Research –

Practical relevance and academic insights.

Standard view:

We examine a capital-constrained supply chain in which a small- and medium-sized enterprise (SME) supplier sells to an established retailer via a wholesale price contract. To mitigate the supplier's financial distress, the retailer chooses between two pre-shipment finance instruments: advance payment discount (APD) and buyer-backed purchase order financing (BPOF). When either APD or BPOF can be chosen, the retailer prefers APD to BPOF if her internal asset level is above a certain threshold. When both APD and BPOF are adopted, the retailer prefers APD and does not initiate BPOF unless the marginal cost of financial distress dominates the benefit of unit discount. We show that the financing equilibrium region of APD increases not only with the retailer's internal capital level, but also with demand variability. The interval and magnitude of the competition penalty incentivizes collaboration between supply chain partners.

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Product returns are both a challenge and an opportunity for most retailers, since more than US$640 billion in revenue is lost each year because of preventable product returns. A major impediment to unlocking the full potential of these returns is the firm’s returns management program: the policies governing the customer-firm exchange process. Recent insights from research and practice have yielded the unprecedented opportunity to open the “black box” of developing effective programs. Yet, such development must address three main questions: What types of returns management programs exist? What misunderstandings impede returns management effectiveness? How can retailers develop effective programs? This article distinguishes among different types of returns management programs and discusses the managerial misunderstandings that reduce their effectiveness. It presents a framework for developing, implementing, and controlling effective programs that allow retailers to boost sales, reduce returns, and increase profitability.

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The strategic positioning of online fashion retailers is defined, in part, by how they handle the complex task of managing returns. Although customers demand lenient policies such as free and late returns, tight control of returned items is mandated by the high costs of re-transportation and product value erosion. We model closed-loop fashion supply chains in order to describe, analyze, and optimize the performance of both forward and backward networks, including a secondary market. The model is based on a queueing system that combines the effect of new products entering the network for the first time with returned products entering the network for the second or nth time. We derive a closed-form expression for optimal service rates at both the test and refurbishment facilities and for the optimal return window. We then analyze the economic effects—on supply chain profit—of return rate, multiple looping of the same item in the supply chain, returned items being sold in a secondary market, and controlled delays in the refurbishment cycle. We apply our model to data obtained from a German fashion online retailer and report the managerial insights derived from this approach. Our results indicate how a company can set its return window strategically so as to maximize her profit as well as how it can decide whether to refurbish merchandise or sell it in the secondary market. In addition, we describe how refurbishment activities can sometimes lead to greater benefits even though the secondary market is usually an attractive opportunity for product returns.

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Problem definition: Manufacturing firms are undergoing restructuring defined by a collection of adjustments and decisions, which affect the source and destination of manufactured products throughout the firm’s global supply chain network. We report on a comprehensive picture of manufacturing sourcing on a global basis. Academic/practical relevance: With dynamic changes in global economic, political, and technological conditions, the design of global supply chain strategies has become critically important for executives and has great potential for operations management research. Methodology: Our work is based on a global field study conducted in 2014 and 2015 among leading manufacturers from a wide range of industries. The data set has the distinguishing feature of reflecting actual decisions that the firms made recently (during the last three years). Results: Companies are currently restructuring their global production footprints. The majority of firms engage in offshoring. Reshoring does occur but seldom for corrective reasons. China remains the most attractive site for production sourcing, followed by Eastern Europe and Southern Asia. Manufacturing continues to decline in the developed economies of Japan and Western Europe. We observe that while North America may be at the cusp of a manufacturing renaissance, such a change is not just because of reshoring by domestic firms. Labor cost no longer dominates manufacturing location decisions; rather, firms decide based on complex trade-offs among a variety of factors. Finally, firms localize production in developed economies and use developing economies as production hubs. Managerial implications: Our goal in this paper is to inform both managerial policy decisions and the academic research agenda by developing insights on managerial practices that concern production sourcing and on the factors that drive such decisions. We develop hypotheses concerning how firms make these strategy decisions, and we discuss implications for analytical and empirical research.

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We consider a multinational corporation that employs capacity reshoring, production switching, and financial hedging to manage supply–demand mismatches and currency risk. We optimize mean-conditional value-at-risk (CVaR) by decomposing operations and finance: operational flexibility maximizes expected profit subject to a CVaR constraint, whereas financial hedging minimizes CVaR subject to a minimum expected profit. We report three main findings. First, operational flexibility and financial hedging can be complements: operational flexibility enhances profitability and reduces downside risk, while financial hedging minimizes downside risk and can affect the feasible set of capacity portfolios (albeit indirectly) by relaxing a CVaR constraint. Second, operational flexibility and financial hedging are substitutes in risk reduction (though the latter has greater risk reduction effects in CVaR when used alone). Third, coordinating operations and finance is crucial for minimizing substitution effects. Efficient financial hedging depends on rigorous estimation of cash flow distribution as shaped by operational flexibility, and a capacity portfolio's feasibility relies on financial hedging because of the CVaR constraint.

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We present a comprehensive introduction to judgmental demand forecasting along with a model that allows for effectively debiasing team forecasts and estimating demand distributions. This case is recommended for classes in operations management, marketing, or retail management; two companion papers are ideal for advanced courses (e.g., master’s or doctorate programs). We confront students with a demand forecasting problem encountered by Canyon Bicycles, the German premium bicycle manufacturer and online retailer. We present both a model and a process for deriving an accurate judgmental demand forecast. In particular, we demonstrate how one can (i) identify the best team composition, (ii) prepare for and run the forecasting meeting, (iii) debias team forecasts, (iv) estimate demand distributions, (v) deal with heterogeneous product collections, and (vi) judge the quality of forecasted demand distributions.

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This paper presents a multi-period, multi-objective optimization model that enables robust production network and location planning during times of increased market uncertainty and risk exposure in environmental factors. The planning model focuses primarily on integrating the quantitative and qualitative risk factors associated with strategic production network planning. Integration was realized by linking a robust programming model with aspects of multi-target optimization using an EPSILON-constraint approach. This allows quantitative risks such as fluctuations in demand, exchange rates, and transportation costs to be factored into a common mixed-integer optimization model as discrete scenarios, with qualitative risks, e.g., security risks, accounted for as part of a points-based evaluation approach. The developed model minimizes the firm’s expected downside risk exposure while meeting a pre-selected threshold level for environmental risks. The trade-off between risk and profit is depicted and interpreted using a Pareto analysis. The developed model makes it possible to characterize a variety of risks that are very difficult to manage when carrying out strategic planning of production networks in practice.

