Conversations with Supply Chain Managers

This paper documents the process of supply chain formation to bring a new product to market, based on phone and personal interviews with supply chain professionals and consultants from a range of industries including but not restricted to high tech, consumer products and services, entertainment, food, furniture, family and entertainment, consulting and other b-to-b services, automotive, and large complex engineered products. Most of these interviews were conducted between September 2009 and January 2010, but some earlier interactions have been incorporated as appropriate. Potentially identifying information has been removed to preserve anonymity, which was promised to the respondents.http://deepblue.lib.umich.edu/bitstream/2027.42/76027/1/1145_Lovejoy.pd

Bargaining Chains (Long Version)

We consider a firm that designs a new product and wishes to bring it to market, but does not have ownership or control over all of the resources required to make that happen. The firm must select and contract with one of several possible tier 1 suppliers for necessary inputs, who do the same with their (tier 2) suppliers, etc. This general situation is common in industry. We assume tier-wise negotiations, sole sourcing within each tier, complete local information, and horizontal competition. We develop a bargaining-based solution to the negotiations between two adjacent multi-firm tiers and show its consistency with familiar solution concepts from the theories of bargaining and cooperative games. We then link up multiple bargaining modules to generate chain-wide predictions for efficiency and profitability in supply chains with an arbitrary number of tiers and an arbitrary number of firms per tier. We investigate the implications of the results for investments in process improvements or supplier development.http://deepblue.lib.umich.edu/bitstream/2027.42/76028/1/1146_Lovejoy.pd

Efficient Structures for Innovative Social Networks

What lines of communication among members of an organization are most effective in the early, ideation phase of innovation? We investigate this question with a recombination and selection model of knowledge transfer operating through a social network. We measure cost in human time, and seek efficient social network structures in the time--total cost plane (minimize ideation time subject to an upper bound on total cost, or vice versa) and in the time--cost per period plane, with a similar interpretation. Our results suggest that efficiently innovative organizations look nothing like what one intuitively associates with standard formal organizations with strict and unchanging lines of communication, nor do they conform with what one might expect from static social network representations of communication patterns. Rather, ideation is accelerated when people dynamically churn through a large (ideally the entire population) set of conversational partners over time, which naturally begets short path lengths and eliminates information bottlenecks. In organizations with these features group meetings do not help and can hurt the process, because many parallel conversations can achieve the same or better results as one-to-many communications. A family of networks called the complete wheel-stars emerges as an important family on the time-cost efficient frontier. Wheel-star graphs have a completely connected clique of agents at the center, with all other agents connected to the core but not to each other; the star and the complete graph are its extreme elements. We discuss the consequences of these results for organizations and sociometric analyses.http://deepblue.lib.umich.edu/bitstream/2027.42/64992/1/1136_lovejoy.pd

Bargaining in Supply Chains (Long Version)

We study experimentally bargaining in a multiple-tier supply chain with horizontal competition and sequential bargaining between tiers. Our treatments vary the cost differences between firms in tiers 1 and 2. We measure how these underlying costs influence the efficiency, negotiated prices and profit distribution across the supply chain, and the consistency of these outcomes with existing theory. We find that the structural issue of cost differentials dominates personal characteristics in explaining outcomes, with profits in a tier generally increasing with decreased competition in the tier and increasing with decreased competition in alternate tiers. The Balanced Principal model of supply chain bargaining does a good job explaining our data, and outperforms the common assumption of leader-follower negotiations. We find a significant anchoring effect from a firm's first bid but no effect of the sequence of those bids, no evidence of failure to close via escalation of commitment, and mixed results for a deadline effect. We also find an interesting asymmetry between the buy and sells sides in employed bidding strategy. The buy side makes predominantly concessionary offers after the initial anchor, but a significant number of sell side firms engage in aggressive anti-concessionary bidding, a strategy that is effective in that it increases prices while not compromising closure rates.http://deepblue.lib.umich.edu/bitstream/2027.42/109717/1/1259_Lovejoy.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/109717/4/1259_Lovejoy_Mar2015.pdfDescription of 1259_Lovejoy_Mar2015.pdf : Long Version March 201

