Lower Quality Level Research Articles

Improving supply quality through the store-initiated returns in wholesale supply chains

Problem definition:Retail stores often offer a return policy. However, not all customers choose to return the product when they are not satisfied. To improve the store’s brand value and reputation, offering store-initiated returns (SIRs) is an innovative practice for retailers, especially warehouse stores. With SIRs, customers are notified by a store that they can return items for a refund regardless of their satisfaction status. Academic/practical relevance:In this study, we investigate how SIRs affect the quality decision and the supply chain partners’ profits and discuss how customers’ decisions affect the implementation. Methodology:We formulate the problem as an inventory model with a single store and a single supplier. Results:When the warehouse club has the power to utilize the SIR option, the supplier generally has a stronger incentive to supply items of higher quality. However, in some specific scenarios where customers are significantly more sensitive to product quality and with a higher product return rate, the supplier can adversely choose to supply products at a lower quality level to lower the cost. In terms of profit, we show that the warehouse club’s profit is usually higher when the ability to initiate the SIR is available. In contrast, the supplier always earns a lower profit when the SIR option is available to the wholesale club. To reduce the reverse logistic cost, we also investigated the costs and benefits of utilizing a gift card option instead of a passive cash refund. We find that when the expected cost of the items purchased with the gift card is lower than the total loss from the SIR, a feasible cost-sharing scheme always exists such that both the supplier and the store benefit from the gift card option. Managerial implications:These results provide valuable insights into the potential benefits and issues that stores may face when implementing SIRs to improve customer satisfaction. It demonstrates the possibility of increasing product quantity and customer satisfaction with SIR strategy.

Analysis of Quality Control of Raw Materials with the Seven Tools Method on Sweet Bread Products at UD. Sarigut Bakery in Banda Aceh

Product quality is an important factor that affects the level of development and progress of a company. Companies that operate without paying attention to the quality of their products are tantamount to losing hope for the future of the company. The resulting product must always be checked for compliance with the established standards, so that the damage that occurs to the product can be reduced and eliminated. This study aims to analyze the quality control of raw materials using the seven tools method on sweet bread products at UD. Sarigut Bakery Banda Aceh. This research data is primary data obtained by researchers from questions posed to original sources and also observations of researchers at the location directly. The results of the study found that the quality control of raw and supporting materials was not good enough because the company was not able to maintain the quality standards and brands of materials set by using non-standard materials with lower quality levels. As for the feasibility of the storage warehouse, the control is quite good because the arrangement and placement of materials is orderly and the cleanliness of the warehouse and factory is quite well maintained. Disability caused by working hours is R² = 0.1336 or 13.36%. Defects due to long storage of raw materials are R² = 0.7254 or 72.54%. Meanwhile, defects due to the use of non-standard wheat flour raw materials are R² = 0.8621 or 86.21%. Non-standard raw materials are the biggest factor in causing product defects, this is caused by the condition of substitute materials that are not up to standard, which results in high water content in bread. Keywords: Quality control of raw materials, seven tools, sweet bread

Raising funds through crowdfunding for a capital-constrained servicing manufacturer

Servitization (service-oriented manufacturing) is an emerging business model under which a manufacturer offers services derived from physical goods. A servicing manufacturer is more likely to be capital-constrained, as its revenue is monetized over a long period of time. Therefore, we explore how a capital-constrained servicing manufacturer raises funds through crowdfunding. We construct a game-theoretical model to capture the optimal decisions (quality and price) of a servicing manufacturer facing two types of customers. In our paper, the endogenous quality level is derived by tailoring the service to consumers’ needs. According to the posted quality level, customers determine their optimal usage of the service, which impacts the target of crowdfunding. We find that when both types of customers share the same product in crowdfunding, a higher proportion of high-end customers will lead to a lower quality level determined by the manufacturer. In addition, the servicing manufacturer also optimizes price decisions to induce high-type customers to make a contribution to the success of crowdfunding. These results underscore the influence of the crowdfunding mechanism on the servicing manufacturer’s decisions. However, offering a product line lets no one sacrifice interests for the success of crowdfunding. Both the manufacturer and customers obtain the highest benefits because servitization enables the manufacturer to provide customers with customized services. We argue that servitization improves the performance of crowdfunding by allowing the manufacturer to optimize operational decisions.