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During the last decades, attention to the environment has grown substantially. A remarkable and significant trend has been the recognition of the strategic importance of reverse logistics and closed-loop supply chain (CLSC) as a consequence of the Directive on Waste of Electrical and Electronic Equipment. In this paper, we analyse the transformation from an ‘open-loop supply chain’ to a ‘closed-loop supply chain’. Our aim is to guide the reader through the main aspects of both theory and practice in CLSCs: starting from the existing literature, we adopt a broader approach and define the guidelines for managers to follow in the supply chain decision process. Assuming a producer responsibility perspective, we pay a special attention to some of the most important sustainable strategic decisions that a company has to face in order to implement and effectively manage the CLSC: (i) location–allocation, (ii) returns collection, (iii) inventory control of returns, (iv) returns grading and (v) performance management of CLSC. We describe each typology of problems, their mathematical formulations and the implications through both an environment and business perspective. We highlight the managerial implication and then underline the limits of the current literature, and define future directions for research to explore.

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We develop a new model for the correct accounting of customs duties levied on a product. We examine inward and outward processing – that is, processed components can be either imported or produced in a foreign country – in the strategic planning of a global production network. This complex modeling problem is structured with path variables, and the duty drawbacks can be simultaneously and correctly entered for n production stages in m market regions (with corresponding duty regions) for all products with a maximum n-level bill of materials. We present a case study from the automotive industry to examine whether or not the possibility of future duty rate changes or free trade agreements, such as one between the United States and the European Union, could affect the design of a production network and hence should be considered in strategic planning. We show that correctly accounting for duty drawbacks can lead to changes in the global footprint of production. We also demonstrate that intercontinental trade barriers (in the form of duties) diminish working capital and entail longer delivery routes. Eliminating these political trade barriers could increase the returns to capital while reducing both delivery lead times and environmental costs.

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Demand forecast errors threaten the profitability of high–low price promotion strategies. This article shows how to match demand and supply effectively by means of two‐segment demand forecasting and supply contracts. We find that demand depends on the path of past retail prices, which leads to only a limited number of reachable demand states. However, forecast errors cannot be entirely eliminated because competitive promotions entail some degree of random (i.e., last‐minute) pricing. A hedging approach can be deployed to distribute demand risk efficiently over multiple promotional campaigns and within the supply chain. A retailer that employs a portfolio of forward, option, and spot contracts can avoid both stockouts and excess inventories while achieving the first‐best solution and Pareto improvements. We provide an improved forecasting method as well as stochastic programs to solve for optimal production and purchasing policies such that the right amount of inventory is available at the right time. By connecting a stockpiling model of demand with the supply side, we derive insights on optimal risk management strategies for both manufacturers and retailers in a market environment characterized by frequent price promotions and multiple discount levels. We employ a data set of the German retail market for a key generator of store traffic—namely, diapers.

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Operations management aims to match the supply with demand of material flows, whereas corporate finance seeks to match the supply with demand of monetary flows. These two supply–demand matching processes are connected by real investment and revenue management in a “closed-loop” of resources. We propose a risk management framework for multidimensional integration of operations–finance interface models. Ten aspects are examined to specify conditions under which firms should integrate operations and finance. We present categorizations of operational hedging and financial flexibility. By linking relationship analysis (complements or substitutes) and approach choice (centralization or decentralization) of integrated risk management, we find that: (i) Zero interaction effects between operations and finance lead to decentralization. (ii) Operations and finance should be centralized even if they are partial substitutes.

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When facing supply uncertainty caused by exogenous factors such as adverse weather conditions, firms diversify their supply sources following the wisdom of “not holding all eggs in one basket.” We study a firm that decides on investment and production levels of two unreliable but substitutable resources. Applying real options thinking, production decisions account for actual supply capabilities, whereas investment decisions are made in advance. To model triangular supply and demand correlations, we adapt the concepts of random capacity and stochastic proportional yield while using concordant ordered random variables. Optimal profit decreases monotonically in supply correlation and increases monotonically in supply–demand correlation. Optimal resource selection, however, depends on the trivariate interplay of supply and demand and responds non‐monotonically to changing correlations. Moreover, supply hedges (i.e., excess capacity at alternative sources) can be optimal even if supply resources are perfectly positively correlated. To accommodate changing degrees of correlation, the firm adjusts the lower margin capacities under random capacity; but under stochastic proportional production capability, it uses either low‐ or high‐margin capacities to create tailored “scale hedges” (i.e., excess capacity at one source which can partially substitute for diversification).

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Within the sustainability arena, CO2 reduction has emerged as a key challenge for manufacturers in the fast‐moving consumer goods industry. This goal needs to be balanced against the competitive priorities of cost and responsiveness. Emissions‐reducing efforts are driven by the need to comply with expectations from industry and end customers and by opportunities for energy and cost savings. Manufacturers are now looking beyond their corporate boundaries to find new ways to reduce emissions along the supply chain. There is a need for research to address supplier selection in the face of sustainability challenges and provide insights about the factors affecting the transfer of sustainability skills between the manufacturer and its suppliers. This multiple case study investigates the factors that influence an organization's readiness to engage in a collaborative CO2 reduction management (CCRM) approach. We find that partner selection for CCRM exhibits path dependency in terms of the manufacturer's maturity level of sustainability; characteristics of key downstream customers, in turn, are shown to also impact this selection.

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This paper addresses the issue of identifying and assessing risk relevant to production networks. The objective is to create a systematic, comprehensive record of the risks relevant to the planning of car manufacturer’s production networks and to analyze these risks. The paper also discusses the methodology for assessing relevant risk in terms of the probability that the risk will materialize and the scale of the potential loss. A further objective is to assess the options for mitigating the risk through the use of a flexibly structured production network and to evaluate the associated options for responding to a change in market conditions. A case study demonstrates the possible impact of the main risk factors on performance if the organization concerned does not build flexibility into the network.

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In today's world economy, which is marked by intensified international trade, air cargo acts as a key facilitator. However, cargo airlines continue to struggle to be profitable because of very high asset costs and substantial demand uncertainty. To improve upon this situation, we propose an options contract. Our model captures the main features of cargo trade between an airline and a freight forwarder and allows us to derive an optimal reservation policy. We then go on to analyze the impact of overbooking on the profit of the cargo capacity provider. The model is subsequently applied to real‐life booking data provided by a major cargo carrier. This enables us to compare current contractual arrangements with the ones proven optimal in the model. A numerical study provides insights about the impact of overbooking on contract parameters and profitability. Managerial insights to be drawn conclude this study.