Little’s Law Flow Analysis of Observation Unit Impact and Sizing

Expanding hospital capacity by developing an observation unit may be an important strategy in congested hospitals. Understanding the principles for evaluating the potential impact and appropriate sizing of an observation unit is important. The objective of this paper is to contrast two approaches to determining observation unit sizing and profitability, real options, and a flow analysis based on Little’s Law. Both methods have validity and use similar data sets. The Little’s Law approach has the advantage of providing an estimate of appropriate size for the unit and a natural internal consistency check on data. The benefits of an observation unit can depend critically on assumptions regarding backfill patients, and minor changes in data or assumptions can translate into significant changes in annual financial consequences. Using both the real options and the Little’s Law approaches provides some internal consistency checks on data and assumptions. Both are sufficiently simple to be easily mastered and conducted. Using these two simple and accessible methods in parallel for computing the size and financial consequences for an observation unit is recommended.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/98762/1/j.1553-2712.2010.00969.x.pd

Designing Incentives in Startup Teams: Form and Timing of Equity Contracting

Entrepreneurial teams assign equity positions in their startups using a term sheet that details equity splits and conditions for being granted those splits. It is conventional wisdom in the entrepreneurial press that equal splits are poor choices. The conventional logic is that by not connecting rewards to contribution level equal split contracts can encourage free-riding behaviors. We experimentally test this conventional wisdom, among other entrepreneurial contracting hypotheses. Our results confirm the relationship between equal splits and depressed effort and contribution, but suggest a different causal sequence relative to conventional wisdom. Rather than the contract form being the primitive and the behavior the derived consequence, our results suggest the reverse. The differences in contract performance are driven primarily by the sorting of high contributors into non-equal contracts and of low contributors into equal contracts. However, delaying the contracting mitigates these sorting effects, reducing the effort gap between contracts. Taken together, our results suggest that both investors and founders should pay as much (or more) attention to personality type as they do to contract form, but if one is stuck with a given set of personalities delayed contracting (more so than contract form) can improve performance.https://deepblue.lib.umich.edu/bitstream/2027.42/138118/1/1372_Kagan.pd

Pre-auction Investments by Type-conscious Agents

This paper examines pre-auction investments made by asymmetric agents that compete for a supply contract from a monopolist principal. Agents are privately aware of their managerial efficiencies which determine how well they can leverage fixed investments to reduce their variable costs for servicing the contract, and they privately choose investment levels prior to the procurement mechanism being declared by the principal. Hence, the distribution of "types" that is standard in the principal-agent literature is, here, endogenously determined by the private actions of the agents. The principal declares a mechanism that is optimal for her, after agents have made their private investment decisions. We show that in equilibrium all optimal investment strategies by competing firms will have the form of investing as if there is no reservation price up to a critical level of managerial type, and investing minimally thereafter. This feature, however, implies that only trivial pure strategy equilibria can exist when the principal has any reasonably competitive alternative for servicing the contract. This is because in these cases an optimal mechanism induces agents to adopt a discontinuous investment strategy which provides the principal an incentive to deviate from the declared mechanism. An intuitive extrapolation of the extant literature to our context (in which agents adopt technologies featuring a fixed-variable cost trade-off) would suggest that we would see ``underinvestment," manifesting itself as lower fixed and higher variable cost technologies in the industry. However, this intuition is either sustained trivially or cannot be sustained in pure strategies when the principal has any reasonable outside options for supply. The question of what cost structure we will see in equilibrium in these contexts will require future effort, and a consideration of mixed strategies.http://deepblue.lib.umich.edu/bitstream/2027.42/48743/1/1057-Lovejoy.pd

Fish biogeography in the â Lost Worldâ of the Guiana Shield: Phylogeography of the weakly electric knifefish Gymnotus carapo (Teleostei: Gymnotidae)

