Corbett > Abstracts

Stringency, Governance, Media Coverage and Diffusion of Environmental and Social Labeling Schemes. P. Castka, C.J. Corbett. October 2012.

The increased focus on social and environmental issues has led to a range of product and process innovations, often accompanied by a label to inform consumers of the relevant practices. The diffusion of these labeling schemes or "ecolabels" such as FSC, USDA Organic or FairTrade has been widespread, though adoption of individual labels has varied widely. We examine how diffusion of ecolabels depends on their stringency, their governance practices, and the way they are portrayed in the media, using data on 40 labels from 67 experts and 3043 media articles. We find that accreditation of verifiers is the only practice that predicts overall quality of governance; that better-governed labels are more widely adopted but that more stringent labels within our sample are not less widely adopted; that open and consensusbased standard-setting is associated with more favorable media coverage; and that more favorable coverage does not contribute to wider adoption.

Investment in Energy Efficiency by Small and Medium-Sized Firms: An Empirical Analysis of the Adoption of Process Improvement Recommendations. S. Muthulingam, C.J. Corbett, S. Benartzi, B. Oppenheim. September 2011.

We investigate the adoption of energy efficiency initiatives using information on over 100,000 recommendations provided to more than 13,000 small and medium sized firms under the Industrial Assessment Centers (IAC) program of the US Department of Energy (DOE). We build on an earlier study by Anderson and Newell (2004) that explored the impact of economic factors on the adoption of energy efficiency initiatives, by investigating the role of behavioral factors on the adoption of energy efficiency initiatives. Using a probit instrumental variable model, we investigate three behavioral factors that could affect investment in energy efficiency. First, we find that adoption of a recommendation depends not only on its characteristics but also on the order in which the recommendations are presented. Adoption rates are higher for initiatives appearing early in a list of recommendations. We find evidence that this may in part be due to anchoring effects. Second, we find that adoption is not influenced by the number of options provided to decision makers. Third, we find that adoption is higher for recommendations that need lower managerial effort. Additionally, we identify conditions under which these behavioral factors are mitigated. We draw implications for enhancing adoption of energy efficiency initiatives and for other decision contexts where a collection of process improvement recommendations are made to firms.

Adoption of Voluntary Environmental Standards: The Role of Signaling and Intrinsic Benefits in the Diffusion of the LEED Green Building Standards. C.J. Corbett, S. Muthulingam. August 2007.

We examine the role of signaling and of intrinsic benefits in the adoption of the individual elements of the voluntary LEED (Leadership in Energy and Environmental Design) standards for green buildings. We use goodness-of-fit tests on data for all 442 LEED certified buildings and find that neither signaling nor pursuit of intrinsic benefits can independently explain the observed adoption pattern, but that a combination of the two factors can. We also find tentative evidence that the adoption decision is made sequentially: organizations first choose a level of certification (consistent with signaling), and then choose how many LEED elements to adopt given their chosen level of certification (consistent with pursuing intrinsic benefits). We relate our findings to some open questions in the literature on diffusion of technology and draw implications for the design and the future development of similar voluntary standards and eco-labels.

Entrepreneurs and Newsvendors: Do Small Businesses Follow the Newsvendor Logic When Making Inventory Decisions? C.J. Corbett, J.C. Fransoo. August 2007.

This work empirically assesses the degree to which inventory decisions made by entrepreneurs and small businesses are informed by the logic underlying the newsvendor or base stock model and are influenced by the decision-maker’s risk profile. We used a web- and email-based survey, combined with a telephone follow-up to elicit risk profiles, obtaining 51 usable responses. Our findings suggest that entrepreneurs do follow the newsvendor logic, but more so for high-margin than for best-selling products. We find that entrepreneurs’ risk profiles are consistent with a key prediction from prospect theory, displaying risk aversion for profits and risk-seeking behavior for losses. Furthermore, we find that risk aversion for profits is associated with higher safety stocks, in contradiction to existing theory, and discuss several possible explanations for this finding.

Cournot Competition under Yield Uncertainty: The Case of the U.S. Influenza Vaccine Market. S. Deo, C.J. Corbett. Manufacturing and Service Operations Management. 11(4): 563-576. Fall 2009.

This paper is inspired by the recurring mismatch between demand and supply in the U.S. influenza vaccine market. Economic theory predicts that an oligopolistic market with unregulated but costly entry will experience excess entry and oversupply, not the undersupply observed in the market for influenza vaccine in recent years. In this paper, we examine the interaction between yield uncertainty, a key characteristic of many production processes, including that for influenza vaccine, and firms’ strategic behavior. We find that yield uncertainty can contribute to a high degree of concentration in an industry and a reduction in the industry output and the expected consumer surplus in equilibrium. We use parameter values loosely based on the U.S. influenza vaccine market to numerically illustrate the impact of yield uncertainty.

