Retail Cost Research Articles

Promised hassle time management in online retailing with fraudulent and regretful customers

Fraudulent customer return behavior, called “wardrobing,” incurs significant product return costs for online retailers. However, customers can also behave regretfully in online retailing, causing high product return costs. Consequently, we explore the combined effect of fraudulent and regretful customers in product returns. Research suggests implementing restrictive return policies to curb huge return costs due to fraudulent and regretful customer behaviors. One of the ways to implement a restrictive policy is by introducing hassle time. Consequently, retailers commit promised hassle times to customers, during which the retailers can approve the product returns and issue refunds. As a result, we determine how an online retailer can respond to regretful and fraudulent customers through promised hassle time while considering the stochastic nature of hassle time. In some situations, an online retailer might know that hassle time follows a specific probability distribution; in others, a retailer might not know the distribution. Therefore, we determine the optimal promised hassle time an online retailer must promise to regretful and fraudulent customers in each situation. For the first situation, we determine that a specific ratio, which we call the customer ratio, determines how the optimal promised hassle time changes with customers' fraud and regret levels. If the customer ratio is one, the optimal promised hassle time does not change; if it is greater than one, the optimal promised hassle time increases; and if it is less than one, the optimal promised hassle time decreases, with an increase in fraud and a decrease in regret levels. For the second situation, we propose a novel decision-making tool for online retailers, enabling them to optimize the promised hassle time. Finally, we generalize the results of our study to order cancellations with regretful customers, and shared mobility services.

An equilibrium analysis of blockchain integration strategies in the livestock meat supply chain considering consumers’ preference for quality trust

PurposeThis paper aims to explore blockchain integration strategies within a three-level livestock meat supply chain in which consumers have a preference for quality trust in livestock meat products. The paper investigates three questions: First, how does consumers’ preference for quality trust affect blockchain integration and transaction decisions among supply chain participants? Second, under what circumstances will retailers choose to participate in the blockchain? Finally, how can other factors such as blockchain costs and supplier–retailer partnership value affect integration decisions?Design/methodology/approachThis paper formulates a supply chain network equilibrium model and employs the logarithmic-quadratic proximal prediction-correction method to obtain equilibrium decisions. Extensive numerical studies are conducted using a pork supply chain network to analyze the implications of blockchain integration for different supply chain participants.FindingsThe results reveal several key insights: First, suppliers’ increased blockchain integration, driven by higher quality trust preference, can negatively affect their profits, particularly, with excessive trust preferences and high blockchain costs. Second, an increase in consumers’ preference for quality trust expands the range of unit operating costs for retailers engaging in blockchain. Finally, the supplier–retailer partnership drives retailer blockchain participation, facilitating enhanced information sharing to benefit the entire supply chain.Originality/valueThis study provides original insights into blockchain integration strategies in an agricultural supply chain through the application of the supply chain network equilibrium model. The investigation of several key factors on equilibrium decisions provides important managerial implications for different supply chain participants to address consumers’ preference for quality trust and enhance overall supply chain performance.

Diet affordability: a key dimension in the assessment of sustainable food systems and healthy diets.

A promulgated global shift toward a plant-based diet is largely in response to a perceived negative environmental impact of animal food production, but the nutritional adequacy and economic implications of plant-sourced sustainable healthy dietary patterns need to be considered. This paper reviews recent modeling studies using Linear Programming to determine the respective roles of animal- and plant-sourced foods in developing a least-cost diet in the United States and New Zealand. In both economies, least-cost diets were found to include animal-based foods, such as milk, eggs, fish, and seafood, to meet the energy and nutrient requirements of healthy adults at the lowest retail cost. To model a solely plant-based least-cost diet, the prevailing costs of all animal-sourced foods had to be increased by 1.1 to 11.5 times their original retail prices. This led to the inclusion of fortified plant-based foods, such as fortified soymilk, and a plant-based diet that was considerably (34-45%) more costly. The first-limiting essential nutrients were mostly the vitamins and minerals, with special focus on pantothenic acid, zinc, and vitamin B-12, when transitioning from an animal- and plant-containing least-cost diet to a plant-only based least-cost diet. Modeled least-cost diets based on contemporary food costs include animal-sourced foods, at least for developed high-income US and NZ food economies, and potentially for developing low- and middle-income countries, such as Indonesia. Modeling of least-cost diets that consist exclusively of plant-based foods is feasible, but at a higher daily diet cost, and these diets are often close to limiting for several key nutrients. Diet affordability, as a key dimension of sustainable healthy diets, and the respective economic roles of animal- and plant-sourced foods need to be considered.