Posted price and name-your-own-price in a product line design problem

In this research, we address Name your own price (NYOP) as a mechanism to offer products with transparent, rather than opaque, quality levels. We compare posted price (PP) and NYOP in a product line design problem from a firm’s viewpoint. We first consider the firm offering two vertically differentiated products that each can be priced by NYOP or PP. The quality level of products is considered either as a decision variable or as a fixed predetermined value for the firm. A customer correspondingly decides which product to purchase and if applicable, the bid at NYOP. We characterize both the customer’s and the firm’s decisions under four possible pricing scenarios. The results show that, it is most profitable for the firm to use PP for both products. We then consider if each product is offered by a competitive firm, where quality levels might again be decision variables or fixed. Results show that both competitive firms prefer PP to NYOP when they can create quality differentiation. The firm that offers the product with a lower quality level prefers PP to NYOP for all combinations of fixed quality levels as well. The other firm, with a higher quality level, also usually prefers PP to NYOP; However, it can be better off using NYOP when fixed quality levels are large and close enough to each other. In this case, the preference of NYOP over PP increases as customers’ willingness to pay enhances.

Adaptive Transceiver Architecture With QoS Provision for OCDMA Network Based on Logic Gates

Utilization of an adaptable transceiver with quality of service (QoS) features is a promising notion to build next generation optical network. This paper proposes an adaptive transceiver design by adopting logic gates in the optical domain. The proposed design offers multiple scenarios to support QoS diversity with a slight modification of conventional optical code division multiple access (OCDMA) transceiver architecture through Sigma Shift Matrix (SSM) signature code. In particular, the proposed transceiver design categorizes the users into two classes of service, one having a higher quality level and the other having a lower quality level. Users of high class transmit at low interference versus high interference power for low classes’ users. To switch between the multiple scenarios, an optical Mux performs digital operation is developed and integrated to the transceiver design. This type of MUX is built by using a semiconductor optical amplifier (SOA). In addition, a comprehensive algorithm is developed to control the function of the adaptable transceiver. Five scenarios were formed and investigated to offer a platform for a different type of applications. A proof concept using Optisystem software demonstrates ability of the proposed architecture to efficiently switch between different levels of QoS as per user requirement and provide desired transmission capacity

Rural Status of Equine Assisted Activities and Therapies and Cancer Survivors

Background: Although equine assisted activities and therapies (EAAT) are rapidly increasing, as are cancer survival rates, little is known about the engagement of cancer survivors in EAAT. One may conceptualize equine or horse related activities as occurring in rural areas; however, the rural status of EAAT centers are not fully reported.Purpose: To explore the rural status of EAAT centers, and whether EAAT is provided for cancer survivors and the more common service for post-traumatic stress disorder at those centers.Method: A quantitative descriptive analysis was conducted of publicly available data after an exempt status decision of an Institutional Review Board. Services using EAAT for those with terminal illnesses, post-traumatic stress disorder and cancer survivors were examined. Rural status was evaluated for all organizational members (N = 784) of Professional Association of Therapeutic Horsemanship International (PATH Intl.). Roy adaptation model was used as a theoretical framework in this project.Findings: All types of the organizational members, cluster in urban areas more than rural areas. Significant relationship (p = 0.039) was found between rural status and type of membership, where more urban than rural centers were premier accredited center members. Most of the contacted and responding centers stated that they do provided EAAT for cancer survivors (n = 204); however, only (n = 26) centers have programs specifically designed for cancer survivors.Conclusion: There are not only less EAAT rural than urban centers, but rural centers also tend to have lower quality level membership based on PATH Intl. standards. Although EAAT is provided for cancer survivors, identifying effective ways to provide EAAT and standardization of programs for cancer survivors is recommended.
 DOI: http://doi.org/10.14574/ojrnhc.v20i2.601

