M&SOM Review

The biggest step in the history of global climate negotiations was taken in Paris in 2015 when nearly 200 countries agreed to keep global warming below 2 degrees Celsius compared to pre-industrial levels. The landmark climate agreement signals investors and firms that greenhouse gas (GHG) emissions will remain an integral part of the economy in the near future.

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A recent survey by ChannelAdvisor and Retailing Today shows that nearly half of the 347 manufacturers surveyed sell products from their own website, and 59% of them believe that most brands will sell directly to their customers in the future. Direct selling (also known as encroachment) can increase manufacturers’ profits by generating more sales and giving manufacturers a larger share of the margin. If ill managed, however, direct selling can cause substantial damage to supply chain relationships.

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A breakdown in the judiciary is a breakdown in the rule of law. And Italy's judiciary is breaking down. The World Bank ranks Italy 147th out of 189 countries in ease of enforcing contracts: it takes an estimated 3.25 years to enforce a contract in Italy, slightly less than Djibouti (3.35), and slightly more than Myanmar (3.18). The problem is only getting worse; the stock of pending civil cases increased by 10% from 2008 to 2010, and the average Italian civil case duration increased by 19% from 2010 to 2012. The International Monetary Fund (IMF) argues that the inefficiency of Italian courts leads to “reduced investments, slow growth, and a difficult business environment.”

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Recent years have witnessed the emergence of dynamically customized content recommendations. This online service allows media sites to direct users from articles they are currently reading to other Web-based content by providing a list of recommended links. In a world where millions of new articles surface daily, these recommendations are playing an increasingly important role in helping readers to navigate through the ocean of content, while publishers profit from additional readership and increased engagement.

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Planned obsolescence is nothing new: from early nylon stockings in the first half of the twentieth century to cheap photocopier components in the second half, manufacturers have designed products to wear out quickly and induce replacement purchases. This has long been well understood, as consumers do not much care how many of their neighbors own the same inexpensive but functional copier.

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Retail stores periodically have to close their doors for various reasons, from strategic shifts to underperformance and bankruptcy. Gap, for example, recently announced that it would close 175 stores in North America. Staples and Office Depot are shutting down hundreds of stores in anticipation of a potential merger. In early 2015, Target closed its 133 Canadian stores, and Radio Shack liquidated 1,700 stores. The list of retailers that have conducted large-scale store closings goes on and on: Best Buy, Borders, Circuit City, Home Depot, Montgomery Ward, Sears, Walgreens, and Woolworth. In addition, most other retailers close small portions of their stores annually.

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The annual delivery of influenza vaccine to the American public is hardly a straight shot from federal health officials to vaccine manufacturers to physicians to patients. A recurring and vexing part of the process is a supply-chain hitch that can leave patients waiting for flu shots even when the supply of the medicine is abundant.

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Firms with prominent brands (e.g., Apple, Disney, Marks & Spencer, Zara) have recently been exposed as sourcing from suppliers that have caused major harm to workers or the environment. When a firm’s supplier is revealed as abusing workers (e.g., through hazardous working conditions leading to workplace injuries and deaths) or damaging the environment (e.g., through a major, illegal release of toxic chemicals) the ensuing scandal damages the brand of the buying firm.

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Rue La La is in the online fashion sample sales industry, where they offer extremely limited-time discounts (“flash sales”) on designer apparel and accessories. Upon visiting Rue La La’s website (www.ruelala.com), the customer sees several “events,” each representing a collection of for-sale products (“styles”) that are similar in some way.

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In a recently accepted paper in Manufacturing & Service Operations Management, we examine the impact wine tasting experts have when it comes to selling wine before it is bottled. The practice of selling wine prior to its bottling has been long been practiced by French winemakers; it is referred to as the “en primeur” campaign. In the US, it is known as “wine futures.”

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