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This article analyzes dual sourcing decisions under stochastically dependent supply and demand uncertainty. A manufacturer faces the trade‐off between investing in unreliable but high‐margin offshore supply and in reliable but low‐margin local supply, where the latter allows for production that is responsively contingent on the actual demand and offshore supply conditions. Cost thresholds for both types of supply determine the optimal resource allocation: single offshore sourcing, single responsive sourcing, or dual sourcing. Relying on the concept of concordance orders, we study the effects of correlation between supply and demand uncertainty. Adding offshore supply to the sourcing portfolio becomes more favorable under positive correlation, since offshore supply is likely to satisfy demand when needed. Selecting responsive capacity under correlated supply and demand uncertainty is not as straightforward, yet we establish the managerially relevant conditions under which responsive capacity either gains or loses in importance. Our key results are extended to the broad class of endogenous supply uncertainty developed by Dada et al. [Manufact Serv Operat Mange 9 (2007), 9–32].© 2012 Wiley Periodicals, Inc. Naval Research Logistics, 2012

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Investment is a central theme in economics, finance, and operational research. Traditionally, the focus of analysis has been either on assessing the value of flexibility (investment under uncertainty) or on describing commitment effects in competitive settings (industrial organization). Research contributions addressing the intersection of investment under uncertainty and industrial organization have become numerous in recent years. In this paper, we provide an overview aimed at categorizing and relating these research streams. We highlight managerial insights concerning the nature of competitive advantage (first- versus second-mover advantage), the manner in which information is revealed, firm heterogeneity, capital increment size, and the number of competing firms.

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Firms that source from offshore plants frequently perceive the lack of reliability and flexibility to be among the major drawbacks of their strategy. To mitigate against imminent mismatches of uncertain supply and demand, establishing capacity hedges in the form of responsive backup suppliers is a way out that many firms follow. This article analyzes how firms should contract with backup suppliers, inducing the latter to install responsive capacity. We show that supply options are appropriate to achieve sourcing channel coordination under forced compliance, whereas any firm commitment contract imposes a deadweight loss on the system. Whereas price-only contracts are unable to coordinate the sourcing channel under voluntary compliance, utilization-dependent price-only contracts are. Under the former contract, a price-focused strategy on the part of the manufacturer turns out to diminish the system’s service level and possibly has negative implications on installed backup capacity, and not least on the manufacturer’s profit.

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We introduce Dynamic Multilevel Modeling (DMLM) to a multicatalog-brand environment to determine the optimal frequency, size, and customer segmentation of direct marketing activities. This optimization method leverages multicatalog-brand effects including the utilization of prior customer ordering behavior, maximization of customer value and customer share, and economies of scale and scope in printing and mailing. This enhancement of the original DMLM-approach is called Dynamic Multidimensional Marketing (DMDM). With DMLM alone, Rhenania, a German direct mail order company, turned its catalog mailing practices around and consequently rose from the number 5 to the number 2 market position. The DMLM approach was so effective that two major competitors could be bought out. Improvements provided by DMDM were threefold: more efficient resource allocation across all catalog brands, more accurate customer microsegmentation, and more effective reactivation. Presently, the company's target is to transform single-brand customer relationships into two- or three-brand relationships with higher revenue per customer. As a consequence, the Rhenania group's performance was decoupled from the overall market trend.

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Rhenania, a German direct mail-order company, turned its catalog mailing practices around within one year and consequently moved up in market position from number 5 to number 2. A dynamic multilevel modeling (DMLM) approach uses elasticities to determine the optimal frequency of catalog mailings, a customer-segmentation approach allows for optimization of mailings, and a recency, frequency, monetary-value (RFM) segmentation in combination with a chi-square automatic interaction detection (CHAID) algorithm determines when customers should receive a reactivation package—as opposed to a catalog—to optimize mailing efficiency further. The DMLM approach was so effective that Rhenania acquired two competitors (one a subdivision of Springer Verlag).

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Coordination among many interdependent actors is key activity in complex product development projects. The challenge is made more difficult in concurrent engineering processes, as more activities happen in parallel and interact. This coordination becomes progressively more difficult with project size. We do not yet sufficiently understand whether this effect can be controlled with frequent and rich communication among project members, or whether it is inevitable. Recent work in complexity theory suggests that a project might form a “rugged landscape”, for which performance deterioration with system size is inevitable.

This article builds a mathematical model of a complex concurrent design project. The model explicitly represents local component decisions, as well as component interactions in determining system performance. The model shows, first, how a rugged performance landscape arises from simple components with single-peaked performance functions, if the components are interdependent.

Second, we characterize the dynamic behavior of the system analytically and with simulations. We show under which circumstances it exhibits performance oscillations or divergence to design solutions with low performance. Third, we derive classes of managerial actions available to improve performance dynamics, such as limiting the “effective” system size of fully interdependent components, modularity, and cooperation among designers. We also show how “satisficing”, or a willingness to forego the last few percent of optimization at the component level, may yield a disproportionally large improvement in the design completion time.

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Coordination among many interdependent actors in complex product development projects is recognized as a key activity in organizational theory. It is well known that this coordination becomes progressively more difficult with project size, but we do not yet sufficiently understand whether this effect can be controlled with frequent and rich communication among project members, or whether it is inevitable. Recent work in complexity theory suggests that a project might form a “rugged landscape,” for which performance deterioration with system size is inevitable.

This paper builds a mathematical model of a complex design project that is divided into components (subproblems) and integrated back to the system. The model explicitly represents local component decisions, as well as component interactions in determining system performance. The model shows, first, how a rugged performance landscape arises even from simple components with simple performance functions, if the components are interdependent.

Second, we characterize the dynamic behavior of the system analytically and with simulations. We show under which circumstances it exhibits performance oscillations or divergence to design solutions with low performance. Third, we derive classes of managerial actions available to improve performance dynamics, such as modularization, immediate communication, and exchanging preliminary information. Some of these have not yet received adequate attention in literature and practice.

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Increasing product variety through the use of alternate package sizes is a commonly observed mechanism in the grocery industry. Under such a scheme, however, the response to pricing decisions for each of the different package sizes is affected by how customers make demand choices. We build a demand model in which customers react smart to retail promotions through stockpiling and package size switching. The demand model combines a customer choice model with a model in which customers differ in their stockpiling and reservation price levels. We utilize data from the German grocery industry for an empirical fitting of the model. We then develop a store-level inventory model for each SKU and optimize price promotions to maximize expected profit. We show the benefit of capturing the smart customer response to price promotions by demonstrating its impact on the reduced inventory costs. We use the model to generate a number of managerial implications of the model for the German grocery environment.

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Managerial flexibility has value in the context of uncertain R…D projects, as management can repeatedly gather information about uncertain project and market characteristics and, based on this information, change its course of action. This value is now well accepted and referred to as “real option value.” We introduce, in addition to the familiar real option of abandonment, the option of corrective action that management can take during the project. The intuition from options pricing theory is that higher uncertainty in project payoffs increases the real option value of managerial decision flexibility. However, R…D managers face uncertainty not only in payoffs, but also from many other sources. We identify five example types of R…D uncertainty, in market payoffs, project budgets, product performance, market requirements, and project schedules. How do they influence the value from managerial flexibility? We find that if uncertainty is resolved or costs/revenues occur after all decisions have been made, more variability may “smear out” contingencies and thus reduce the value of flexibility. In addition, variability may reduce the probability of flexibility ever being exercised, which also reduces its value. This result runs counter to established option pricing theory intuition and contributes to a better risk management in R…D projects. Our model builds intuition for R…D managers as to when it is and when it is not worthwhile to delay commitments—for example, by postponing a design freeze, thus maintaining flexibility in R…D projects.

