(Press-News.org) RIVERSIDE, Calif. -- Advance supply signals, such as financial health and production viability, contain rich information on supplier conditions. When and how these signals should be used is critical for improving firms' forecast and profitability.
A recent paper, "Dynamic Supply Risk Management with Signal-Based Forecast, Multi-Sourcing, and Discretionary Selling," provides mathematical tools and management principles on this issue.
The authors, Long Gao (from University of California, Riverside School of Business Administration), Nan Yang and Renyu Zhang (both from Washington University in St. Louis), and Ting Luo (from The University of Texas at Dallas), study how firms should use signal-based supply forecast to coordinate the procurement and selling decisions in real time.
They find that the value of signal-based supply forecast depends critically on supply volatility and scarcity. It should be used when supply uncertainty is substantial, supply-demand ratio is moderate, forecast precision is high and supplier heterogeneity is high.
The authors also identify important insights on other risk-mitigation instruments such as multi-sourcing and discretionary selling. For example, multi-sourcing and signal-based forecasts can be strategic complements or substitutes, depending on the supply-demand ratio. Moreover, although discretionary selling exploits demand heterogeneity by satisfying the most lucrative orders only, its value may decrease with more heterogeneous demands.
The paper provides a powerful lens for understanding firms' risk management strategies. For example, following the 2011 earthquake and tsunami in Japan, Toyota mobilized multiple suppliers to make up a shortage of certain parts (such as engine drive belts and mass airflow sensors), restricted the allocation of certain parts and fulfilled only emergency repair orders. As the paper demonstrated, such a holistic strategy is well grounded on the mathematical and management principles the authors developed.
The research has potential implications in a wide range of events - including the ongoing drought in California, the electricity crisis in the early 2000s in California and the strikes earlier this year at the ports of Los Angeles and Long Beach - all of which deal with supply chain disruption issues.
"It should be in the DNA of companies that all relevant elements should be systematically taken into account," Gao said. "When dealing with outside disruptions, companies can't react on an ad hoc basis."
INFORMATION:
Scientists have pinpointed a population of neurons in the brain that influences whether one drink leads to two, which could ultimately lead to a cure for alcoholism and other addictions.
A study, published in the Journal of Neuroscience by researchers at the Texas A&M Health Science Center College of Medicine, finds that alcohol consumption alters the structure and function of neurons in the dorsomedial striatum, a part of the brain known to be important in goal-driven behaviors. The findings could be an important step toward creation of a drug to combat alcoholism. ...
New research indicates that household food insecurity dramatically increases the likelihood of metabolic diseases in children, with many showing chronic disease markers before they graduate from high school. The study published today in the Journal of the American Osteopathic Association.
Food insecurity, defined as lacking access to food for an active, healthy life, is a preventable health threat. Yet, lack of basic access to food affects 14.3 percent of all U.S.
households and 19.5 percent of households with children.
"This is a looming health issue for the nation. ...
Brooklyn, NY - Xian-Cheng Jiang, PhD, professor of cell biology at SUNY Downstate Medical Center, has led a study identifying a new approach for lowering "bad" lipids in blood circulation, a critical means to combat devastating cardiovascular diseases such as atherosclerosis. The research was published in the online edition of Gastroenterology.
The team established that an enzyme called LPCAT3 (Lysophosphatidylcholine acyltransferase 3) is involved in the biosynthesis of phosphatidylcholine (PC), a type of compound lipid that is a major component of cell membranes. ...
Northridge, CA (September 2, 2015) - A study published Monday in the Journal of Health Care for the Poor and Underserved (JHCPU) concludes that ethnicity is associated with nutrient shortfalls of important nutrients. This study compared usual intake for essential nutrients between Non-Hispanic Black and Non-Hispanic White Americans using data from the National Health and Nutrition Examination Survey (NHANES), 2007-2010. This new analysis is consistent with previous research and confirms a continuing diet-related health disparity in the American population.
Nutrient shortfalls ...
LA JOLLA, Calif., September 2, 2015 - A new Sanford Burnham Prebys Medical Discovery Institute (SBP) study takes a step forward in understanding how similar, yet genetically unrelated neurodegenerative diseases, such as Alzheimer's disease, frontal temporal dementia, and progressive supranuclear palsy (PSP) are caused by the protein tau. The findings, published today in Neuron, create new opportunities to target this key protein that leads to the brain lesions found in patients with impaired motor functions and dementia.
"Our research shows how the abundance of a protein ...
Intentional burning in tropical forests has accounted for nearly 20% of all greenhouse-gas emissions since preindustrial times and will have major implications for Earth's climate and biodiversity in years to come. To better understand the complex dynamics surrounding these fires, a team of researchers led by Jennifer K. Balch, of the University of Colorado-Boulder, conducted a six-year controlled burn experiment in an Amazonian rainforest block located in Mato Grasso, Brazil. The results are described in an article that is part of BioScience's just-released Special Section ...
LA JOLLA--When you're taking a walk around the block, your body is mostly on autopilot--you don't have to consciously think about alternating which leg you step with or which muscles it takes to lift a foot and put it back down. That's thanks to a set of cells in your spinal cord that help translate messages between your brain and your motor neurons, which control muscles.
Now, for the first time, researchers have created a method to watch--in real time--the activity of those motor neurons. The new technology, developed by Salk scientists and published in Neuron, is ...
Georgia Institute of Technology researchers have developed a new artificially intelligent system that crowdsources plots for interactive stories, which are popular in video games and let players choose different branching story options.
With potentially limitless crowdsourced plot points, the system could allow for more creative stories and an easier method for interactive narrative generation. Current AI models for games have a limited number of scenarios, no matter what a player chooses. They depend on a dataset already programmed into a model by experts.
Using ...
Tropical Storm Fred is losing its punch. Satellite imagery shows that there are no strong thunderstorms developing in the tropical storm indicating that the storm is weakening.
The RapidScat instrument that flies aboard the International Space Station measured Tropical Storm Fred's winds on September 1 at 4 a.m. EDT. RapidScat saw that the strongest winds tightly circled the center and were on the northern side of the storm, as strong as 24 and 27 meters per second (53.6 mph/ 86.4 kph and 60.4/97.2 kph).
On September 1 at 13:00 UTC (9 a.m. EDT) the MODIS instrument ...
GeoSpace
High water tables can be a boon to crop yields
A high water table - usually a bane to crop yields - can provide much-needed water during drought and to crops planted in coarse-grained soils, found a new study published online in Water Resources Research.
3-D maps illustrate formation of the Hangai Dome in central Mongolia
Scientists used 1.7 million seismic wave measurements from 227 earthquakes across East Asia to create animated 3-D images of subsurface rock formations under the Hangai Dome in central Mongolia as part of their recent study accepted in Geophysical ...
