Robert Windle

Outsourcing of integrated logistics functions: An examination of industry practices

A survey of 372 logistics managers in different industries revealed multiple outsourcing linkages among logistics activities. These results are consistent with previous findings that suggest that firms can improve customer service and reduce costs by outsourcing multiple logistics functions. The results are also consistent with previous research on the role that improved coordination of information and material flows have in the achievement of economies of scale and economies of scope. Future research developments in the field of logistics outsourcing are also proposed.

COMPETITIVE RESPONSES TO LOW COST CARRIER ENTRY

Recent research has found that the entrance of a low cost carrier leads to lower prices on routes it has entered. This paper extends this analysis by examining the impact of route entry by a discount carrier, ValuJet into an established carriers hub, Delta, and by examining price changes on routes not entered by the low cost carrier. We found that Delta lowered its fares on competitive routes terminating in Atlanta and on routes flowing through its Atlanta hub in response to competition by ValuJet. We did not find evidence that Delta increased fares on non-competitive routes (either those terminating in Atlanta or flowing through Atlanta) to compensate for lost revenues on the competitive routes. This final result runs counter to the conjectures of the DOT and supports the argument that firms practice rational economic pricing in their hub-and-spoke networks. ©

Online reputation systems: Design and strategic practices

This paper provides a comprehensive framework for evaluating the effects of feedback systems, and the potential problems with feedback systems, on seller incentives to provide high quality products under the case of asymmetric information. In particular, a baseline auction system without a feedback-based reputation system is first modeled and it is shown that the market for the sale of high quality products may not be sustainable. We then show how the institution of a feedback system can lead to sustainable market outcomes. Next, we demonstrate how three practices - the changing of identifications by dishonest sellers, shilling, and failure to leave feedback - can negate the usefulness of the feedback system in maintaining the market. Finally, we describe some actions that may be taken to overcome these problems. These results highlight the important role market managers play in ameliorating these market failure problems and ensuring the effective functioning of a market.

Partial productivity measures and total factor productivity in the air transport industry : limitations and uses

In recent years the measurement of productivity has increasingly focused on measuring total factor productivity or TFP. Additional research has investigated the reasons for differences in TFP between firms. The implicit assumption behind this work is that simpler measures of industry productivity (such as revenue ton-miles per employee) can seriously misstate both the level and growth rate of productivity. As a result, accurate analysis of productivity requires information on TFP. While this argument is not open to debate on a theoretical basis, the extent that simple measures of productivity inaccurately portray TFP has not been investigated in anything but a cursory manner. This paper investigates the relationship between typical industry measures of productivity and TFP using a data set of U.S. and non-U.S. airlines for the period 1970-1983. The paper examines both levels of productivity and growth rates. The results indicate the extent to which industry measures accurately or inaccurately reflect the more comprehensive measure of productivity (TFP). To the extent that industry measures are inaccurate, this paper investigates the possible sources of error in order to determine if slightly altered industry measures might more accurately reflect TFP.

Impact of global sourcing and exports on US manufacturing inventories

Purpose – The purpose of this paper is to empirically investigate the impact of global sourcing and exports on US domestic manufacturing inventories and quantify the additional inventory costs associated with global operations.Design/methodology/approach – A panel data set of 19 US manufacturing sectors is constructed over the period 2002‐2005. Data are collected from the US economic census and other government statistics. Fixed and random effects models in both linear and LOG terms are estimated and the estimated coefficients used to calculate the cost to US manufacturing industries of additional inventories attributed to global operations.Findings – Imports and exports have a positive, significant impact on raw materials inventory and finished goods inventory, respectively, in terms of days of supply. Based on estimations using 2005 data, a 10 percentage point increase in the import and export ratios for all US manufacturers is estimated to be accompanied by

Revisiting feedback systems: Trust building in digital markets

3.03 billion additional costs for raw materi...

Regional jet services: supply and demand

Data from ebay.com online auctions were used to examine the impact of buyer feedback and other trust-evoking variables on the final auction prices realized by sellers. Direct counts of positive and negative feedback were found to influence ending auction price significantly. However, when difference measures between positive and negative feedback were used as buyer feedback measures, no significant price effects were found. Since much more positive, than negative, feedback is obtained by sellers, the marginal impact of negative feedback is much greater than that of positive feedback. Therefore, subtracting negative feedback counts from positive feedback counts may not be appropriate. Support was also found for other factors, such as product warranties, impacting final auction prices.

Aligning supply chain transportation strategy with industry characteristics

There has been a dramatic growth in regional jet (RJ) operations over the past decade. As of October 2000, major U.S. airlines and their commuter affiliates had deployed almost 500 RJs, defined by the U.S. General Accounting Office (GAO) as jet airplanes with capacities not exceeding 70 seats. The same group of airlines had only 89 RJs in service in 1997. This paper addresses two questions. The first is how RJs are being utilized by the airlines. This question is explored by presenting a case study of Continental Airlines introduction of regional jets at two of its hubs, in Cleveland and Houston. The second question is how the use of RJs impacts passenger demand. The results indicate a significant demand effect for RJs, and suggest strong passenger preferences for RJs over turboprop aircraft.

RESOURCE AVAILABILITY AND NEW ENTRY IN THE US AIRLINE INDUSTRY

Purpose – The purpose of this paper is to propose that transportation modal mix in global supply chains is a result of the strategic alignment between industry characteristics and supply chain strategies. Design/methodology/approach – Using annual US trade statistics and manufacturing industry data for the years 2002-2009 between the USA and its top 12 Asian trading partners, this study applies various regression methods to examine key factors associated with the transport modal decision. Findings – The results show that industry characteristics have an impact on the transportation modal mix in global supply chains. Manufacturing industries use more air freight and less ocean freight when facing positive sales surprises, high-monthly demand variation, a high-contribution margin ratio, a high cost of capital, and increased competition. Practical implications – The findings provide important insights for logistics managers and freight forwarders. While transportation cost remains an important concern, a log...

THE IMPACT OF LOW COST CARRIERS ON AIRPORT AND ROUTE COMPETITION

This paper examines the impact of resource availability, namely labor and flight equipment availability, on entry into the US airline industry. The general thesis is that when labor and/or flight equipment is in scarce supply, the cost of starting and operating a new airline, or the cost of expanding onto new routes, is high. The paper found a positive correlation between new aircraft delivery and new entry onto routes by majors but a negative correlation between new aircraft delivery and entry onto routes by non-majors. The paper also found a negative correlation between major carrier salary levels and entry by majors but a positive correlation between major carrier salary levels and entry by non-majors.