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In this paper, we develop a stochastic dynamic programming formulation for the valuation of global manufacturing strategy options with switching costs. Overall, we adopt a hierarchical approach. First, exchange rates are modeled as stochastic diffusion processes that exhibit intercountry correlation. Second, the firm's global manufacturing strategy determines options for alternative product designs as well as supply chain network designs. Product options introduce international supply flexibility. Supply chain network options determine the firm's manufacturing flexibility through production capacity and supply chain network linkages. Third, switching costs determine the cost of operational hedging, i.e., the costs associated with reducing downside risks. Overall, the firm maximizes its expected, discounted, global, after-tax value through the exercise of product and supply chain network options and/or through exploitation of operational flexibility contingent on exchange rate realizations. In this environment, the firm must trade off fixed operating costs, switching costs, and the economic benefits derived from exploiting differentials in factor costs and corporate tax rates. A multinomial approximation of correlated exchange rate processes is proposed that leads to a consistent and tractable lattice model for this compound option valuation problem. We then demonstrate how the global manufacturing strategy planning model framework can be utilized to analyze financial and operational hedging strategies.

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On October 23, Tobias Mönch (The Wharton School, University of Pennsylvania, USA) and Arnd Huchzermeier (WHU - Otto Beisheim School of Management) presented the talk “Variable Tact Times for Mixed-model Assembly with Random Customization” at the 2019 INFORMS Annual Meeting in Seattle, Washington, USA. 

Abstract: In case of a fixed tact system, raising the number of products to be assembled on a single line results in increased idle time as well as utility work and often requires an expansion of the line. To the contrary, a variable tact time approach is able to eliminate such line inefficiencies altogether, and diminishes the computational effort associated with line balancing and sequencing. We present a benchmark study of a global manufacturer of agricultural machinery where models differ greatly in assembly times and each product is uniquely customized.

On October 22nd, Bernhard von Mutius and Arnd Huchzermeier (both WHU - Otto Beisheim School of Management) presented the talk “Maximizing the Potential of Targeted Marketing: A General Framework for Customized Category Promotions in Retail” at the 2019 INFORMS Annual Meeting in Seattle, Washington, USA. 
 
Abstract: We develop the first general framework for category selection in targeted marketing based on segmenting customers in terms of churn, frequency, and loyalty. For the latter attribute, we propose a novel data-mining methodology that can distinguish between customers who shop at several retailers versus mostly at a single retailer. Using our framework, marketing managers can identify customers to target with category-specific promotions and with what objective function to target them. Our analysis reveals that the personalized targeting strategy exploits the full potential of customized marketing by optimizing the trade-off between CLV considerations and short-term campaign profitability.

On October 22nd, Ole Frauen (Volkswagen AG, Germany), Arnd Huchzermeier (WHU - Otto Beisheim School of Management) and Jürgen Mihm (INSEAD, France) presented the talk “Outsourcing and Offshoring in Complex Product Development Projects” at the 2019 INFORMS Annual Meeting in Seattle, Washington, USA.

Abstract: Should a company outsource or offshore development? Globally operating organizations that develop complex products are faced with the question of how to efficiently decompose and allocate product development work across geographic, or organizational boundaries. The decisions must clearly depend on characteristics of the product (such as its architecture or its innovativeness). Based on an extensive data set involving all development projects of one of the largest car manufacturers worldwide, we study how different product characteristics affect the relationship between outsourcing and offshoring and product quality in complex product development.

On May 5th, 2019, Thilo Scholz presented in the Operational Excellence track at the POMS Conference in Washington D.C. a talk on Antecedents of Supportive Behavior Towards Bottom-up Operations Strategy Formation (joint work with Prof. Dr. Arnd Huchzermeier and Torsten Kühlmann).

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Bernhard von Mutius presented a plenary talk on “Maximizing the Potential of Targeted Marketing: A General Framework for Customized Category Promotions in Retail” (joint work with Prof. Dr. Arnd Huchzermeier) at the 4th European Working Group Meeting on Retail Operations.

The conference is organized by Professor Victor Martinez de Albeniz from IESE Business School, Barcelona, Spain.

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Abstract: Large organizations that develop complex products are faced with the question of how to allocate and decompose product development work across geographic, legal or organizational boundaries. It offers immense potential to flexibility, innovative capability, as well as time and cost savings. Nonetheless, the implementation continues being a challenge to many companies in practice. Based on an extensive data collection of one of the biggest car manufacturer worldwide, we examine the performance of offshoring, outsourcing and the network effects in product development.

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Abstract: Introduction of new models on an assembly line pools demand risk, but also increases costs of idle time, utility work and space. By opening up station boundaries and introducing variable rate, launching instead of a fixed tact time reduces all costs simultaneously. Moreover, the overall line length is reduced significantly.

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Abstract: Maintaining strong customer relationships is a top priority for retailers. We develop a framework for proactive retention management based on data from a German hypermarket chain. We propose a novel definition of partial defection in noncontractual settings, demonstrate how to forecast the likelihood of defection of individual customers, and formulate a retention campaign optimization model.

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Professor Dr. Arnd Huchzermeier chaired the session on Consumer Management. Daniel Ringbeck presented the working paper on “Proactive Retention Management in Retailing: Identifying, Predicting, and Preventing Partial Defection” (joint work with Professor Dr. Arnd Huchzermeier and Dmitry Smirnov).

The program of the event is available for download.

Abstract:
We extend the shelf-space allocation problem by including stockout-based substitution and use a competitive interaction framework to account for (cross-)space-elasticities. The proposed variable neighborhood search allows to incorporate merchandising constraints and solve the problem close to optimality. We test the solution at a pilot store of a German grocery retailer. 

Abstract:
We extend the shelf-space allocation problem by including stockout-based substitution and use a competitive interaction framework to account for (cross-)space-elasticities. The proposed variable neighborhood search allows to incorporate merchandising constraints and solve the problem close to optimality. We test the solution at a pilot store of a German grocery retailer.    

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The case study presents the logistical and organizational challenges in the German beer retail market. It provides an overview of the market environment presents processes in the beer supply chain as well as describes governmental regulations regarding sustainable packaging solutions. In particular, it presents how a novel tray system for beer bottles introduced by Dutch IFCO Systems was tested together with the Hessenring branch of German retail chain EDEKA and a major German beer brewing group. This system promises significant advantages concerning handling, transportation and display of beer six packs in both the supply chain for filled bottles as well as returns of empty bottles. Within this setting the case study sheds light on different aspects of retail operations and supply chain management: Sustainable packaging, closed-loop supply chains, supply chain collaboration and green supply chain metrics. These topics touch different areas of management tasks, both strategic and tactical as well as requiring qualitative and numerical analysis.

