Inventory Decisions and Signals of Demand Uncertainty to Investors

Lai, Guoming; Xiao, Wenqiang

doi:10.1287/msom.2016.0600

Cited by 44 publications

(26 citation statements)

References 39 publications

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“…Similarly, all papers have given some consideration to financing constraints. Four papers in the special issue explicitly consider the question of the distribution of cash flows from firms to shareholders: Ning and Sobel (2018), Babich (2018), de Véricourt andGromb (2018), and Lai and Xiao (2018).…”

Section: Overarching Themesmentioning

confidence: 99%

“…growing iFORM literature that studies effects of moral hazard and information-based costs on OM decisions (e.g., other papers in this issue such as Xiao 2018 and, and the recent work of Chod and Zhou 2014).…”

mentioning

confidence: 99%

“…The paper "Inventory Decisions and Signals of Demand Uncertainty to Investors" (Lai and Xiao 2018) offers an insightful theoretical model that addresses the question. The main OM features of this paper are order quantity decisions (representing inventory policy), the demand uncertainty, and information about the demand uncertainty.…”

mentioning

confidence: 99%

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Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions

Babich

Kouvelis

2018

M&SOM

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Abstract. Interface of finance, operations, and risk management (iFORM) is a relatively new research area dealing with timely, complex, and boundary-spanning issues in a variety of settings from start-ups to global enterprises. iFORM research addresses ways to better integrate physical, financial, and informational flows by combining the operational choices of the firm with its financial decisions, and merging information flows between the firm and its customers and suppliers with informational flows between the firm and its investors. We report on the main research themes of the recent iFORM research, based on, and going beyond, papers that appeared in the Manufacturing and Service Operations Management iFORM special issue. We highlight the main emerging contributions in the area. Among the most frequently addressed issues in current research include the following: supply chain finance, such as trade credit and buyer-intermediated finance and their effects on supply chain performance; agency problems, such as risk shifting and managerial short-termism and their influence on operational decisions; contracting between the firm and its investors and how it alters contracting with supply chain partners; and supply risk management in the form of dealing with commodity price fluctuations and supplier performance issues. We suggest four promising directions of future iFORM research: supply chain finance, integrated risk management, start-up and entrepreneurial financing, and asset pricing with supply chains.

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Section: Overarching Themesmentioning

confidence: 99%

mentioning

confidence: 99%

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Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions

Babich

Kouvelis

2018

M&SOM

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“…Without the retailer's market concerns, the …rst-order conditions of the …rms'investment decisions in (15) show that a standard hold-up problem arises as each …rm receives only a fraction of the marginal bene…ts from its investments. The …rms thus invest below the e¢ cient level from the perspective of the whole supply chain.…”

Section: The Impact Of Market Concerns On the Whole Supply Chainmentioning

confidence: 99%

“…Corollary 1 (i) shows that the retailer's market concerns can increase the investments of both …rms. The associated …rst-order conditions (15) imply that the …rst-best investments, I , can only be induced if each …rm receives hundred percent of the marginal bene…ts from its investments, i.e., if…”

Section: The Impact Of Market Concerns On the Whole Supply Chainmentioning

confidence: 99%

The Effect of Capital Market Concerns on Specific Investments in the Supply Chain

Chen

Pfeiffer

2019

SSRN Journal

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The …nancial market gives signi…cant consideration to supply chain activities of publiclylisted …rms, who could in turn use their investments in the supply chain to manage market expectations. We study the e¤ects of the capital market concerns of a publiclytraded retailer that collaborates with a privately-owned supplier in a supply chain. The …rms each undertake a relation-speci…c investment and then bargain over the joint surplus generated by the collaboration. The retailer's market concerns make it a more aggressive bargainer, and able to obtain a higher share of the joint surplus. The investments of both …rms increase with the retailer's market concerns when the retailer's investment is su¢ ciently important for the collaboration. In this case, the retailer bene…ts from its market concerns. When the supplier's investment is su¢ ciently important, both …rms invest less and the retailer su¤ers from its market concerns. From the perspective of the whole supply chain, the retailer's market concerns could mitigate or exacerbate the holdup problem between the two …rms and thus could be either bene…cial or detrimental. In the extension, we also discuss the observability of the …rms'investment decisions as well as the case of two symmetric …rms that are both publicly traded.

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Joint pricing and replenishment policies for risk‐averse retailers under duopolistic competition

Zhang

Yue

2021

Manage Decis Econ

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This study investigates the coordination of pricing and inventory replenishment under retail competition. Although conventional wisdom suggests that a retailer follow conservative operating strategies when the competing retailer adopts a markdown strategy, the retailer may actually raise its price (order) if its operational costs are sufficiently high (low) and its competitor's price is relatively low. If the retailer is more risk averse, its pricing and replenishment decisions hinge highly on its risk aversion level and its competitor's current price. The increase of the wholesale price always hurts the retailers and may even hurt the manufacturer if it is exorbitant.

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Inventory Decisions and Signals of Demand Uncertainty to Investors

Cited by 44 publications

References 39 publications

Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions

Introduction to the Special Issue on Research at the Interface of Finance, Operations, and Risk Management (iFORM): Recent Contributions and Future Directions

The Effect of Capital Market Concerns on Specific Investments in the Supply Chain

Joint pricing and replenishment policies for risk‐averse retailers under duopolistic competition

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