Research on Green Supply Chain Decision-Making Considering Consumers' Low Carbon Awareness and Cost Sharing

With the global vigorous promotion of the development of green economy, advocating the practice of green concept, sustainable development has become a new problem that the world attaches great importance to. This paper considers the factors of consumers ' low-carbon awareness, discusses the pricing decisions in different situations, and looks for the optimal decisions of manufacturers and retailers. It is found that the enhancement of consumers ' low-carbon awareness is conducive to the increase of supply chain profit, and the retailer 's cost sharing ratio can improve the supply chain profit within a certain range.

Online Impulsive Buying Behavior of Mobile Site Shoppers in Turkey: A Mediation Analysis

Objective: The study investigates the correlation between mobile site quality (MSQ) factors and perceived enjoyment. It also explores the link between perceived enjoyment and both electronic word-of-mouth (eWOM) and online impulsive buying behavior of mobile site shoppers in Turkey. Theoretical Framework: The theoretical framework considers MSQ factors (contact, responsiveness, efficiency, fulfillment, and privacy), perceived enjoyment, eWOM and online impulsive buying behavior. Method: This study employs a quantitative methodology, utilizing a questionnaire as the primary data collection tool, designed for a sample size of 676 individuals fromTurkey selected through Purposive Sampling technique. The data analysis method employed is Structural Equation Modeling (SEM), utilizing the AMOS software to assess the goodness of fit statistics of the measurement model with the empirical data. Results and Discussion: The results showed that the contact, efficieny, and the privacy of mobile site influence perceived enjoyment positively. Perceived enjoyment influences both eWOM and online impulsive buying behavior positively and finally eWOM influences online impulsive purchasing behavior positively as well. Research Implications: The results suggest that improvements in MSQ factors of the contact, efficieny, and the privacy can provide mobile site shoppers more enjoyment and while perceived enjoyment has been increasing the probability of mobile site shoppers’ impulsive buying behavior, it also provides more effective marketing campaigns with less costs for the mobile retailers in Turkey. Originality/Value: This study makes a significant contribution to the existing online impulsive behavior literature by focusing on the MSQ elements of mobile shopping sites among shoppers in Turkey. It examines the mediation of perceived enjoyment between all MSQ elements and online impulsive buying behavior, as well as eWOM between perceived enjoyment and online impulsive buying behavior, which have not been extensively explored in prior research.

An Investigation into the Influence of E-commerce Platforms on Local Retailers: A Case Study of Kollam District

The impact of the Internet and e-commerce on traditional retailing has been a topic of extensive debate, with divergent views ranging from apocalyptic predictions of the demise of physical retail to assertions of minimal impact on traditional retailing. Despite the exaggerated hype, occasional high-profile failures, and the multitude of conflicting perspectives, e-commerce processes offer the potential for a profound reevaluation of retail operations and retailer behavior. Indeed, the advent of e-commerce necessitates a reassessment of existing retail practices and cost structures in response to the influx of new technologies and evolving retail structures. While the e-commerce market continues to expand rapidly, it is important to note that this growth does not necessarily translate to a significant decline in the traditional retail market. Shopping malls are not shuttering at an alarming rate, nor are the retail outlets of beloved brands disappearing due to online competition. However, there is undeniably a paradigm shift underway, with consumers increasingly turning to online platforms for their shopping needs. This shift presents a unique challenge for private sector employers in the retail industry, who must navigate the changing landscape and adapt their strategies to remain competitive. While online shopping offers unparalleled convenience and accessibility, traditional retailers must leverage their strengths in areas such as personalized customer service, immersive shopping experiences, and community engagement to differentiate themselves in an increasingly crowded marketplace. As e-commerce continues to reshape the retail landscape, it is imperative for retailers to embrace innovation, invest in digital capabilities, and explore new business models to thrive in this evolving environment. By understanding and harnessing the potential of e-commerce technologies, retailers can not only survive but also thrive in the dynamic and interconnected world of modern retailing.