(Reprints: The Case Centre, Ref.-No.: 611-005-1)

The case provides an introduction to the current topic of real options analysis for business students. It enables students to simulate relevant management decisions within the context of the volatile Chinese logistics market environment. Also, the case provides students with an overview of the contract logistics market in general. The story is centred on the General Manager of Contract Logistics of Kuehne + Nagel in China, Christopher Steffens, who has to decide on various ways to expand warehouse capacity. Within the case, a thorough analysis of the market environment and the inherent business risks has to be performed, to properly evaluate the various capacity expansion options available. The required analysis could be conducted according to the three suggested assignments, which are split up in consecutive steps and build upon each other. To solve the case, in a first step the market characteristics of the Chinese logistics market have to be identified. Subsequently, the resulting risks for the company''s operations in China need to be examined and potential real options discussed. Finally, the students should, based on quantitative data, valuate a capacity expansion option for the warehouse. In this context, a simulation tool (for example Crystal Ball) should be applied, building a model based on reasonable assumptions that can be derived from information delivered in the case study. The overall design of the case study makes it suitable for students in their senior Bachelor year as well as for MBA programmes and other graduate courses dealing with real option analysis or logistics. To solve the case a general understanding of real options is advantageous.

(Reprints: The Case Centre, Ref.-No.: 608-023-1)

Climate protection and sustainability have evolved into one of the most controversial issues in the first world countries all over the globe. Apart from the commitment of politicians and international organisations, consumers now jump on the bandwagon of ''sustainable products''. Taking up this background, the main focus of the case lies on the choice of the optimal global sustainability strategy for companies through appropriate customer communication by using labels. Advanced labelling, such as carbon footprint, is an approach that aims to enable companies to first analyse and then optimise their footprint in accordance to their strategy. The analysis of the case provides past experience and first trials of labelling in Germany. The case demonstrates two pilot projects with the companies OTTO and OBI, which followed a guiding system with respect to sustainability for a trial period of three months. With this information the students are asked to develop a more complex idea of the sustainable strategy and labelling by themselves and to relate their insights to possible future development and trends. Therefore, the students first have to investigate the existing labels to reveal where there is room for improvement and potential for applying these labels. Based on this, they are asked to evaluate the different labels and find an appropriate approach for the industry of clear and stringent communication. Finally, the students should develop an approach towards a consistent labelling and sustainability strategy that can be applied in the industry with high commitment by the producers and retailers. The case is adequate for MBA and executive education programmes with focus on strategic footprint and operations management.

(Reprints: The Case Centre, Ref.-No.: 608-024-1)

This case presents, for the example of Lufthansa Cargo AG, the status quo of yield management in the air cargo industry. It provides insights into the general structure and provides an overview of the competitive forces in the air cargo business. In particular, it presents Lufthansa Cargo AG as the market leader of the world air cargo market and describes its products and strategic view of the industry. It also shows how the company manages capacity utilisation by allocating space for high-margin express products, standard rate bookings, and long-term contracts. It focuses on the types, terms, and pricing of contracts offered and illustrates how the industry's thinking is moving more and more to a paradigm of flexible contract forms and dynamic pricing.

(Reprints: The Case Centre, Ref.-No.: 602-029-1)

The case describes the evolution of the startup company CargoLifter from the concept, to secured funding and the beginning of large scale technical development. The company has proven the concept of a new logistics market, the transport of very heavy and oversized cargo with a newly developed airship. The case describes how the original business idea drove technical development, funding, and organisational design. Teaching objectives include: (1) understanding the hurdles that a startup must muster, financing and due diligence, attracting partners, managing market and technology uncertainty and building a new organisation; and (2) understanding how a business is driven from the market side.

(Reprints: The Case Centre, Ref.-No.: 300-002-1)

Landskron Brauerei Goerlitz (LKB), a German brewery located on the Polish border, has just been re-privatised in 1992. The radical events which unfolded in the autumn of 1989 in Germany have taken everyone by surprise. The market for LKB has changed dramatically from a centrally planned economy where the brewery possessed almost a monopoly in its region, to a market based economy which; (1) were ''invaded'' by the ''new'' Western-German brewing competitors; (2) called for a new business treatment of the new distribution clients; (3) bred a more demanding consumer; and (4) last but not least, had to deal with the ''imported'' West-German laws and regulations. Landskron had to adapt to this new situation. The most necessary and urgent investment in the production process were made, a new pricing structure implemented, and a first large reduction in employment had been achieved. Many choices and risks, however, remain. The case provides an opportunity to assess a company in a transformation process of change management.

(Reprints: The Case Centre, Ref.-No.: 699-012-1)

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How do I build a blockchain? How do I mint a cryptocurrency? How do I write a smart contract? How do I launch an initial coin offering (ICO)? These are some of questions this book answers. Starting by outlining the beginnings and development of early cryptocurrencies, it provides the conceptual foundations required to engineer secure software that interacts with both public and private ledgers. The topics covered include consensus algorithms, mining and decentralization, and many more.

“This is a one-of-a-kind book on Blockchain technology.  The authors achieved the perfect balance between the breadth of topics and the depth of technical discussion.  But the real gem is the set of carefully curated hands-on exercises that guide the reader through the process of building a Blockchain right from Chapter 1.”  Volodymyr Babich, Professor of Operations and Information Management, McDonough School of Business, Georgetown University.

"An excellent introduction of DLT technology for a non-technical audience. The book is replete with examples and exercises, which greatly facilitate the learning of the underlying processes of blockchain technology for all, from students to entrepreneurs.”  Serguei Netessine, Dhirubhai Ambani Professor of Innovation and Entrepreneurship, The Wharton School, University of Pennsylvania.

"Whether you want to start from scratch or deepen your blockchain knowledge about the latest developments, this book is an essential reference. Through clear explanations and practical code examples, the authors take you on a progressive journey to discover the technology foundations and build your own blockchain. From an operations perspective, you can learn the principles behind the distributed ledger technology relevant for transitioning towards blockchain-enabled supply chains. Reading this book, you'll get inspired, be able to assess the applicability of blockchain to supply chain operations, and learn from best practices recognized in real-world examples."  Ralf W. Seifert, Professor of Technology and Operations Management at EPFL and Professor of Operations Management at IMD.

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This textbook presents a coherent and robust structure for integrated risk management in the context of operations and finance. It explains how the operations-finance interface jointly optimizes material and financial flows under intricate risk exposures. The book covers financial flexibility, operational hedging, enterprise risk management (ERM), supply chain risk management (SCRM), integrated risk management (IRM), supply chain finance (SCF), and financial management of supply chain strategies. Both qualitative and quantitative approaches – including conceptualization, theory building, analytical modeling, and empirical research – are used to assess the value creation by integrating operations and finance.

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What does excellent manufacturing management mean? Management texts to date have emphasized that it is, above methods such as SPC or TQM, a matter of "intangibles" and "culture". This book takes the myth out of management excellence; it can be learned and practiced: 1. Manage the four core processes, strategy formulation and deployment, product innovation, process development, and the supply chain, and 2. Pay attention to the seven dimensions of management quality, direction setting, integration, delegation, communication, participation, measurement, and employee development. Thus, we argue that an excellent manufacturing manager can move to a plant in a different industry and become, after an appropriate time to learn its specific technologies, an excellent manufacturing manager there as well. This book explains management quality and demonstrates how it is implemented, with nine plant tours through world-class factories from different industries.

