materials and to produce, sell, and store finished output, this paper offers not only a model of input-output inventories but also a neoclassical perspective on the theory of aggregate demand. It shows that due to production/ delivery lags, firms opt to hold both output- and input-inventories so as to guard against demand uncertainty at all stages of production. As a result, not only is production more volatile than sales but also is inputordering more volatile than input-usages, giving rise to a chain-multiplier mechanism that propagates and amplifies demand shocks at downstream towards upstream via input-output linkages. This multiplier effect induced by precautionary inventory investment at each production stage can explain several long-standing puzzles of the business cycle documented in the inventory literature.

    Impact of the Operations Manager's dual role on inventory policy

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    In modern corporations, the Operations Manager’s role in defining of firm’s strategy is becoming more important. In this paper we describe how firms can use this tendency for Operations Managers to make strategic decisions as a mechanism to prevent inventory mismanagement. These managers have incentives to speculate with inventory cost reductions, thereby avoiding sharp reductions in a single period, because it would hinder further reductions in the future. Remarkably, firms may prevent such behavior by stimulating the Operations Managers’ strategic orientation, without losing sight of inventory-efficient management

    Stages Of Discovery And Entrepreneurship

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    In an attempt at a systematic theory of entrepreneurship, this paper connects various literatures, from economics and business. In economics, there are many notions of entrepreneurship, some of which seem to contradict each other. For example, there are notions of entrepreneurship as an equilibrating and as a disequilibrating force. In this paper, these differences are connected with the issue of exploitation and exploration from the business literature. The question is how one can explore while maintaining exploitation. For this, a cycle of discovery has been proposed, with stages of equilibration and disequilibration which build on each other, in process where exploitation leads to exploration. It is proposed that different notions of entrepreneurship can be associated with different stages of that cycle. In this way, different types of entrepreneurship complement each other in an ongoing process of discovery.entrepreneurship;innovation;organizational learning;discovery
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