Pui-Sze Chow

Sustainability investment under cap-and-trade regulation

Carbon emission abatement is a hot topic in environmental sustainability and cap-and-trade regulation is regarded as an effective way to reduce the carbon emission. According to the real industrial practices, sustainable product implies that its production processes facilitate to reduce the carbon emission and has a positive response in market demand. In this paper, we study the sustainability investment on sustainable product with emission regulation consideration for decentralized and centralized supply chains. We first examine the order quantity of the retailer and sustainability investment of the manufacturer for the decentralized supply chain with one retailer and one manufacturer. After that, we extend our study to the centralized case where we determine the production quantity and sustainability investment for the whole supply chain. We derive the optimal order quantity (or production quantity) and sustainability investment, and find that the sustainability investment efficiency has a significant impact on the optimal solutions. Further, we conduct numerical studies and find surprisingly that the order quantity may be increasing in the wholesale price due to the effects of the sustainability and emission consideration. Moreover, we investigate the achievability of supply chain coordination by various contracts, and find that only revenue sharing contract can coordinate the supply chain whereas the buyback contract and two-part tariff contract cannot. Important insights and managerial implications are discussed.

Perception of fashion sustainability in online community

The issue of sustainability is crucial in fashion business and has received considerable attentions from the consumers. In this paper, we investigate the change in people’s concerns on sustainable fashion by using secondary data collected from two major online fashion forums from 2004 to 2012. Our analysis is taken by a cross-time approach and the results reflect that forum discussions over sustainable fashion have changed over time. While topics on sustainable production and remanufacturing, green information sharing, and green attitude and education once received heated discussions in the mid-2000s, green marketing has become the main focus lately. Our results imply that provision of green information by fashion retailers is a way to educate consumers and improve their awareness in the importance of sustainability. It is also beneficial to stimulate consumers’ purchase decision of sustainable fashion. The findings provide industry insights for practitioners to better develop and promote sustainable fashion.

Impacts of Minimum Order Quantity on a Quick Response Supply Chain

In this paper, we study the impacts of imposing a minimum order quantity (MOQ) on a two-echelon supply chain implementing quick response (QR) and consider the issue of coordination for such a system. By exploring the QR-MOQ supply chain system, we analytically prove that the retailers expected profit (REP) is nonincreasing in the MOQ. We further find that the MOQ that maximizes the manufacturers expected profit can significantly reduce the REP and the supply chains efficiency. Understanding that the static nature of the preagreed MOQ hinders the information updating capability brought about by QR, which, in turn, decreases the supply chains efficiency, we propose an innovative dynamic MOQ policy and derive the analytical conditions under which channel coordination with Pareto improvement is achieved.

Supply Chain Contracts in Fashion Department Stores: Coordination and Risk Analysis

In the fashion industry, department stores normally trade with suppliers of national brands by markdown contract whilst developing private labels with cooperated designers by profit sharing contract. Motivated by this real industrial practice, we study a single-supplier single-retailer two-echelon fashion supply chain selling a short-life fashion product of either a national brand or a private label. The supplier refers to the national/designer brand owner and the retailer refers to the department store. We investigate the supply chain coordination issue and examine the supply chain agents’ performances under the mentioned two contracts. We find the analytical evidence that there is a similar relative risk performance but different absolute risk performances between the national brand and the private label. This finding provides an important implication in strategic interaction for the risk-averse department stores in product assortment and brand management. Furthermore, we explore the impact of sales effort on the supply chain system and find that the supply chain is able to achieve coordination if and only if the supplier (i.e., the national brand or the private label) is willing to share the cost of the sales effort.

The Impact of the Strategic Advertising on Luxury Fashion Brands with Social Influences

It is well known that purchase of luxury fashion brands is strongly influenced by social needs such as the need for uniqueness and the need of conformity. The existence of these two competing social needs separates customers into two groups who exhibit different buying behaviors. This paper concerns the impacts of such social influences between different consumer groups on pricing and advertising strategies of luxury fashion brands with penalty of insufficient advertising. We start by considering different advertising allocation strategies and derive the corresponding local optimal pricing and advertising allocation policies, through which the global optimal policy that maximizes the company’s profit can be obtained. Important insights on strategic advertising for luxury fashion brands are discussed.

