B2B Collaboration : Economic Value and Investment in Technology

To collaborate with partners a company must reengineer its business processes for information and knowledge sharing, and for operations coordination. Digital technologies have proven very effective in supporting such collaborations. Companies may collaborate vertically with their suppliers and customers, or they may collaborate horizontally with other manufacturers. The benefits of collaboration would obviously depend upon how the partners, together, extract economic value from the market. This value would be different in different demand and/or cost scenarios. The decision to invest in collaboration technologies, on the other hand, is usually made by individual companies. There is clearly a tradeoff between the capabilities a company may create through investment in digital technology, and the market benefits it may obtain from collaborating with partners. In this paper we explore (1) how markets can be leveraged to create economic values in collaboration, and (2) how optimal investment (in technology) can be made using these collaboration values

A contingent plan for disaster response

Natural and man-made disasters imply a great deal of uncertainty in terms of potential damage, though it is certain that there would be a huge spike in the demand for relief supplies causing shortages and/or delays in providing aid. Ruptures in the infrastructure (roads, utility, and communication lines) cause additional delays due to repairs. Therefore, the relief providers need to work in collaboration with retailers, and infrastructure service providers for improving responsiveness. The relief providers (government and non government) rely on acquiring and delivering supplies in real time because such actions accompany little risk of resource underutilization, though the cost of real time acquisitions can be high. In contrast, a proactive response, while minimizing acquisition cost, can be very ineffective if demand surges are high. We study a hybrid of reactive and proactive approaches, where the reactive response is contingent upon the disaster intensity exceeding a certain threshold. We show how the threshold value may impact capacity acquisitions and prices and establish the optimality of contingent response. Further, we establish how an infrastructure contract may help reducing the social cost of disaster.Disruption Contingent response Disasters Supply chain contract

Joint Inventory Replenishments with Group Discounts Based on Invoice Value

The study focuses attention on a grouping procedure for the purpose of joint inventory replenishments from a single supplier. The grouping procedure exploits the group discounts available on the total purchase value of a group of index and the economies of scale of order placing costs. In particular it is shown that the optimal groups are formed such that the annual (dollar) usage values of the items do not decrease (may increase or stay the same), from the first to the last group. This is similar in concept to the well-known ABC classification of inventory items. The grouping problem is modeled as a "shortest-path" using the above property.inventory models, joint replenishment, group discounts