Selection of potential molecular markers for cheese ripening and quality prediction by NMR spectroscopy

Predicting cheese quality as early as possible after ripening is important for quality control in the cheese industry. The main aim of this study was to investigate potential metabolites for predictive models of Cheddar cheese quality. Metabolites in aqueous extracts of Cheddar cheese were identified by Nuclear Magnetic Resonance. The metabolites were used to measure the kinetics of up to 450 days ripening in Cheddar cheese. The proton ratios of citrulline and arginine relative to the overall proton content of the aqueous extract are the most important indices for assessing the ripening of Cheddar cheese. The ratios of citrulline and arginine decrease by 59% and 69%, respectively, after 450 days ripening. In comparison to the premium batch B cheese, batch C which was predicted to attain a lower quality level, had higher serine and β-galactose as well as lower lactic acid levels and also had a less mature sensorial profile. Tyrosine, tyramine and lysine are highly correlated with mature Cheddar cheese sensory attributes. β-Galactose and glycerol are correlated with young Cheddar cheese sensory attributes. These metabolites can be used to predict cheese quality.

Quality choice and behavior-based price discrimination

This study examines the impacts of behavior-based price discrimination (BBPD) on profits, consumer surplus, and welfare when firms choose their product qualities. To this end, we consider a differentiated duopoly model in which firms first make quality decisions, and in the two subsequent periods, compete in prices according to the pricing scheme, namely, uniform pricing or BBPD. We show that when consumers are more than moderately forward-looking, firms choose lower quality levels under BBPD than under uniform pricing. The profit and consumer surplus effects of BBPD relative to uniform pricing depend on the level of consumers’ myopia and/or quality improvement costs. When consumers are sufficiently myopic or quality costs are high, BBPD reduces industry profits and raises consumer surplus. However, the reverse happens when consumers are sufficiently forward-looking and quality costs are low. Interestingly, BBPD is detrimental to both firms and consumers when consumers are sufficiently forward-looking and quality costs are moderate, or when consumers are moderately forward-looking and quality costs are low. Social welfare is always lower under BBPD than under uniform pricing.

Classroom composition and quality in early childhood education: A systematic review

High-quality early childhood education appears to be particularly beneficial for disadvantaged children, since it may help reduce an initial achievement gap. Yet, these children are frequently enrolled in disadvantaged classrooms with lower quality levels. Thus, classroom composition and quality may be associated, but evidence is scarce. In this review, we gathered evidence regarding classroom composition indexes and their association with observed classroom quality, reported in 25 studies that met the inclusion criteria. The majority of studies were conducted in the United States, with disadvantaged samples of children. Classroom composition indexes used were mainly calculations of the percentage, proportion, and average/mean of a particular type of characteristic at the classroom level, that generally captured classroom homogeneity. Most studies focused on minority and socioeconomic status. ECERS and CLASS were the most frequently used standardized observation measures of classroom quality. Evidence suggests that in classrooms with a high concentration of children with minority status and from low income families, quality tends to be lower, particularly on the CLASS emotional and instructional support domains. Additional research, particularly outside the USA, focused primarily on the association between different types of classroom composition and ECE quality is warranted.

Manufacturer’s channel strategy with retailer’s store brand

This paper examines the manufacturer’s channel strategy as it considers introducing an online channel to sell its own national brand (NB) product, when the brick-and-mortar retailer sells both the NB and its own lower-quality store brand (SB) product. The manufacturer is motivated to introduce an online channel when the customers’ ‘hassle cost' of shopping online is relatively low and their transportation cost is relatively high. However, our results also demonstrate that when the online shopping hassle cost is high and the transportation cost is low, and even when there are very few sales in the online channel, the online-sales strategy can still contribute positively to the manufacturer’s profit. The introduction of the online channel by the manufacturer may result in a win-win situation for the manufacturer and the retailer. As a corollary effect, when the retailer is able to determine the SB quality, it should position the SB at a lower quality level to avoid competition with the manufacturer’s online channel.