The Complexities in the R&D Competition Model with Spillover Effects in the Supply Chain

This study aims to investigate the research and development (R&D) competition within the supply chain, focusing on two aspects: R&D competition at the manufacturing level and competition in pricing strategies. This paper establishes a dynamic game model of R&D competition, comprising two manufacturers and two retailers, with both manufacturers exhibiting bounded rationality. The key findings are as follows: (1) an increase in the adjustment speed positively affects the chaotic nature of the R&D competition system, leading to a state of disorder. This chaotic state has adverse implications for manufacturing profitability. (2) The spillover effect exhibits a positive relationship with the level of chaos in the R&D competition system. A greater spillover effect contributes to a more turbulent environment, which subsequently impacts the profitability of manufacturers. (3) R&D cost parameters exert a positive influence on the stability of the R&D competition system. When the system reaches a state of equilibrium, an escalation in the R&D cost parameters poses a threat to manufacturer profitability. (4) Retailer costs play a detrimental role in the stability of the R&D competition system. As retailer costs increase, there is a decline in R&D levels, thereby diminishing manufacturer profitability. (5) To mitigate the chaotic state, we propose the implementation of the time-delayed feedback control (TDFC) method, which reflects a more stable state in the R&D competition system.

Long-term emission reduction strategy in a three-echelon supply chain considering government intervention and Consumers’ low-carbon preferences

This paper investigates a three-echelon supply chain that consists of a supplier, a manufacturer, and a retailer. Owing to the government intervention and consumers’ low-carbon preferences, the market share is influenced by the carbon emission reduction technology improvement of the supplier and manufacturer and the low carbon advertisement of the retailer. We then construct the differential game model of three-echelon supply chain from the perspectives of decentralized, governmental intervention, supplier cost sharing and governmental intervention, and retailer cost sharing and governmental intervention. Main results are as follows: (1) the manufacturer and supplier's active investment in emission reduction technologies and retailer's advertisement will consistently increase the profits of supply chain members; (2) given that the government subsidizes the manufacturer's carbon emission reduction technology through tax exemption or tax reduction, the manufacturer will always fall into a prisoner's dilemma once the government's carbon emission limit exceeds a certain threshold range; (3) consumer preferences will have a positive effect on manufacturer and supplier's emission reduction strategies, whereas it has nothing to do with retailer's advertisement, and retailer's investment in advertising only depends on manufacturer's subsidy policy; (4) compared with decentralized scenario, Pareto improvement can always be realized whether the manufacturer chooses to cooperate with the supplier or retailer. Our results can provide theoretical basis for the carbon emission strategy of three-echelon supply chain members in low-carbon environment.

Understanding the demand for and value of pathogen‐free amphibians to US pet owners

AbstractPathogen transmission through wildlife trade has become a significant One Health issue, but businesses involved in trade can take actions to minimize pathogen spread within and beyond trade networks. Such actions could include an industry‐led clean‐trade certification program whereby retailer costs for enhanced biosecurity and disease‐free product certification are offset by increased prices to consumers. However, we currently know little about the demand for, and value of such a program to consumers. With the case of pet amphibian owners in the United States, we assessed what characteristics make people more likely to demand certified wild animals and how much more in price premium they are willing to pay for such animals. Findings suggested that the demand for pathogen‐free amphibians was driven by the perceived risk of pathogen spillover to wild populations, behavioral control in preventing transmission, and other characteristics related to pet ownership and demographics. On average, respondents were willing to pay $38.65 per animal more for certified pathogen‐free amphibians than non‐certified amphibians. Findings lend support for the viability of an industry‐led clean‐trade program aimed at enhancing animal well‐being, increasing customer satisfaction, and reducing the risk of pathogen transmission within and beyond the pet trade network.

