A Flexible Payment Scheme in Hotel Business

This paper introduces a flexible payment scheme in the hotel business. When a customer makes a reservation for a hotel room, the hotel offers an optional payment scheme (Scheme O). If the customer chooses the Scheme O, he/she makes a non-refundable down payment immediately. Meanwhile, the hotel offers a discount if the customer actually checks in to the hotel. Thus, the payment at check-out time is much lower than the original rental rate. Alternatively, if the customer rejects the Scheme O, the reservation is made under a traditional Scheme (Scheme T), where no down payment is required. However, the customer choosing Scheme T must make a full payment without any discount when he checks out from the hotel. The value of Scheme O depends on customers' cancelation or no-show due to the competition from nearby hotels. We consider two scenarios: 1). the hotel knows the expected value of competitor's rental rate (deterministic case); 2). the hotel knows the stochastic distribution of competitor's rental rate (stochastic case). We have obtained optimal solutions for Scheme O for both deterministic and stochastic cases. Moreover, we also study the interaction between designing a flexible payment scheme and pricing on the rental rate of hotel room

Sustainability in Supply Chains with Behavioral Concerns

Environmental sustainability has received considerable attention in industry and academia. Many firms have begun to adopt sustainability practices, such as investing in cleaner technology and using organic or recyclable materials, to enhance sustainability in supply chains. Such sustainability practices affect corporate social responsibility and business performance. On the other hand, when consumers and supply chain managers make decisions, they may be constrained by behavioral concerns. Behavioral concerns can significantly influence optimization in supply chains. Thus, it is critical to consider the impacts of behavioral concerns on sustainability in supply chains. In this paper, we concisely examine studies in sustainability issues in supply chains with behavioral concerns and introduce the papers featured in this Special Issue

Sustainability in Supply Chains with Behavioral Concerns

Environmental sustainability has received considerable attention in industry and academia. Many firms have begun to adopt sustainability practices, such as investing in cleaner technology and using organic or recyclable materials, to enhance sustainability in supply chains. Such sustainability practices affect corporate social responsibility and business performance. On the other hand, when consumers and supply chain managers make decisions, they may be constrained by behavioral concerns. Behavioral concerns can significantly influence optimization in supply chains. Thus, it is critical to consider the impacts of behavioral concerns on sustainability in supply chains. In this paper, we concisely examine studies in sustainability issues in supply chains with behavioral concerns and introduce the papers featured in this Special Issue

Flexible Payment Schemes in Hotel Business

Also presented at POMS-HK International Conference, 6-7 January 2011, Hong Kon

Managing the Newsvendor Modeled Product System with Random Capacity and Capacity-Dependent Price

We consider a newsvendor modeled product system, where the firm provides products to the market. The supply capacity of the product is random, so the firm receives either the amount of order quantity or the realized capacity, whichever is smaller. The market price is capacity dependent. We consider two types of production cost structures: the procurement case and the in-house production case. The firm pays for the received quantity in the former case and for the ordered quantity in the latter case. We obtain the optimal order quantities for both cases. Comparing with the traditional newsvendor model, we find that the optimal order quantity in both the procurement case and the in-house production case are no greater than that in the traditional newsvendor model with a fixed selling price. We also find that the optimal order quantity for the procurement case is greater than that for the in-house production case. Numerical study is conducted to investigate the sensitivity of the optimal solution versus the distribution of the random capacity/demand

Economic Performance and Emission Reduction of Supply Chains in Different Power Structures: Perspective of Sustainable Investment

Environmental issues have increasingly received attention in both industry and academia. Many firms have started to make sustainable investments, such as adopting the pollution-abatement technologies, to reduce carbon emissions. To investigate the impacts of the sustainable investment on firms’ profit and emission reduction, we consider supply chains with uncertain demand in different power structures. Specifically, we examine the sustainable investment problem in three supply chain power structures, i.e., manufacturer Stackelberg (MS) power structure, vertical Nash (VN) power structure and retailer Stackelberg (RS) power structure. We first derive the optimal decisions for both the retailer and manufacturer in each power structure. Then, by comparing the results in the three power structures, we find that the manufacturer gets benefits from making the sustainable investment, especially in unequal power structures. When the average market size is large (small) enough, both of the supply chain members obtain more profits in the MS (RS) power structure. From an environmental perspective, we find that the emission reduction is more significant in sequential games (i.e., MS and RS power structures) than that in a simultaneous game (i.e., VN power structure). In addition, we conduct some numerical studies and discuss more managerial insights in the paper

Value Co-Creation Behavior in Green Supply Chains: An Empirical Study

As an important supply chain development strategy, green investment and sustainability are concerns of the government and enterprises. However, due to the high cost and low profit of green investment, a large number of small and medium-sized firms can be deterred from their implementation. Value co-creation has become a key measure to solve this problem. This article explores the relationship between the green supply chain (GSC) strategy, value co-creation, and corporate performance in the manufacturing environment, and considers the regulatory effects of internal environmental factors and external environmental pressures on this relationship. Based on data from 115 manufacturers in China, we tested the hypotheses, explained the statistical results, and identified key concerns for implementing GSC through value co-creation. The findings reveal that the GSC strategy can promote a high level of firms’ value co-creation with their supply chain partners, and different value co-creation modes have different effects on firm performance (i.e., operational performance, innovation performance, and financial performance). In addition, the findings indicate that macro-level external pressure and micro-level internal support could enhance such effects. This study enriches the literature with value co-creation modes and GSC management by integrating GSC strategies and value co-creation strategies, providing confidence to the firms and their supply chain partners in value co-creation, thus helping them to better implement a GSC strategy

Sustainable Investment in a Supply Chain in the Big Data Era: An Information Updating Approach

We are now living in the big data era, where firms can improve their decision makings by adopting big data technology to utilize mass information. To explore the effects of the big data technology, we build an analytical model to study the sustainable investment in a supply chain, consisting of one manufacturer and one retailer, by using Bayesian information updating approach. We derive the optimal sustainable investment level for the manufacturer and the optimal order quantity for the retailer. Comparing the results with and without the big data technology, we find that whether the manufacturer should make more sustainable investment when the retailer adopts the big data technology depends on the service level at the retailer side. Interestingly, it is not always optimal for the retailer to adopt the big data technology. We identify the conditions under which the manufacturer and retailer are better off with the big data technology. In addition, we investigate the impact of the number of observations regarding the market information and find that the optimal decisions and profits increase in the number of the observations, if and only if the service level is low