Management Science Review

Researchers studying firm-level productivity have, almost without exception, observed and documented large and persistent productivity differences across businesses. To explain this productivity dispersion, researchers have tried to understand the role of various factors - some internal to the firm (e.g. managerial talent) and some external (e.g. the role of government regulation). In “The Impact of Supply Chains on Firm-Level Productivity.”Serpa and Krishnan (2018) focus on the impact of supply chain factors.

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When dealing with an unreliable supplier, an additional reliable (although possibly more expensive) back-up supplier should always be beneficial for a manufacturer. This seems to be an extra option, which can only help. The paper “Strategic Behavior of Suppliers in the Face of Production Disruptions”, Suleyman Demirel, Roman Kapuscinski, and Man Yu warns that such an extra option changes suppliers’ behavior and may actually hurt the manufacturer.

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The objective of this blog is to reach outside the INFORMS community to the general public so that decision makers in government and industry are exposed to some of the most exciting work published by the journal. The challenge is to translate scientific research to the general public in a way that is meaningful and insightful for that audience.

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Customers (e.g., individuals or businesses) often seek their supplier’s expertise and assistance to make better-informed decisions. For example, investors rely on financial advisors to decide on their investments; patients rely on physicians to decide their treatment plans; consumer goods retailers (e.g., Target, Walmart) rely on suppliers (e.g., P&G, Kraft) to make in-store merchandising decisions such as the management of shelf-space (as in a category captain arrangement) and inventory (as in a VMI agreement). However, in most cases, the interests of the supplier and the customer often can never be fully aligned and it may not be fully possible to verify whether the supplier acted in the customer’s best interests.

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