COMMODITY STUDY OF DEVELOPED CUPCAKES OF ORGANIC RAW MATERIALS

For widening the assortment of floury confectionary products of organic raw materials, recipes of new cupcakes of sandy dough “Cosmic” and “Lunik” were offered. The recipe of cakes “Cosmic” included the organic raw materials: rice flour, grinded ginger, lemongrass powder, coconut sugar, creamy butter and sea buckthorn oil, mélange of chicken eggs, black ashberry jam. The recipe of cakes “Lunik” included rice flour, combined with spelt one, lemongrass powder, coconut sugar, creamy butter and sea buckthorn oil, mélange of chicken eggs, organic blackberry jam. A control sample was baskets with jelly and fruits, prepared by the traditional recipe. The main difference of the offered samples is in fact that they are prepared of the organic raw materials only. Margarine is a fatty base of the control sample. It is offered to replace the fatty base by creamy butter and sea buckthorn oil. The production technology of a sandy semi-product consists of four stages: preparation of raw materials for production, preparation of a sandy semi-product, its formation, baking. This paper offers the developed scale of organoleptic estimation of the cupcake quality and presents results of studying its food value. The highest quality level by organoleptic parameters was fixed in the “Lunik” sample – 0.96; in the “Cosmic” sample, the quality level is also rather high – 0.95; the control sample differed by much lower quality level – 0.83. The developed samples differed by lower energetic value, namely, 351.00 kcal and 313.50 kcal in the “Cosmik” and “Lunik” samples, respectively, whereas for the control sample this number was 433.70 kcal. The offered recipes of cupcakes included the higher protein content than the control – 7.40 and 7.58g/100 g for “Cosmic” and “Lunik” samples, respectively, whereas the protein content in the control was 5.40 g/100 g.

Product-Line Design in the Presence of Consumers’ Anticipated Regret

Consumers are often uncertain about their valuations for product quality when choosing among different products and will learn their valuations only after buying and using a product. Some consumers may thus experience overpurchase or underpurchase regret, depending on whether they have purchased a higher- or lower-quality level than what they would have chosen had they known their true valuations. When consumers anticipate their potential postpurchase regret, their purchase decisions may be affected. Our analysis shows that overpurchase regret lowers the firm’s profit, but underpurchase regret can benefit the firm if consumers’ overpurchase regret is not strong. When the firm optimally designs its product line, the quality difference between its offerings will be larger (smaller) if consumers’ anticipated regret increases (reduces) its profit. Surprisingly, although anticipated regret tends to reduce consumers’ utility, in equilibrium, the presence of anticipated regret can increase consumers’ expected surplus. We further examine when the firm should allow consumers to return their products by paying a restocking fee and how the optimal restocking fee will change with consumers’ propensities for the two types of regret. We also experimentally show that consumers’ propensities of underpurchase and overpurchase regret are different and can be influenced by the firm’s messages. This paper was accepted by Juanjuan Zhang, marketing.

Product-Line Design in the Presence of Consumers’ Anticipated Regret

Consumers are often uncertain about their valuations for product quality when choosing among different products and will learn their valuations only after buying and using a product. Some consumers may thus experience over-purchase or under-purchase regret, depending on whether they have purchased a higher or lower quality level than what they would have chosen had they known their true valuations. When consumers anticipate their potential post-purchase regret, their purchase decisions may be affected. Our analysis shows that over-purchase regret lowers the firm’s profit, but under-purchase regret can benefit the firm if consumers’ over-purchase regret is not strong. When the firm optimally designs its product line, the quality difference between its offerings will be larger (smaller) if consumers’ anticipated regret increases (reduces) its profit. Surprisingly, although anticipated regret tends to reduce consumers’ utility, in equilibrium, the presence of anticipated regret can increase consumers’ expected surplus. We further examine when the firm should allow consumers to return their products by paying a restocking fee, and how the optimal restocking fee will change with consumers’ propensities for the two types of regret. We also experimentally show that consumers’ propensities of under-purchase and over-purchase regret are different and can be influenced by the firm’s messages.