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This book showcases examples of excellent manufacturing companies who have succeeded in creating value and job growth in Western Europe. The examples show managers of industrial firms how a clearly articulated strategic position can be combined with excellent execution to achieve competitiveness in Europe, in spite of the usually cited disadvantage of high labor costs and rigidity. Not every company is alike — strategic positions differ, and the means of execution differ, but what is common is a clear plan together with mobilization of all employees to apply their abilities in supporting this common plan. The book is indispensable reading for all managers that are interested in improving competitiveness.

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  • Describes case studies of successful industrial companies in Western Europe
  • Shows how a clear strategy and the development of employees can lead to top performance in the global market

This book describes case studies of excellent industrial companies that are growing on the world market and creating jobs in Western Europe. The examples show in detail how management methods enable these companies to clearly define their strategy and to implement it effectively within the organization, thus creating a competitive position within Europe despite high labor costs and regulatory barriers. What these successful companies have in common is that they promote their employees and use defined methods to unite them behind a clear strategy.

In addition to the concrete case studies that can serve as a guide for improvement programs, this book also provides an orientation on strategic "offshoring" (the relocation of activities abroad) and shows managers how the company can and should contribute positively to the social environment. This book is indispensable reading for all managers who have a keen interest in improving their competitiveness.

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Chair awards

International acknowledgement –
Recognition of the quality of our research.

  • Winner of the Practice Prize of Industry 2017 (“Hochschulpreis der Wirtschaft”) of the Koblenz Chamber of Commerce (IHK Koblenz) for the dissertation ‘Judgmental Demand Forecasting in Direct Sales’; IHK Koblenz, Koblenz, Germany, March 28, 2017 (Prof. Dr. Arnd Huchzermeier and Dr. Christoph Diermann; Prize: 2,400 €)
  • Winner of the Science Award 2013 of the European Retail Institute and GS1 Germany for research on ‘Collaborative Promotion Forecasting’; Congress Center Dusseldorf, Dusseldorf, Germany, February 26, 2013 (Prize: 20,000 €)
  • Winner of the European Case Clearing House (ECCH) Award 2009 in the Category ‚Production and Operations Management‘ for the Case Study ‚Lufthansa Cargo: Capacity Reservation and Dynamic Pricing‘, London, United Kingdom, September 25, 2009 (Prof. Dr. Arnd Huchzermeier and Dr. Rolf Hellermann)
  • Winner of the Management Science Strategic Innovation Prize 2003 sponsored by SAP AG, Best Research Paper Competition, European Association of Operations Research Societies (EURO), EURO / INFORMS Joint International Meeting, Istanbul, Turkey, July 9, 2003 (Prof. Dr. Arnd Huchzermeier and Prof. Dr. Stefan Spinler; Prize: 12,000 €)
  • Winner of the Inaugural ISMS Practice Prize 2003, Best Practice Paper Competition, INFORMS Society for Marketing Science, 25th Marketing Science Conference, University of Maryland, College Park, Maryland, USA, June 13, 2003 (Prof. Dr. Arnd Huchzermeier, Prof. Dr. Ralf Elsner and Prof. Dr. Manfred Krafft; Prize: 1,000 USD)
  • Finalist / 2nd place of the Franz Edelman Award 2002, Best Practice Paper Competition, Institute for Operations Research and Management Science (INFORMS), INFORMS Annual Meeting, Montreal, Canada, May, 2002 (Prof. Dr. Arnd Huchzermeier, Prof. Dr. Ralf Elsner and Prof. Dr. Manfred Krafft; Prize: 1,000 USD)
  • Winner of the Mercurius Award 2000, Best Paper Competition, Belgian Federation of Distribution Enterprises (FEDIS), BBL Marnix, Brussels, Belgium, September, 2000 (Prof. Dr. Arnd Huchzermeier and Professor Ludo Van der Heyden, INSEAD, France)
  • AGCO Scholarship for study at The Wharton School, Philadelphia, USA, December, 2019 (Dr. Tobias Mönch; Scholarship 5,000 €)
  • Winner of the Horst Wildemann Prize 2016 (1st Prize granted to first author) of the Commission of Production Management, German Academic Association for Business Research, for the paper ‘Transparency of Risk for Global and Complex Network Decisions in the Automotive Industry’ (joint work with Prof. Dr. Arnd Huchzermeier), University of Hamburg, Hamburg, Germany, October 14, 2016 (Dr. Marius Häntsch; Prize 1,000 €)
  • Winner of the GOR Dissertation Award sponsored by SAP AG for the dissertation ‘Portfolios of Real Options’, Best Dissertation Competition, Annual Meeting of the German Operations Research Society, University of Augsburg, Augsburg, Germany, September 3, 2008 (Dr. Rainer Brosch; Prize: 2,000 €)
  • Winner of GOR Dissertation Award sponsored by SAP AG for the dissertation ‘Capacity Reservation for Capital-Intensive Technologies: An Options Approach’, Best Dissertation Competition, Annual Meeting of the German Operations Research Society, University of Heidelberg, Heidelberg, Germany, September 5, 2003 (Prof. Dr. Stefan Spinler; Prize: 2,000 €)
  • Finalist / 2nd place of the Stinnes Logistics Award 2003, Best Dissertation Competition, Stinnes AG, Muelheim an der Ruhr, Germany, July 9, 2003 (Prof. Dr. Stefan Spinler)
  • Finalist of the Nicholson Student Paper Award 2002, Best Research Paper Competition, Institute for Operations Research and Management Science (INFORMS), INFORMS Annual Meeting, San Jose, California, USA, November, 2002 (Prof. Dr. Stefan Spinler)
  • Winner of the Alfred-Geradi-Gedächtnis-Preis 2002, Best Dissertation Competition, Direktmarketingverband (DMV), Direktmarketing Kongress, Duesseldorf, Germany, September, 2002 (Prof. Dr. Ralf Elsner; Prize: 10,000 €)
  • Finalist of the Nicholson Student Paper Award 2001, Best Research Paper Competition, Institute for Operations Research and Management Science (INFORMS), INFORMS Annual Meeting, Miami, Florida, USA, November 2001 (Prof. Dr. Stefan Spinler)
  • Winner of the Koblenzer Hochschulpreis 2001, Best Master Thesis Competition, Förderkreis Wirtschaft und Wissenschaft in der Hochschulregion Koblenz e.V., City Hall, Koblenz, Germany, November 2001 (Dr. Rolf Hellermann; Prize: 4,000 DM)
  • Second Prize of the Nachwuchswettbewerb zur 4. Dienstleistungstagung des Bundesministeriums für Bildung und Forschung, Best Research Paper Competition, Bundesministerium für Bildung und Forschung (BMBF), Former German Parliament, Bonn, Germany, October 2001 (Prof. Dr. Stefan Spinler; Prize: 2,000 DM)
  • Silver Award of the Student Paper Award of the ECR Academic Partnership 2000, ECR Academic Partnership, ECR Europe Conference, Turin, Italy, March, 2000 (WHU students: Anna Lena Peitsch, Jan Schulze and Christopher Steffens; WHU exchange students: Utsav Baijal and Vikash Daga; INSEAD doctoral student: Svenja Sommer; Prize: 1,000 DM)
Business and Retail Analytics

