Optimization and coordination of South-to-North Water Diversion supply chain with strategic customer behavior

The South-to-North Water Diversion （SNWD） Project is a significant engineering project meant to solve water shortage problems in North China. Faced with market operations management of the water diversion system, this study defined the supply chain system for the SNWD Project, considering the actual project conditions, built a decentralized decision model and a centralized decision model with strategic customer behavior （SCB） using a floating pricing mechanism （FPM）, and constructed a coordination mechanism via a revenue-sharing contract. The results suggest the following： （1） owing to water shortage supplements and the excess water sale policy provided by the FPM, the optimal ordering quantity of water resources is less than that without the FPM, and the optimal profits of the whole supply chain, supplier, and external distributor are higher than they would be without the FPM; （2） wholesale pricing and supplementary wholesale pricing with SCB are higher than those without SCB, and the optimal profits of the whole supply chain, supplier, and external distributor are higher than they would be without SCB; and （3） considering SCB and introducing the FPM help increase the optimal profits of the whole supply chain, supplier, and external distributor, and improve the efficiency of water resources usage.

Strategic Admission Behavior and Its Implications: Evidence from a Cardiac Surgery Department

This paper examines a decentralized admission control system with partial capacity sharing in a hospital setting. The admission decision is made by each physician who is assigned a number of dedicated inpatient beds. A physician can “borrow” beds from other physicians if his dedicated beds are all occupied. We seek to understand the impact of the “borrowing cost” on physicians’ admission behavior. We find that (i) If the borrowing cost is low, a physician tends to admit lower-risk patients when either his or others’ capacity utilization is higher;(ii) If the borrowing cost is moderate, a physician tends to admit higher (lower)-risk patients when his (others’) capacity utilization is higher;and (iii) If the borrowing cost is high, a physician tends to admit higher-risk patients when either his or others’ capacity utilization is higher. We then empirically test and validate these findings. Our work demonstrates that when designing strategic admission control systems, it is important to quantify and perhaps then influence the magnitude of the borrowing cost to induce a proper level of competition without sacrificing the benefit of resource pooling.

Dynamical Systems Theory Compared to Game Theory: The Case of the Salamis’s Battle

In this paper, we present an innovative non–linear, discrete, dynamical system trying to model the historic battle of Salamis between Greeks and Persians. September 2020 marks the anniversary of the 2500 years that have passed since this famous naval battle which took place in late September 480 B.C. The suggested model describes very well the most effective strategic behavior between two participants during a battle (or in a war). Moreover, we compare the results of the Dynamical Systems analysis to Game Theory, considering this conflict as a “war game”.

Scalping or Line-sitting:The Role of Speculators

Speculative behaviors have burgeoned in various business settings whereby it is costly for consumers to purchase directly from sellers.This paper examines the values of two typical speculative behaviors,scalping and line-sitting,against a backdrop of markets with resale.We establish a two-stage model in which a monopolist seller sells an item(product or service)to consumers in the first stage,and the item can be traded on a resale platform in the second stage.Speculators have no interests in consumption but incur lower costs in pm-chasing and reselling processes than consumers.In the scalping model,they buy the item first and resell it later to make profits.In the line-sitting model,they earn incomes by serving as surrogates of consumers in purchasing.We first find whether the two phenomena emerge critically depends on the value of consumers'entry cost.Our main results indicate that both speculative behaviors can bring benefits to the seller and resale platform by a demand expansion effect,although through different mechanisms.Under scalping,the entry of speculators as additional buyers always boosts demand in both stages,and achieves a win-win outcome for the seller and platform,although less consumers remain in the market and the resale price decreases.Under line-sitting,demand is enlarged and profits rise in both stages,only when consumers find purchasing directly more time-and money-consuming,because they need to pay an extra service fee to speculators.Moreover,the consumer population gets better off from the two speculative behaviors when their entry cost is relatively high.When both models emerge,scalping may be preferable to line-sitting for the seller,resale platform and consumers,if the cost advantage of speculators in resale transactions is more evident.

ADVANCE SELLING IN THE PRESENCE OF PRODUCT DIFFUSION EFFECT

Product diffusion refers to the phenomenon that the later demand is dependent on the early sales. To investigate how a firm＇s advance selling strategy is affected by the effect of product diffusion, we consider a monopolist seller who sells a fashionable product in a market that comprises of myopic and strategic consumers over two periods （i.e., the advance selling season and the regular selling season）. For a linear product diffusion effect we fred that, when the effect of product diffusion is positive, the seller may set an extremely high advance selling price to induce the strategic consumers to purchase in the regular selling season, which is counter-intuitive. Moreover, the optimal procurement quantity for the seller may increase in the negative effect of product diffusion and decrease in the amount of strategic consumers. When we extend our model to consider a concave quadratic product diffusion effect, however, the optimal procurement quantity is concave in the amount of strategic consumers. Numerical studies are further presented to discuss the managerial insights.