Fulfillment costs in online grocery retailing: comparing retail store and warehouse strategies

This study develops a framework that structures the operational costs of online grocery retailing in order to identify which is the most suitable e-fulfillment strategy. The cost framework was designed by applying time-driven activity-based costing (TDABC) and is based on the insights of two large European grocery retailers, which operate retail store and warehouse e-fulfillment strategies respectively. Cost information was collected, and activity-oriented process modeling was carried out in the field to identify the most relevant e-fulfillment cost drivers. For the retail store strategy, picking costs were the highest among e-fulfillment activities and up to twice as high as for the warehouse strategy. For the warehouse strategy, delivery costs were the highest and 50% higher than for the retail store strategy. Less studied logistics activities such as unpacking and reverse logistics all together accounted for up to one third of total expenses for both strategies. In omnichannel, operations and logistics managers must still ensure the profitability of the online channel if they want to succeed in the grocery business. This framework will help managers identify and estimate the most relevant cost drivers, and to allocate them to the main operational activities.

Strategic Visual Merchandising of New and Open-Box Products: Evidence from Experiment and Retail Data

Retailers are increasingly selling returned products as open-box along with their new product offerings. Whereas some retailers position open-box products side-by-side with their new counterparts in the assortment (i.e., side-by-side strategy), other retailers position them separately in a different part of the retail space/website (i.e., separate strategy). We conduct multimethodology research to investigate the effectiveness of these two visual merchandising strategies. First, using a choice-based conjoint design in a controlled behavioral experiment, we identify how the two strategies affect the perceived value of new products. Next, using proprietary data from a retailer that has implemented both strategies across different stores, we empirically test the impact of each strategy on new product sales and returns under real market conditions. Finally, we extend our empirical analysis to prescribe how retailers can identify the right visual merchandising strategy for a given product profile. Overall, our results reveal a novel trade-off between the two visual merchandising strategies. With respect to retail revenue, the separate strategy outperforms the side-by-side strategy as we find that new product sales are higher with the separate strategy. However, with respect to retail cost, the side-by-side strategy outperforms the separate strategy as we find that new product returns are lower with the side-by-side strategy. Our extended analysis reveals that this tradeoff varies by product profile. Using counterfactual analysis, we further demonstrate that customizing the visual merchandising strategy by product mix could increase profit by 3.2% at the focal retailer. This paper was accepted by Jeannette Song, operations management. Supplemental Material: The data files and online appendices are available at https://doi.org/10.1287/mnsc.2023.4786 .

Pricing Decisions and Game Analysis on Advanced Delivery and Cross-Channel Return in a Dual-Channel Supply Chain System

Advanced delivery and cross-channel return are new phenomena in Omni-channel marketing. This paper studies a dual-channel supply chain system composed of one online retailer, one physical store, and their ordinary manufacturer. It intends to explore the pricing decisions of retailers under four scenarios concerning the question whether deliver goods in advance and use cross-channel return. We analyze the impact of the operation costs of physical stores and the transportation costs of the online retailer on the above strategies, and with numerical examples, analyze the impact of consumers’ perceived value on the profits of each scenario. The results show that the default rate of consumers’ unpaid balance and the cross-channel return rate directly influences the online retailer’s strategy choice. The pricing of the physical store is related to the proportion of unpaid balance and return rate of the online retailer. Customers’ perceived value brought by advanced delivery leads to profit changes in supply chain members and is influenced by the online retailer’s cross-channel return strategy.

Assessing the Social Impact of Corporations: Evidence from Management Control Interventions in the Supply Chain to Increase Worker Wages

ABSTRACTThis study examines an initiative by a large multinational garment retailer (H&M Group) to increase wages at its supplier factories by intervening in their wage‐related management practices. Difference‐in‐differences estimates based on eight years of data from over 1,800 factories show that the interventions were associated with an average real wage increase of approximately 5% by the third year of implementation. Our estimates suggest that the intervention‐associated wage increase was many times greater than if the retailer's cost for the program was instead paid directly to affected workers. We find that the wage effects were driven by factories with relatively poorer supplier ratings and do not find significantly different wage effects depending on the presence of trade unions. We also examine several nonwage outcomes such as factory orders, supplier price competitiveness, overtime pay, and total employment to probe the mechanisms underlying the wage increases. These findings offer new evidence on corporate social impact in global supply chains.