real Endowed Assistant Professorship of Retail Analytics

Industry - science cooperation

In March of 2019, a three year cooperation has been established between the retailer real and WHU – Otto Beisheim School of Management.  Mr. Marcel Uphues, Finance Director at real, and Dr. Toni Callabretti, Chairman of the WHU Foundation, signed the contract. The newly endowed real Assistant Professorship of Retail Analytics will be part of the Chair of Production Management of Prof. Dr. Arnd Huchzermeier.

Appointment

In the meantime, Dr. Marjolein Buisman from Wageningen University, The Netherlands, has been appointed by the WHU Senate and the Minister of Education and the Arts of Rhineland-Palatinate for this position. She joined WHU on February 1st of 2020.

real analytics research projects by topic:

  • Ringbeck, Daniel; Smirnov, Dmitry; Huchzermeier, Arnd (2019): Proactive Retention Management in Retail: Field Experiment Evidence for Lasting Effects. https://ssrn.com/abstract=3378498, 38 p.
  • Smirnov, Dmitry; Ringbeck, Daniel; Huchzermeier, Arnd (2018): Proactive Retention Management in Retail: Identifying, Predicting & Preventing Partial Defection. WHU – Otto Beisheim School of Management, 36 p.
  • Breiter, Andreas; Huchzermeier, Arnd (2015): Promotion Planning and Supply Chain Contracting in a High-Low Pricing Environment. Production and Operations Management, 24(2), 219-236, and https://doi.org/10.1111/poms.12250
  • Schmälzle, Michael; Huchzermeier, Arnd (2015a): Improving Demand Forecast Accuracy in a Continuous High-Low Pricing Environment with Multiple Customer Segments. WHU – Otto Beisheim School of Management, 32 p.
  • Schmälzle, Michael; Huchzermeier, Arnd (2015b): Promotional Demand Forecasts for Seasonal Products. WHU – Otto Beisheim School of Management, 32 p.
  • Schmälzle, Michael; Huchzermeier, Arnd; Länge, Stefan, Uphues, Marcel (2015): A Benchmark Analysis on Promotional Demand Forecasts for Retail Store Traffic Generators. WHU – Otto Beisheim School of Management, 36 p.
  • Breiter, Andreas; Huchzermeier, Arnd (2010): The New Logic of Truly Efficient Retail Promotions. International Commerce Review: ECR Journal, 9(1), Summer, 36-47
  • Breiter, Andreas (2010): Hedging Retail Promotions: Zero Out-of-Stock and Zero End-of-Period Coverage with Supply Options. Unpublished Dissertation, WHU – Otto Beisheim School of Management, 201 p.
  • Wiehenbrauk, Daniela (2010): Collaborative Promotions: Optimizing Retail Supply Chains with Upstream Information SharingSpringer, 153 p.
  • Huchzermeier, Arnd; Iyer, Ananth. V.; Freiheit, Julia (2002): The Supply Chain Impact of Smart Customers in a Promotional Environment. Manufacturing & Service Operations Management (Special Issue: Retail Operations Management), 4(3), Summer, 228-240, and https://doi.org/10.1287/msom.4.3.228.7755
  • Freiheit, Julia (2001): Smart Customers and Retail Promotions: Empirical Evidence and Supply Chain ImplicationsSpringer, 215 p.
  • Huchzermeier, Arnd; Iyer, Ananth. V.; Stolle, Julia (2000a): S.M.A.R.T.S.: Smart Shoppers and Retail Promotions. In: Corsten, D.; Jones, D.T. (Eds.): ECR in the Third Millenium: Academic Perspectives on the Future of the Consumer Goods Industry. Academic Partnership of ECR Europe, 42-45
  • Huchzermeier, Arnd; Iyer, Ananth. V.; Stolle, Julia (2000b): S.M.A.R.T.S.: Smart Consumers and Retail Promotions. In: Katayama, H. (Ed.): Proceedings of the 5th International Symposium on Logistics ‘Global Logistics for the New Millenium’. Waseda University, 533-540
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.

Canyon –
A case study.

Companies that sell seasonal and (non-seasonal) products often use judgmental demand forecasting by expert teams. However, biases need to be factored in to achieve high accuracy in predictions (see case study). Alternative sources of information can be utilized to increase predictive performance even further and to also curtail the required administrative and human effort in generating critical inputs especially when having to deal with a large and expanded product range being sold in different markets with multiple price promotions. 

All analytics research projects by topic:

  • Ringbeck, Daniel; Smirnov, Dmitry; Huchzermeier, Arnd (2019): Proactive Retention Management in Retail: Field Experiment Evidence for Lasting Effects. https://ssrn.com/abstract=3378498, 38 p.
  • Smirnov, Dmitry; Ringbeck, Daniel; Huchzermeier, Arnd (2018): Proactive Retention Management in Retail: Identifying, Predicting & Preventing Partial Defection. WHU – Otto Beisheim School of Management, 36 p.
  • Breiter, Andreas; Huchzermeier, Arnd (2015): Promotion Planning and Supply Chain Contracting in a High-Low Pricing Environment. Production and Operations Management, 24(2), 219-236, and https://doi.org/10.1111/poms.12250
  • Schmälzle, Michael; Huchzermeier, Arnd (2015a): Improving Demand Forecast Accuracy in a Continuous High-Low Pricing Environment with Multiple Customer Segments. WHU – Otto Beisheim School of Management, 32 p.
  • Schmälzle, Michael; Huchzermeier, Arnd (2015b): Promotional Demand Forecasts for Seasonal Products. WHU – Otto Beisheim School of Management, 32 p.
  • Schmälzle, Michael; Huchzermeier, Arnd; Länge, Stefan, Uphues, Marcel (2015): A Benchmark Analysis on Promotional Demand Forecasts for Retail Store Traffic Generators. WHU – Otto Beisheim School of Management, 36 p.
  • Breiter, Andreas; Huchzermeier, Arnd (2010): The New Logic of Truly Efficient Retail Promotions. International Commerce Review: ECR Journal, 9(1), Summer, 36-47
  • Breiter, Andreas (2010): Hedging Retail Promotions: Zero Out-of-Stock and Zero End-of-Period Coverage with Supply Options. Unpublished Dissertation, WHU – Otto Beisheim School of Management, 201 p.
  • Wiehenbrauk, Daniela (2010): Collaborative Promotions: Optimizing Retail Supply Chains with Upstream Information SharingSpringer, 153 p.
  • Huchzermeier, Arnd; Iyer, Ananth. V.; Freiheit, Julia (2002): The Supply Chain Impact of Smart Customers in a Promotional Environment. Manufacturing & Service Operations Management (Special Issue: Retail Operations Management), 4(3), Summer, 228-240, and https://doi.org/10.1287/msom.4.3.228.7755
  • Freiheit, Julia (2001): Smart Customers and Retail Promotions: Empirical Evidence and Supply Chain ImplicationsSpringer, 215 p.
  • Huchzermeier, Arnd; Iyer, Ananth. V.; Stolle, Julia (2000a): S.M.A.R.T.S.: Smart Shoppers and Retail Promotions. In: Corsten, D.; Jones, D.T. (Eds.): ECR in the Third Millenium: Academic Perspectives on the Future of the Consumer Goods Industry. Academic Partnership of ECR Europe, 42-45
  • Huchzermeier, Arnd; Iyer, Ananth. V.; Stolle, Julia (2000b): S.M.A.R.T.S.: Smart Consumers and Retail Promotions. In: Katayama, H. (Ed.): Proceedings of the 5th International Symposium on Logistics ‘Global Logistics for the New Millenium’. Waseda University, 533-540
  • Smirnov, Dmitry; Huchzermeier, Arnd (2020): Analytics for labor planning in systems with load-dependent service times. European Journal of Operational Research, forthcoming
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2019): Maximizing the Potential of Targeted Marketing – A General Framework for Customized Category Promotions in Retail. https://ssrn.com/abstract=3411661, 36 p.
  • von Mutius, Bernhard; Huchzermeier, Arnd (2020): Customer-Centric Category Selection for Mobile and Print Promotions in Loyalty Reward Programs. https://ssrn.com/abstract=3592311, 39 p.
Start-up

