Lauren Xiaoyuan Lu

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Capacity addition and withdrawal decisions are among the most important strategic decisions made by …rms in oligopolistic industries. In this paper, we develop and analyze a fully dynamic model of an oligopolistic industry with lumpy capacity and lumpy investment/disinvestment. We use our model to suggest answers to two questions. First, what economic(More)
M oving production to low-wage countries may reduce manufacturing costs, but it increases logistics costs and is subject to foreign trade barriers, among others. This paper studies a manufacturer's multimarket facility network design problem and investigates the offshoring decision from a network capacity investment perspective. We analyze a firm that(More)
W e study how rework routing together with wage and piece-rate compensation can strengthen incentives for quality. Traditionally, rework is assigned back to the agent who generates the defect (in a self-routing scheme) or to another agent dedicated to rework (in a dedicated routing scheme). In contrast, a novel cross-routing scheme allocates rework to a(More)
T he existing outsourcing literature has generally overlooked the cost differential and contract negotiations between manufacturers and suppliers (by assuming identical cost structures and adopting the Stackel-berg framework). One fundamental question yet to be addressed is whether upstream suppliers' cost efficiency is always beneficial to downstream(More)
We consider a supply chain in which a supplier sells products to multiple retailers. When orders from the retailers exceed the supplier's capacity, she must employ an allocation mechanism to balance supply and demand. In particular, we consider a commonly used allocation scheme in the automobile industry: turn-and-earn, which uses past sales to allocate(More)
D espite the spread of cost-driven outsourcing practices, academic research cautions that suppliers' cost advantage may weaken manufacturers' bargaining positions in negotiating outsourcing agreements, thereby hurting their profitability. In this study, we attempt to further understand the strategic impact of low-cost outsourcing on manufacturers'(More)
a r t i c l e i n f o Keywords: Capacity investment and disinvestment Demand uncertainty Strategic uncertainty Dynamic stochastic games Markov-perfect equilibrium Even mature industries seldom settle down into a long-run steady state. Fluctuations in demand disrupt the status quo and call for firms to adjust their capacities on an ongoing basis. We(More)
W e analyze contracting behaviors in a two-tier supply chain system consisting of competing manufacturers and competing retailers. We contrast the contracting outcome of a Stackelberg game, in which the manufacturers offer take-it-or-leave-it contracts to the retailers, with that of a bargaining game, in which the firms bilaterally negotiate contract terms(More)
We analyze a dynamic bargaining game between a seller and a buyer, who negotiate over quantity and payment to trade for a product. Both firms are impatient, and they alternate in making a contract offer until an agreement is reached. The buyer is privately informed about his type, which can be either high or low, with respect to the property of the(More)
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