Open-Source Vertical Swinging Wood-Based Solar Photovoltaic Racking Systems

Vertical bifacial solar photovoltaic (PV) racking systems offer the opportunity for large-scale agrivoltaics to be employed at farms producing field crops with conventional farming equipment. Unfortunately, commercial proprietary vertical racks cost more than all types of conventional PV farm racking solutions. To overcome these cost barriers, this study reports on the development of a new wood-based PV racking design. The open-source design consists of a hinge mechanism, which reduces mechanical loading and enables wood to be used as the main structural material, and is the first of its kind. This open-source vertical wood-based PV rack is (i) constructed from locally accessible (domestic) renewable and sustainable materials, (ii) able to be made with hand tools by the average farmer on site, (iii) possesses a 25-year lifetime to match PV warranties, and (iv) is structurally sound, following Canadian building codes to weather high wind speeds and heavy snow loads. The results showed that the capital cost of the racking system is less expensive than the commercial equivalent and all of the previous wood-based rack designs, at a single unit retail cost of CAD 0.21. The racking LCOE is 77% of the cost of an equivalent commercial racking system using retail small-scale component costs, and is 22%, 34%, and 38% less expensive than commercial metal vertical racking, wood fixed tilt racking, and wood seasonal tilt racking costs, respectively. Overall, wooden vertical swinging PV racking provides users with a low-cost, highly available alternative to conventional metal vertical racking, along with a potential increase in energy yield in high wind areas thanks to its unique swinging mechanism.

Firearm Owners' Preferences for Locking Devices: Results of a National Survey.

Firearm Owners' Preferences for Locking Devices: Results of a National Survey.

DB-2-2: STARTING ANTIHYPERTENSIVE TREATMENT WITH COMBINATION THERAPY: CON SIDE OF THE ARGUMENT

The 2018 ESC/ESH and the 2020 ISH guidelines for the management of hypertension proposed that initial combination therapy with two antihypertensive agents in a single-pill combination (SPC) is preferred in most patients in need of blood-pressure (BP) lowering treatment and should replace the long-standing concept of starting treatment with a single agent, rotating through antihypertensive drug classes, and next moving towards combining drug classes. The 2019 Japanese guidelines took a more balanced approach in formulating their recommendation for the use of SPCs. The Japanese document states that when a systolic/diastolic BP decrease of 20/10 mmHg is targeted, combination therapy is an option to be considered in starting treatment. However, the Japanese guideline also recommended that if a drug shows only a weak depressor effect or is poorly tolerated, it must be replaced by another agent with a different mechanism of action, implying that starting with SPCs is not mandatory. By moving SPCs forward as the initial BP lowering strategy, the ESC/ESH and ISH guideline committees overlooked several vested principles in hypertension management: (i) understanding the pathophysiology of hypertension; (ii) prioritizing evidence from randomized clinical trials above observational studies and expert opinion; and (iii) giving consideration to the cost-effectiveness of antihypertensive drug treatment and the sustainability of health care. This article addresses these points. Sources of information included: (i) guidelines issued by European, American, International, British and Japanese Expert Committees, published between 1999 and 2020; (ii) a PubMed search with as terms in the abstract or title hypertension combined with fixed combination OR hypertension combined with single and costs; (iii) the placebo-controlled trials of antihypertensive drug treatment; (iv) three randomized controlled trials of usual versus intensive BP control; and (v) the retail costs of antihypertensive drugs. We propose that starting antihypertensive therapy in treatment-naive hypertensive patients might be based on a few simple principles. First, use antihypertensive drugs with different modes of action. Second, use antihypertensive agents with a long duration of action based on their molecular structure, so-called forgiving drugs, rather than extended-release dosage formulations. Third, titrate each drug to the highest dose that does not produce adverse effects. Fourth, include a thiazide in the drug combination. Finally, once the right combination has been found by rotating through and combining drug classes as well as the timing of dosing, stimulate adherence by reducing the pill load by prescribing of SPCs including 2 or 3 antihypertensive agents in adjustable doses.

