We model a situation in which two retailers consider launching an "Advance Booking Discount" (ABD) program. In this program, customers are enticed to precommit their orders at a discount price prior to the regular selling season. However, these precommitted orders are filled during the selling...

This paper introduces a Bayesian decision theoretic model of optimal production in the presence of learning-curve uncertainty. The well-known learning-curve model is extended to allow for random variation in the learning process with uncertainty regarding some parameter of the variation. A...

In the standard search problem there is an infinite pool of items whose distribution of values is known. A decision maker draws an item from the pool, observes its value, and decides whether to keep it or to draw another item. He can keep only one item, and he seeks the item with the largest...

We analyze a decision problem with repeated gambles and find that under some seemingly reasonable risk-averse utility functions, recommended behavior for the initial decision can be highly risk-taking and counterintuitive. Further analysis reveals that the derived utility function for the return...

A common myth/conception, based upon the notion of increasing returns to scale in R&D activity, is that large firms account for a disproportionate share of innovations. In this paper we consider three types of informational returns to scale (cheaper, faster, and better) and examine the impact of...

Faced with the decision of whether or not to adopt a new technology whose economic value cannot be gauged with certainty, the manager of the firm may elect to decrease the uncertainty by sequentially gathering information (at a unit cost of c 0), updating his prior beliefs in a Bayesian manner....

The profitability of a new technology is rarely known with certainty at its announcement date. Consequently, prior to making an adoption decision it behooves the firm considering the adoption of this innovation to reduce the level of uncertainty associated with its profitability. The firm...

When a product's price fluctuates at a store, how should rational, cost-minimizing shoppers shop for it? Specifically, how frequently should they visit the store, and how much of the product should they buy when they get there? Would this rational shopping behavior differ across Every Day Low...

We propose a game-theoretical model of a retailer who sells a limited inventory of a product over a finite selling season by using one of two inventory display formats: display all (DA) and display one (DO). Under DA, the retailer displays all available units so that each arriving customer has...

Expanding product variety and high customer service provision are both major challenges for manufacturers to compete in the global market. In addition to many ongoing programs, such as lead-time reduction, redesigning products and processes so as to delay the point of product differentiation is...