Competitive strategies and quality to counter parallel importation in global market

When selling products globally in geographically separated markets with price discrimination, manufacturers often have to compete with parallel importers (PIs) who sell “gray products,” purchasing the manufacturers’ authorized products in low-price markets and reselling them in high-price markets. In this paper, we show that manufacturers can use ex ante quality design along with distribution strategies to mitigate the negative impacts of parallel importation. We develop game-theoretic models for a supply chain with a manufacturer and a PI, in which the manufacturer needs to determine distribution structure (either selling through high-price market exclusively, or selling through two channels), product quality, and retail prices. If a dual-channel structure is selected, the manufacturer also should decide the channel opening time in the low-price market, either early or late. Our results suggest that (1) the manufacturer should strategically choose a lower quality level when designing its product to weaken the PI's competitiveness; (2) the manufacturer's optimal distribution strategy is determined by the gap between customers’ willingness to pay (WTP) in the two markets and the customer's tolerance for late consumption; and (3) parallel importation hurts the customer surplus (CS) and social welfare (SW) in the low-price market, and benefits CS and SW in the high-price market when the two markets are moderately balanced. We then consider several important extensions to provide additional insights. Firstly, we show that the appropriate marketing investment in the low market can effectively counter the PI. Secondly, we examine the impact of multiple competing PIs on the manufacturer's decisions, including distribution strategy, quality design, prices, and profit. Lastly, we find that the advertising effect may motivate the manufacturer to improve product quality and benefit both the manufacturer and PI if the effect is relatively strong.

Application of Taguchi model to valuation of information security technology considering security quality failure

As interests in intangible assets in a digital economy have been growing, technology valuation is becoming increasingly more important in information technology management. Most existing valuation methods do not reflect the unique characteristics of technology. Thus, this paper aims to suggest an approach for technology valuation that considers the nature of information security technology. First, technological value is evaluated by scoring value factors that are used to analyse the intrinsic characteristics and application of technology. Second, to evaluate the market value, the expected profit of the technology will be deduced by using an income approach, reflecting on the characteristics of information security products and services. The weighted sum of factors from the previous scoring process plays a role in adjusting the expected profit. Third, the Taguchi loss function is applied to calculate the amount of social loss incurred due to the lower quality level of security. The final result of technology valuation is presented by integrating the expected profit and social loss. The proposed approach is illustrated with a case of safe symmetric key algorithm, one of information security technologies in Korea. The results of technology valuation will provide objective information for technology transfer and the selection of R&D projects.

Efficient Delivery of Scalable Video Using a Streaming Class Model

When we couple the rise in video streaming with the growing number of portable devices (smart phones, tablets, laptops), we see an ever-increasing demand for high-definition video online while on the move. Wireless networks are inherently characterised by restricted shared bandwidth and relatively high error loss rates, thus presenting a challenge for the efficient delivery of high quality video. Additionally, mobile devices can support/demand a range of video resolutions and qualities. This demand for mobile streaming highlights the need for adaptive video streaming schemes that can adjust to available bandwidth and heterogeneity, and can provide a graceful changes in video quality, all while respecting viewing satisfaction. In this context, the use of well-known scalable/layered media streaming techniques, commonly known as scalable video coding (SVC), is an attractive solution. SVC encodes a number of video quality levels within a single media stream. This has been shown to be an especially effective and efficient solution, but it fares badly in the presence of datagram losses. While multiple description coding (MDC) can reduce the effects of packet loss on scalable video delivery, the increased delivery cost is counterproductive for constrained networks. This situation is accentuated in cases where only the lower quality level is required. In this paper, we assess these issues and propose a new approach called Streaming Classes (SC) through which we can define a key set of quality levels, each of which can be delivered in a self-contained manner. This facilitates efficient delivery, yielding reduced transmission byte-cost for devices requiring lower quality, relative to MDC and Adaptive Layer Distribution (ALD) (42% and 76% respective reduction for layer 2), while also maintaining high levels of consistent quality. We also illustrate how selective packetisation technique can further reduce the effects of packet loss on viewable quality by leveraging the increase in the number of frames per group of pictures (GOP), while offering a means of reducing overall error correction and by providing equality of data in every packet transmitted per GOP.