Coordination and Incentive Contracts in Project Management under Asymmetric Information. M. Bayiz, C.J. Corbett. December 2005.

We study the problem of the manager of a project consisting of two sub-projects or tasks which are outsourced to different subcontractors. The project manager earns more revenue from the project if it is completed faster, but he cannot observe how hard subcontractors work, only the stochastic duration of their tasks. We derive the optimal linear incentive contracts to to the subcontractors when the tasks are conducted in series or in parallel. We compare them to the fixed-price contracts often encountered in practice, and discuss when incentive contracts lead to bigger performance improvement. We characterize how the incentive contracts vary with the subcontractors’ risk aversion and cost of effort, the marginal effect of subcontractor effort, and the variability of task durations. We find that this dependence is sometimes counter-intuitive in nature. For instance, for parallel tasks, if the first agent’s task is on the critical path and his variability increases, the project manager should induce the first agent to work less hard and the second agent to work harder.

A Spatio-Temporal Analysis of the Global Diffusion of ISO 9000 and ISO 14000 Certification. P. Albuquerque, B.J. Bronnenberg, C.J. Corbett. Management Science. 53(3): 451-468. March 2007.

We study the global diffusion of ISO 9000 and ISO 14000 certification using a network diffusion framework. We start by investigating the presence and nature of contagion effects by defining alternative cross-country networks and testing their relative strength. Second, we study how the rate of diffusion differs between the two standards and between early- and later-adopting countries. Third, we identify which countries had more influence on diffusion than others. Empirically, we build a diffusion model which includes several possible crosscountry contagion effects and then use Bayesian methods for estimation and model selection. Using country by year data for 56 countries and nine years, we find that accounting for cross-country influences improves both the fit and the prediction accuracy of our models. However, the specific cross-country contagion mechanism is different across the two standards. Diffusion of ISO 9000 is driven primarily by geography and bilateral trade relations, whereas that of ISO14000 is driven primarily by geography and cultural similarity. We also find that the diffusion rate of ISOstandar ds is higher for later-adopting countries and for the later ISO 14000 standard. We discuss several implications of our findings for the global diffusion of management standards.

Mass Customization versus Mass Production: Variety and Price Competition. A. Alptekinoglu, C.J. Corbett. November 2005.

We study competition between two multi-product firms with distinct production technologies in a market where customers have heterogeneous preferences on a single taste attribute. The mass customizer (MC) has a perfectly flexible production technology, thus can any variety within a product space, represented by Hotelling’s (1929) linear city. The mass producer (MP) has a more focused production technology, and therefore, it offers a finite set of products in the same space. MP can invest in more flexible technology, which reduces its cost of variety and hence allows it to offer a larger set of products; in the extreme, MP can emulate MC’s technology and offer infinite variety. The firms simultaneously decide whether to enter the market, and MP chooses its degree of product-mix flexibility upon entry. Next, MP designs its product line, i.e., the number and position of its products; MC’s perfectly flexible technology makes this unnecessary. Finally, both firms simultaneously set prices. We analyze the sub-game perfect Nash equilibrium in this three-stage game, allowing firm-specific fixed and variable costs that together characterize their production technology. We find that an MP facing competition from an MC offers lower product variety compared to an MP monopolist, in order to reduce the intensity of price competition. We also find that MP can survive this competition even if it has higher fixed cost of production technology or higher marginal cost of production or both.

Extending the Horizons: Environmental Excellence as Key to Improving Operations. C.J. Corbett, R.D. Klassen. Manufacturing & Service Operations Management. 8(1): 5-22. Winter 2006.

The view that adopting an environmental perspective on operations can lead to improved operations is in itself not novel; phrases such as "lean is green" are increasingly commonplace. The implication is that any operational system that has minimized inefficiencies is also more environmentally sustainable. However, in this paper we argue that the underlying mechanism is one of extending the horizons of analysis and that this applies to both theory and practice of operations management. We illustrate this through two principal areas of lean operations, where we identify how successive extensions of the prevailing research horizon in each area have led to major advances in theory and practice. First, in quality management, the initial emphasis on statistical quality control of individual operations was extended through total quality management to include a broader process encompassing customer requirements and suppliers’ operations. More recently, the environmental perspective extended the definition of customers to stakeholders and defects to any form of waste. Second, in supply chain management, the horizon first expanded from the initial focus on optimizing inventory control with a single planner to including multiple organizations with conflicting objectives and private information. The environmental perspective draws attention to aspects such as reverse flows and end-of-life product disposal, again potentially improving the performance of the overall supply chain. In both cases, these developments were initially driven by practice, where many of the benefits of adopting an environmental perspective were unexpected. Given that these unexpected side benefits seem to recur so frequently, we refer to this phenomenon as the "law of the expected unexpected side benefits." We conclude by extrapolating from the developmental paths of total quality management and supply chain management to speculate about the future of environmental research in operations management.

