Optimal inventory decisions for a risk-averse retailer when offering layaway

The final publication is available at Elsevier via http://dx.doi.org/10.1016/j.ejor.2019.12.004. © 2020. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/Layaway allows economically disadvantaged budget-constrained consumers to purchase expensive items through amortized payments and nominal program fees, as opposed to using high-interest financing options such as credit cards and payday loans. We consider a risk-averse retailer’s ordering decisions when offering a layaway program. We use the net loss and total loss functions, found in the literature, to determine a risk-averse retailer’s optimal order quantity under conditional value-at-risk (CVaR). We next analyze the effects of the model parameters, retailer’s risk aversion, the market default rate, enrollment fee, cancellation fee and so on, on the optimal order quantity decisions. We show that the optimal order quantity depends on different loss functions and different demand distribution functions. Further, we show that as market default rate increases or the retailer becomes more risk averse, then a rational retailer will not offer a layaway program.Stanko Dimitrov thanks Natural Sciences and Engineering Research Council for partially supporting this research. Daao Wang thanks China Scholarship Council (CSC), National Natural Science Foundation of China (Grant No. 71573124), Jiangsu Province University Philosophy and Social Sciences for Key Research Program (Grant No. 2019SJZDA036), Social Science Foundation of Jiangsu Province (Grant No. 18EYB015) for partially supporting this research

Impacts of Inspection Errors and Warranty Costs on a Complex Product Supply Chain under Different Development Modes

With the increasing competition in the complex product industry, discussions regarding quality and price decision-making within the supply chain have become widespread. Nevertheless, as product development modes evolve, the influence of inspection errors and warranty costs on a complex product supply chain has received limited attention. In this paper, we apply a nonlinear demand function and develop game models to depict the quality and price decision problem in a complex product supply chain. We derive equilibrium decisions under two distinct product development modes, the traditional mode and the customized mode, with detailed analyses. Furthermore, numerical studies are conducted to illustrate how equilibrium decisions fluctuate in response to inspection errors, warranty costs and uncertain demand, yielding interesting findings. We also explore the impact of information asymmetry. Ultimately, significant insights and implications are put forward

Strategic Analyses for a Cross-Basin Water Pollution Conflict Involving Heterogeneous Sanctions in Hongze Lake, China, within the GMCR Paradigm

The graph model for conflict resolution (GMCR) methodology was enhanced in this research for addressing cross-basin water pollution conflicts involving heterogeneous sanctions, as a more intuitive and straightforward definition for mixed unilateral improvements was proposed, followed by an integrated procedure for performing mixed stability analyses. Furthermore, the cross-border water pollution dispute that occurred in 2018 in Hongze Lake, China, is systematically modeled and strategically analyzed for the first time, using the improved GMCR method. In addition, an evolution analysis was carried out within the framework of GMCR for verifying the applicability of the eco-compensation mechanism in addressing cross-basin water pollution disputes. This case study demonstrates that the heterogeneity of sanctioning opponents could influence equilibrium outcomes and even change the evolution of conflict situations. Moreover, the developed novel approach is able to accurately predict the equilibrium outcomes of the conflict and provide more strategic insights and valuable findings in making effective conflict resolutions for solving cross-basin water pollution conflicts