Campus Car –
Find out more about our scientific work.

In Spring 2010, Gunnar Froh and Prof. Dr. Arnd Huchzermeier founded the company Campus Car. In addition to 3 Daimler Smarts, a 1 Series BMW could also be rented from WHU students 7/24.

The company was supported by numerous sponsors, including the Neuwied Zoo. In return, the rear of two Smart vehicles was covered with advertising and the image of a tiger's head with foil. The costs for the rental were about 8€/h and were therefore far cheaper than taxi, comparable rental offers or even public transport and traffic. Nevertheless, the business had to be discontinued after 3 years due to a lack of demand and thus low capacity utilization.

In 2013, Gunnar Froh founded the company Wunder Mobility in the city of Hamburg. Wunder’s product ecosystem helps startups, corporates and cities around the globe launch and scale shared mobility services. In 2019, Wunder Mobility closed a $60 million round to expand its urban transport platform in the U.S..

Other projects and studies:

Wharton-WHU Global Supply Chain Benchmark Study

The operations executive‘s puzzle: Offshoring, nearshoring, or reshoring?

After years of low-cost offshoring a public debate about the future of manufacturing especially in developed countries was started motivated by reports about companies “reshoring” manufacturing operations, bringing it back to – or at closer to – regions such as North America or Western Europe. While much anecdotal evidence exists for such decisions, there is little empirical analysis that has been conducted at the level of specific supply chain sourcing decisions understanding current trends, their drivers and impact. With the Global Supply Chain Benchmark Study we intend to address these questions. The goal of this study is to benchmark current practices with regard to the following three questions:

  1. What global sourcing decisions have been made and what decisions are being contemplated?
  2. What are the drivers of these decisions?
  3. What has been their observed or expected impact?

Global supply chains are changing: Our sample tells us how exactly

During the past two years we worked with academics from leading business schools in the United States and Japan surveying leading global manufacturing companies from North America, Western Europe and East Asia on their current production sourcing decisions. Our analyses result in a set of findings which are to some extent surprising and confirm to some extent common perception:

  • Companies are currently restructuring their global production footprints. Our research provides evidence that firms from all industries and origins are indeed currently reconfiguring their supply chains on a global scale.
  • Hereby, a dominant strategy cannot be identified: Firms engage in wide variety of decisions, for a magnitude of reasons.
  • China still attracts production volume investments by 45% of the sample across all industries. Yet, the driving forces have changed. Proximity to markets and supply chain related factors have grown in importance not only for decisions to invest in China. Companies chasing labor cost arbitrage shift production from China to ASEAN
  • For North America evidence for a return of manufacturing can be found but a) not at a significant scale and b) not primarily as reshoring as 60% of manufacturing investments come from Asian and European firms
  • For Western Europe we observe a decline in manufacturing. Western Europe along with Japan are the only regions for which more firms in our sample reported divestments than investments. A majority of the divestments in Western Europe are motivated by cost (shifts to Eastern Europe) or market reasons (shifts to China)

If you want to learn more about the results of our study download the final report at The Wharton School. The report discusses the results on a global level and provides more detailed analyses on the decisions to invest or divest in specific regions as well as their implications on manufacturing employment. In the appendix we complement these analyses with insights into the decisions made by firms from the different industry clusters in our sample. Further publication based on this study will follow in academic journals.

Academic Consortium

Morris Cohen
The Wharton School, University of Pennsylvania

Ricardo Ernst and Shiliang Cui
McDonough School of Business, Georgetown University

Arnd Huchzermeier and Marc Steuber
WHU – Otto Beisheim School of Management, Germany

Panos Kouvelis
Olin Business School, Washington University St. Louis

Hau Lee
Graduate School of Business, Stanford University

Hirofumi Matsuo
Graduate School of Business Administration, Kobe University, Japan

Andy Tsay
Leavey School of Business, Santa Clara University

Publications

Article on "Benchmarking Global Production Sourcing Decisions" View more

Article on the Global Trade Website.

Final Report. 

Knowlege@Wharton interview with Prof. Morris Cohen on phase 1. View more

Knowlege@Wharton interview with Prof. Morris Cohen and Dr. Shiliang Cui on phase 2. View more

Supply Chain Navigator article on phase 1. View more

Supply Chain Navigator article on phase 2. View more

Editorship ECR Journal

The 'International Commerce Review: ECR Journal' keeps readers up-to-date with the latest research and newest thinking in consumer goods in an easy-to-read, straightforward way. This unique journal bridges the gap between consumer goods industry practitioners (both retailers and manufacturers) and academics, to the mutual benefit of both sides. It brings academics' best work to the attention of practitioners, and it communicates practitioners' research priorities and interests to academics.

Core areas of interest include the challenges, opportunities and pitfalls in collaboration and cooperation between organizations, across borders and between consumers, retailers and suppliers. The journal also deals with areas that contribute to improved supply chain workings including improved consumer insight and understanding, better marketing and merchandising, end-to-end logistics, the evolution of retail formats, use of data, technology, and standards.

Publications

Research collaborations

Academic partners

Industry partners

Research funding

Present funders