Parental socio-economic status and childcare quality: Early inequalities in educational opportunity?

This study examines whether children from potentially disadvantaged families attend early childhood education and care (ECEC) centers of lower quality compared to more advantaged children in the universal and strongly state-subsidized ECEC system in Germany. We combine the representative German Socio-Economic Panel (SOEP) with the 2014 K2ID- SOEP extension study on ECEC quality. We run linear and logistic regression models of 32 quality indicators based on 818 children who attend 749 ECEC groups in 647 centers. The findings provide evidence that migrant children and in particular children of low-educated parents experience moderately lower quality levels on some structural and orientation quality characteristics. Children from income poor or single parent households receive lower quality on few, hardly observable characteristics. In conclusion, financial resources may be less critical for families’ use of high-quality ECEC than knowledge, preferences, or networks which are stratified by educational qualifications and culture.

Competing with Copycats When Customers Are Strategic

In this paper, we use a two-period game theoretical model to examine the decisions of a manufacturer and a copycat firm who are competing for strategic customers. The manufacturer decides on the amount of its market expansion advertising investment in the first period and on its pricing strategy in both periods. Advertising increases the “size of the pie,” but eventually the manufacturer may end up inadvertently sharing the benefits with the copycat. After the first period, the copycat makes a market-entry decision, and, if it opts to enter, it also decides on a pricing strategy. The customers are strategic, and they decide whether or not to buy, when to buy, and which product to buy. We find that, interestingly, lower quality levels of the manufacturer’s product may increase the manufacturer’s prices and profit. Moreover, the manufacturer may be worse off when customers are more likely to purchase its product immediately rather than wait for a price reduction or for the copycat’s product. Finally, the copycat may be worse off when customers withhold their purchases in the first period in anticipation of the possibility of copycat product becoming available in a later period.The online appendix is available at https://doi.org/10.1287/msom.2016.0613 .

Selling through outlets: The impact of quality, product development risk, and market awareness

We consider a monopolist manufacturer of a luxury good who currently sells a product through a retail store. The manufacturer must decide whether to also offer this product, at a lower quality level, through a factory outlet store. We study how this decision depends on the relative qualities of the products offered on the two channels, as well as the manufacturer's ability to develop successful new products. Our multi-period model captures both risky new product development and the impact of outlet sales on the manufacturer's brand awareness. We find that the manufacturer's optimal strategy will be one of three options: expand into the existing outlet channel by introducing a low-quality version of the product, do not expand into the outlet channel, or expand into the outlet channel only when new product development is successful. The “wait and see” strategy becomes optimal when the fixed cost associated with expanding into the outlet channel is moderate and the likelihood of successful new product development is low. In this case, expanding into the outlet channel is only preferred when new product development is successful because successful development helps counteract the negative impact of outlet sales on the perceived exclusivity of the brand. Finally, we demonstrate that the manufacturer's optimal strategy is dependent on the level of product differentiation provided by the outlet and the impact of brand awareness on brand quality.

Pricing Problems Under the Nested Logit Model with a Quality Consistency Constraint

We consider pricing problems when customers choose among the products according to the nested logit model and there is a quality consistency constraint on the prices charged for the products. We consider two types of quality consistency constraint. In the first, there is an inherent ordering between the qualities of the products in a particular nest and the price for a product of a higher quality should be larger. In the second type of constraint, different nests correspond to different quality levels; the price for any product in a nest corresponding to a higher quality level should be larger than the price for any product in a nest corresponding to a lower quality level. Prices for the products are chosen from a finite set of possible prices. We develop algorithms to find the prices to charge for the products to maximize the expected revenue obtained from a customer, while adhering to a quality consistency constraint. Our algorithms are based on solving linear programs whose sizes scale polynomially with the number of nests, number of products, and number of possible prices for the products. We also give extensions to the cases beyond the two types of quality consistency constraints. Numerical experiments indicate that our algorithms can effectively compute the optimal prices even when there is a large number of products in consideration.