Global Diffusion of ISO 9000 Certification through Supply Chains. C.J. Corbett. Manufacturing and Service Operations Management. 8(4): 330-350. Fall 2006.

The ISO 9000 series of quality management systems standards is widely diffused, with more than 560,000 sites certified in 152 countries as of December 2003. Anecdotal evidence suggests that global supply chains contributed to this diffusion, in the following sense. Firms in Europe were the first to seek ISO 9000 certification in large numbers. They then required their suppliers, including those abroad, to do likewise. Once the standard had thus entered other countries, it spread beyond those firms immediately exporting to Europe to be adopted by many other firms in those same countries. This paper empirically examines the validity of this view of the role of supply chains in global diffusion of ISO 9000. To do so, we decompose the statement "supply chains contributed to the global diffusion of ISO 9000" into a series of four requirements that must be met for the original statement to be supported. We then use firm-level data from a global survey of more than 5,000 firms in nine countries to test the hypotheses that correspond to these requirements. Our findings are consistent with the view that part of the global diffusion of ISO 9000 did move upstream in global supply chains. In short, this means that firms that export goods or services to a particular country may simultaneously be importing that country's management practices. We conclude by suggesting how these findings might form the basis for future research on the environmental management systems standard ISO 14000.

A Generalization of the Inventory Pooling Effect to Non-Normal Dependent Demand. C.J.Corbett, K. Rajaram. Manufacturing and Service Operations Management. 8(4): 351-358. Fall 2006.

Eppen (1979) showed that inventory costs in a centralized system increase with the correlation between multivariate normal product demands. Using multivariate stochastic orders, we generalize this statement to arbitrary distributions. We then describe methods to construct models with arbitrary dependence structure, using the copula of a multivariate distribution to capture the dependence between the components of a random vector. For broad classes of distributions with arbitrary marginals, we confirm that centralization or pooling of inventories is more valuable when demands are less positively dependent.

The Financial Impact Of ISO 9000 Certification: An Empirical Analysis. C.J. Corbett, M.J. Montes-Sancho, D.A. Kirsch. Management Science. 51(7): 1046-1059. July 2005.

The ISO 9000 series of quality management systems standards, introduced in 1986, has been adopted at over 560,000 locations worldwide. Anecdotal evidence suggests that firms can achieve internal benefits such as quality or productivity improvements, or that certification can help firms maintain or increase their market share, or both. Others argue that the standard is too generic to cause performance improvement, but can be seen as a signal of good management. In this paper, we track financial performance from 1987 to 1997 of all publicly traded ISO 9000 certified manufacturing firms in the US with SIC codes 2000-3999, and test whether ISO 9000 certification leads to productivity improvements, market benefits, and improved financial performance. We employ event study methods, matching each certified firm to a control group of one or more non-certified firms in the same industry with similar pre-certification size and/or return on assets. We find that firms’ decision to seek their first ISO 9000 certification was indeed followed by significant abnormal improvements in financial performance, though the exact timing and magnitude of this effect depend on the specification of the control group. Three years after certification, the certified firms do display strongly significant abnormal performance under all control group specifications. The degree to which the precise results vary across control group specifications indicates that event studies should always include extensive sensitivity analysis, for instance matching by size and performance separately and jointly, using both single firms and portfolios as controls.

The Value Of SKU Rationalization In Practice: The Pooling Effect Under Suboptimal Inventory Policies And Non-Normal Demand. J.A. Alfaro, C.J. Corbett. Production and Operations Management. 12(1): 12-29. Spring 2003.

Several approaches to the widely recognized challenge of managing product variety rely on the pooling effect. Pooling can be accomplished through the reduction of number of products or stock keeping units (SKUs), through postponement of differentiation, or in other ways. These approaches are well-known and becoming widely applied in practice. However, theoretical analyses of the pooling effect assume an optimal inventory policy before and after pooling, and, in most cases, that demand is normally distributed. In this paper we address the effect of non-optimal inventory policies and the effect of non-normally distributed demand on the value of pooling. First, we show that there is always a range of current inventory levels within which pooling is better and beyond which optimizing inventory policy is better. We also find that the value of pooling may be negative when the inventory policy in use is suboptimal. Second, we use extensive Monte Carlo simulation to examine the value of pooling for non-normal demand distributions. We find that the value of pooling varies relatively little across the distributions we used, but that it varies significantly with the concentration of uncertainty. We also find that the ranges within which pooling is preferred over optimizing inventory policy are generally quite wide but vary significantly across distributions. Third, we use a set of real (and highly erratic) demand data to analyze the benefits of pooling under optimal and suboptimal policies and non-normal demand with a high number of SKUs. With our specific but highly non-normal demand data, we find that pooling is beneficial and robust to suboptimal policies. Altogether, this paper provides deeper theoretical, numerical and empirical understanding of the value of pooling.