Service Quality of Online Shopping Platforms: A Case-Based Empirical and Analytical Study

Customer service is crucially important for online shopping platforms (OSPs) such as eBay and Taobao. Based on the well-established service quality instruments and the scenario of the specific case on Taobao, this paper focuses on exploring the service quality of an OSP with an aim of revealing customer perceptions of the service quality associated with the provided functions and investigating their impacts on customer loyalty. By an empirical study, this paper finds that the “fulfillment and responsiveness” function is significantly related to the customer loyalty. Further analytical study is conducted to reveal that the optimal service level on the “fulfillment and responsiveness” function for the risk averse OSP uniquely exists. Moreover, the analytical results prove that (i) if the customer loyalty is more positively correlated to the service level, it will lead to a larger optimal service level, and (ii) the optimal service level is independent of the profit target, the source of uncertainty, and the risk preference of the OSP.

Optimizing product service system by franchise fee contracts under information asymmetry

This paper studies the problem of how to effectively provide product service system (PSS) in a service-oriented manufacturing supply chain under asymmetric private demand information. The PSS in the supply chain is operated heterogeneously and complementarily, in which the manufacturer provides the product while the retailer who possesses private demand information is responsible for adding the necessary value-added service on the basic product. We address the issue of how different contracts affect the decisions and profitability of the supply chain members. Three types of contracts are developed to help supply chain partners to make decisions and enhance the supply chain’s efficiency. The first is the franchise fee (FF) contract, under which the manufacturer provides a two-part tariff contract (wholesale price and franchise fee) to influence the retailer’s decision and to detect her private demand information. The second is the franchise fee with service requirement (FFS) contract, under which the manufacturer specifies the service level required in addition to the two-part tariff contract terms. The third is the franchise fee with centralized service requirement (FFCS) contract, which is similar to the FFS contract but that the service level specified by the manufacturer is the system optimal solution. Our analytical results show that all three contracts enable the manufacturer to detect the retailer’s private demand information, with the FFCS contract achieving the greatest channel profit. Finally, numerical examples are presented, and sensitivity analysis of service level and profit are conducted to compare the performance of the three contracts under different settings. The paper provides managerial guidelines for the manufacturer in contract offering under different conditions.

Inventory management research for the fashion industry

Fashion products have a short-life-cycle with highly volatile demand uncertainty. This uncertainty leads to challenges in managing inventory, as matching supply and demand is always difficult in the fashion industry. In this paper, we review the recent literature on fashion industry inventory management. We classify the extant literature by four widely-used research methodologies, including analytical, empirical, case study and simulation approaches. We identify that inventory ownership, information technology, and incentive schemes for increasing inventory efficiency are the key factors to enhance inventory management in the fashion industry. We propose that inventory management of luxury fashion, sustainability in inventory, and empirical and case study approaches are the most important directions for future research.

Quick Response Practices in the Hong Kong Apparel Industry

This chapter presents a study on innovative quick response (QR) practices in the apparel industry in Hong Kong. We conducted desk research, as well as in-depth face-to-face interviews, with six established apparel firms in Hong Kong. The purpose was to gain an understanding of the business environment in which the apparel industry operates, as well as the approaches the firms have taken to increase responsiveness to their customers’ demands. Despite their different business nature and company background, we observed after a detailed examination of the various QR measures employed by these companies that a strong buyer–supplier relationship and frequent information sharing between channel members are crucial to the success of QR adoption.

Mathematical Modeling Research in Fashion and Textiles Supply Chains and Operational Control Systems 2014

1 Institute of Textiles and Clothing, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong 2 Lubar School of Business, University of Wisconsin-Milwaukee, Milwaukee, WI 53201, USA 3 Sun Yat-Sen Business School, Sun Yat-Sen University, Guangzhou 510275, China 4 Institute of Textiles and Clothing, Faculty of Applied Science and Textiles, The Hong Kong Polytechnic University, Hung Hom, Hong Kong