Logistics, Inventory Control, and Supply Chain Management

Industrial Organization,

The Effect of Identity Preserved Premiums on Elevator Grain Flows

The effect of identity preserved premiums on a grain elevator's received volumes is modeled using stochastic simulation across the harvest season. A feedback loop simulates competing elevators' bid prices and tracks producer delivery decisions using arbitrage criteria at competing market elevators. Results provide information about the sensitivity of distance thresholds in producer delivery decisions given IP premiums.Crop Production/Industries,

THE EFFECT OF A CHANGING MARKET MIX IN SEED CORN ON INVENTORY COSTS

Changing product characteristics are causing U.S. seed corn companies to reevaluate their inventory strategies. A simulation model based upon the Economic Order Quantity model is built in @Risk to reflect a shortened product life cycle and product proliferation. Inventory costs levels increase because of increased uncertainty of demand. Empirical results find that shortening the product life cycle and expanding the product line increases total inventory costs by 120.8%, increases the average inventory level (primarily due to added safety stock) by 56.2%, and increases the cost of carryover, stockout cost, and safety stock cost by 143, 165, and 119 %, respectively. To maintain higher levels of customer service with products displaying shorter life cycles, more safety stock must be held to guard against stockouts.Crop Production/Industries,

THE EFFECT OF ENTRY BY WAL-MART SUPERCENTERS ON RETAIL GROCERY CONCENTRATION

The U.S. retail grocery industry shifted from an industry dominated by small grocers serving local markets to one characterized by large retailers present in international markets. Average retail grocery concentration as measured by CR4 increased from 17.8 in 1982 to 43.0 in 1999 (U.S. Census Bureau, 1982; Trade Dimensions Marketing Guidebook, 2000). Wal-Mart's tremendous growth is the catalyst to this change. Although Wal-Mart has been studied from multiple perspectives, little is known about Wal-Mart's effect on market concentration. Understanding Wal-Mart's influence on market concentration is important because an extensive literature shows a pattern linking retail grocery market concentration to increases in retail grocery prices. The objective of this analysis is to evaluate the effects of de novo entry by Wal-Mart Supercenters on retail grocery concentration (CR4). Using a panel dataset complied from Trade Dimensions Marketing Guidebook and Market Scope publications, the effect of Wal-Mart Supercenters on changes in retail grocery concentration was estimated. The results show that existing Wal-Mart Supercenter operations and entry by Wal-Mart Supercenters significantly increase the rate of change in retail grocery concentration as measured by CR4.Marketing,

Effects of Supply Chain Management for Food and Grocery Companies

Mass merchandisers’ entry into food retailing threatens traditional grocers’ market share. In response, traditional grocers and food manufacturers adopted Efficient Consumer Response (ECR) as an industry-wide set of supply chain management strategies that focused on cutting costs and improving product assortment, thereby improving inventory and financial performance levels. However, research findings and trade press reports question whether adopting supply chain management strategies will achieve these goals. The results of this analysis strongly support the proposition that the adoption of an ECR strategy pays off. However, the growth in profit does not appear to come from improved performance for traditional inventory measures. The driving force behind these improved financial measures can be attributed to the cash conversion cycle. Thus, the time spent in developing close relationships with buyers or suppliers and the investments in information technology have been justified. Size matters; ECR is more effective due to economies of scale and information technology. However, this may lead to more consolidations because all firms may not have sufficient capital to invest in ECR initiatives. In short, to remain competitive ECR strategies should strongly be considered by firms that are lagging in implementation.Efficient Consumer Response, supply chain management, inventory, cash conversion cycles, financial performance, grocery, food manufacturing, Financial Economics, Industrial Organization,

HOG PRODUCER INVESTMENT IN VALUE-ADDED AGRIBUSINESS: RISK AND RETURN IMPLICATIONS

Although producers have been enticed into investment in value-added agribusiness the risk and return impacts have not been quantified. A spreadsheet simulation model is used to evaluate how investments by hog farmers in slaughter plants and other alternatives affect returns and risk. Results suggest that hog producer investment in value-added agribusiness is efficient.Value-Added, Producer Investment, Financial Economics, Livestock Production/Industries,

The Impact of Tariffs on U.S. Exports of Value-Added Wheat Products

International Relations/Trade,

Internet and e-Commerce Use by Agribusiness Firms: 2004

In 2001, the dot.com bubble burst and U.S. e-commerce growth slowed. Slower e-commerce growth may signal changes in the use and perceptions of the Internet and e-commerce in agribusiness companies. Agribusiness firm managers were surveyed in 2004 to identify agribusiness use of the Internet and e-commerce and to solicit their perceptions about the Internet and e-commerce. The survey was developed from a similar survey conducted in 1999. In 2004, agribusiness firms were using e-commerce more with their suppliers than with their customers. Perceptions regarding Internet and e-commerce varied by the intensity of e-commerce use. Given the variety of opinions regarding the Internet and e-commerce, e-commerce capabilities in the agribusiness industry will remain highly diverse in the near term.agribusiness, e-commerce, Internet, Agribusiness, Research and Development/Tech Change/Emerging Technologies,

ADOPTION OF E-COMMERCE STRATEGIES FOR AGRIBUSINESS FIRMS

This paper analyzes the factors guiding Internet and e-commerce implementation by agribusiness firms. The relationship between Internet/e-commerce strategies and manager perceptions on the barriers and factors to e-commerce adoption are analyzed in a supply-chain management framework. Using factor analysis and an ordered Probit model, results indicate that the implementation of Internet/e-commerce strategies is more likely to be adopted in larger firms with a global scope. Also, manager perceptions regarding supply-chain functions influencing transaction costs are more strongly associated with Internet/e-commerce adoption than other functions influencing production costs.e-commerce, supply-chain, transaction costs, factor analysis, order Probit, Agribusiness, Marketing,

Global Market Segmentation for Value-Added Agricultural Products

International Relations/Trade,