AimThe Guiana Shield region exhibits extraordinary topography that includes sheer, flatâ topped mountains (tepuis) atop an upland platform. Rivers of the eastern Pakaraima Mountains descend to Atlantic coastal lowlands, often traversing spectacular rapids and waterfalls. For fish species distributed in both uplands and lowlands, it is unclear whether these rapids and waterfalls present population or biogeographical boundaries. We sought to test this using the geographically widespread bandedâ electric knifefish (Gymnotus carapo) as a model.LocationThe Guiana Shield region of South America.MethodsWe sampled 60 Gymnotus carapo specimens from the Guiana Shield region, and 75 G. carapo and closely related species from other parts of South America. We sequenced the mitochondrial cytochrome b gene and an intron from the nuclear S7 ribosomal protein gene, and used maximum likelihood and Bayesian treeâ building approaches to generate phylogenetic trees of haplotypes.ResultsHaplotype sharing is minimal between populations separated by elevational barriers. We found evidence for two main haplotype clades in the Guiana Shield: one distributed in Atlantic coastal regions that includes most lowland samples, and one inland that includes most upland samples. Inland Guiana samples are more closely related to samples from the Amazon basin than to those of Atlantic coastal regions. A single sample from Tafelberg tepui in Suriname was most closely related to the Atlantic coastal lineages.Main conclusionsRiverine barriers that result from steep elevational gradients in the Guiana Shield inhibit gene flow between uplands and lowlands, even for a widely distributed species. Biogeographical relationships of Guiana Shield G. carapo are complex, with most upland lineages showing affinities to the Amazon basin, rather than to nearby lowland drainages of the Atlantic coast.Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/142908/1/jbi13177.pdfhttps://deepblue.lib.umich.edu/bitstream/2027.42/142908/2/jbi13177_am.pd

Coordinated Activation of Candidate Proto-Oncogenes and Cancer Testes Antigens via Promoter Demethylation in Head and Neck Cancer and Lung Cancer

Background: Epigenetic alterations have been implicated in the pathogenesis of solid tumors, however, proto-oncogenes activated by promoter demethylation have been sporadically reported. We used an integrative method to analyze expression in primary head and neck squamous cell carcinoma (HNSCC) and pharmacologically demethylated cell lines to identify aberrantly demethylated and expressed candidate proto-oncogenes and cancer testes antigens in HNSCC. Methodology/Principal Findings: We noted coordinated promoter demethylation and simultaneous transcriptional upregulation of proto-oncogene candidates with promoter homology, and phylogenetic footprinting of these promoters demonstrated potential recognition sites for the transcription factor BORIS. Aberrant BORIS expression correlated with upregulation of candidate proto-oncogenes in multiple human malignancies including primary non-small cell lung cancers and HNSCC, induced coordinated proto-oncogene specific promoter demethylation and expression in non-tumorigenic cells, and transformed NIH3T3 cells. Conclusions/Significance: Coordinated, epigenetic unmasking of multiple genes with growth promoting activity occurs i

Habitat Fragmentation, Variable Edge Effects, and the Landscape-Divergence Hypothesis

Edge effects are major drivers of change in many fragmented landscapes, but are often highly variable in space and time. Here we assess variability in edge effects altering Amazon forest dynamics, plant community composition, invading species, and carbon storage, in the world's largest and longest-running experimental study of habitat fragmentation. Despite detailed knowledge of local landscape conditions, spatial variability in edge effects was only partially foreseeable: relatively predictable effects were caused by the differing proximity of plots to forest edge and varying matrix vegetation, but windstorms generated much random variability. Temporal variability in edge phenomena was also only partially predictable: forest dynamics varied somewhat with fragment age, but also fluctuated markedly over time, evidently because of sporadic droughts and windstorms. Given the acute sensitivity of habitat fragments to local landscape and weather dynamics, we predict that fragments within the same landscape will tend to converge in species composition, whereas those in different landscapes will diverge in composition. This ‘landscape-divergence hypothesis’, if generally valid, will have key implications for biodiversity-conservation strategies and for understanding the dynamics of fragmented ecosystems