Differential Game Analysis of Emission Reduction and Preservation in the Tertiary Food Supply Chain under Different Government Subsidy Models

Climate change has brought about huge environmental problems and economic losses worldwide, and low carbon has become a hot topic of research in the context of the climate crisis. The article outlines a three-tier food supply chain consisting of suppliers, manufacturers and retailers, based on a cooperative model in which manufacturers share the cost of emission reduction and retailers share the cost of freshness. The study finds that when the government grants the maximum amount of subsidies to the manufacturer, the government’s decision to reduce emissions, the government’s regulations to preserve freshness, and the government’s profits are not affected. The study found that when the government awarded the largest subsidy coefficient to manufacturers and the smallest subsidy coefficient to retailers, the non-specific one-off government subsidy model could lead to higher profits for suppliers, manufacturers, and retailers, increasing the amount of emission reduction while improving the preservation quality of food. When the government subsidy factor for manufacturers is minimal, the reduction in emissions is greater under the government’s dedicated abatement subsidy model but does not increase the freshness quality of the food; food supply chain players consistently produce higher levels of preservation effort and preservation quality under the government’s non-dedicated one-off subsidy model.

Integrated Pricing and Inventory Control for Perishable Products, Taking into Account the Lack of Backlog and Inventory Management Policy by the Seller

Abstract Recently, utilizing appropriate inventory control policy and determining the optimal selling price for various goods has been the main topic of scientific and industrial research. Inventory management policy 1 by the seller is one solution that improves the chain’s performance by creating coordination between members of the supply chain. The current study attempts to devise an integrated model of inventory pricing and control under the inventory management policy by the seller for perishable goods with shortages is considered. The purpose of presenting the model is to determine the optimal price, the optimal repayment time, and the order size, in order to maximize the profit. To acquire those optimal values, the profit functions of the buyer and the seller are taken into account. Given the results acquired, it is demonstrated that at any cost, the repayment time is unique and optimal. It is concluded that with the optimal recovery time available, the objective function is a concave function of price, and its optimal value is available. Furthermore, utilizing the inventory management policy by the seller could be a proper means to reducing retailer costs while raising their profit.

Pricing and Return Strategy Selection of Online Retailers Considering Consumer Purchasing Behavior

This article mainly considers the coexistence of physical sales channels and online sales channels. Online retailers with online sales channels consider whether to provide return policies and whether to provide consumers with return insurance. The research established four return strategy models that: do not provide returns; provide returns but do not provide return insurance; provide return insurance, but the cost is borne by online retailers; and provide return insurance, but the cost is borne by consumers. The authors then studied the online retailers’ optimal return and shipping insurance selection strategies. The results show that when the proportion of residual return value after the value reduction of unit returned products was large, online retailers set higher sales prices and provided return policies, while offline retailers needed to reduce sales prices in order to attract more consumers. When the consumer unit product return compensation was relatively large, online retailers chose to provide consumers with free return insurance; otherwise, it was more beneficial for online retailers not to provide return insurance. Further research found that although the cost of online retailers increased when freight insurance was taken, it could better attract consumers, which was more beneficial to online retailers.

Device for Negative Pressure Wound Therapy in Low-Resource Regions: Open-Source Description and Bench Test Evaluation.

Background: Negative (vacuum) pressure therapy promotes wound healing. However, commercially available devices are unaffordable to most potential users in low- and middle-income countries (LMICs), limiting access to many patients who could benefit from this treatment. This study aimed to design and test a cheap and easy-to-build negative pressure device and provide its detailed open-source description, thereby enabling free replication. Methods: the negative pressure device was built using off-the-shelf materials available via e-commerce and was based on a small pump, a pressure transducer, and the simplest Arduino controller with a digital display (total retail cost ≤ 75 US$). The device allows the user to set any therapeutic range of intermittent negative pressure and has two independent safety mechanisms. The performance of the low-cost device was carefully tested on the bench using a phantom wound, producing a realistic exudate flow rate. Results: the device generates the pressure patterns set by the user (25–175 mmHg of vacuum pressure, 0–60 min periods) and can drain exudate flows within the clinical range (up to 1 L/h). Conclusions: a novel, low-cost, easy-to-build negative pressure device for wound healing displays excellent technical performance. The open-source hardware description provided here, which allows for free replication and use in LMICs, will facilitate the application and wider utilization of this therapy to patients.