Designing Supply Contracts: Contract Type And Information Asymmetry. C.J. Corbett, D. Zhou, C.S. Tang. Management Science. 50(4): 550-559. April 2004.

This paper studies the value to a supplier of obtaining better information about a buyer's cost structure, and of being able to offer more general contracts. We use the bilateral monopoly setting to analyze six scenarios: three increasingly general contracts (wholesale-pricing schemes, two-part linear schemes, and two-part nonlinear schemes), each under full and incomplete information about the buyer's cost structure. We allow both sides to refuse to trade by explicitly including reservation profit levels for both; for the supplier, this is implemented through a cutoff policy. We derive the supplier's optimal contracts and profits for all six scenarios and examine the value of information and of more general contracts. Our key findings are as follows: First, the value of information is higher under two-part contracts; second, the value of offering two-part contracts is higher under full information; and third, the proportion of buyers the supplier will choose to exclude can be substantial.

Optimal Shared Savings Contracts In Supply Chains: Linear Contract And Double Moral Hazard. C.J. Corbett, G.A. DeCroix, A.Y. Ha. European Journal of Operational Research. 163: 653-667. 2005.

In many supply chains consumption of indirect materials, sold by a supplier to a customer for use in her production process, can be reduced by efforts exerted by either party. Since traditional supply contracts provide no incentive for the supplier to exert such effort, shared-savings contracts have been proposed as a way to improve incentives in the channel, leading to more efficient effort choices by the two parties. Such shared-savings contracts typically combine a fixed service fee with a variable component based on consumption volume. We formalize this situation using the double moral hazard framework, in which both parties decide how much effort to exert by trading off the cost of their effort against the benefits that they will obtain from reduced consumption. We also extend the double moral hazard framework to analyze a broader class of cost-of-effort functions than considered so far, including the linear cost-of-effort functions commonly found in practice. We show that the supplier can still always induce the optimal second best equilibrium with a linear shared-savings contract. Under this broader class of functions, however, the behavior of the optimal contract as a function of the problem parameters becomes more complex. We illustrate how small changes in the problem parameters can turn profits from being a well-behaved to a poorly-behaved function of the contract, and provide some theoretical characterization of this phenomenon. The practical significance of this is that simple (linear) contracts are sufficient in many double moral hazard contexts, even for the broader class of functions we consider, but care must be taken in selecting the optimal contract parameters.

Achieving Environmental and Productivity Improvements through Model Based Process Redesign. K. Rajaram, C.J. Corbett. Operations Research. 50(5): 751-763. September-October 2002.

Large-scale industrial production processes face increasingly tight environmental constraints, which can be addressed through costly but relatively simple end-of-pipe solutions, or through cheaper but more subtle pollution prevention approaches. Achieving the process improvements necessary for pollution prevention is challenging due to the complexity of these processes. We propose an iterative procedure to achieve process improvements through model-based process redesign. This procedure is based on successive convex approximations of the process performance model, where product flows and process settings are optimized for a given configuration and the solution and dual variables of this optimization problem are used to update the process configuration. We implemented this procedure over a five-year period at Cerestar, a major European wheat starch extraction process, which led to a dramatic simplification in process configuration. Reduced energy and water consumption led to an estimated $3 million annual cost savings. Moreover, the reduction in environmental impacts allowed Cerestar to maintain current production levels without investing $100 million in additional wastewater treatment capacity to comply with new environmental constraints.

Evaluating Environmental Performance Using Statistical Process Control Techniques. C.J. Corbett, J. Pan. European Journal of Operational Research. 139(1): 68-83. 2002.

This paper builds on recent work on measuring and evaluating environmental performance of a process using statistical process control (SPC) techniques. We propose the CUSUM chart as a tool to monitor emissions data so that abnormal changes can be detected in a timely manner, and we propose using process capability indices to evaluate environmental performance in terms of the risk of non-compliance situations arising. In doing so, the paper fills an important gap in the ISO 14000 and TQEM literatures, which have focused more on environmental management systems and qualitative aspects rather than on quantitative tools. We explore how process capability indices have the potential to be useful as a risk management tool for practitioners and to help regulators execute and prioritize their enforcement efforts. Together, this should help in setting up useful guidelines for evaluating actual environmental performance against the firm's environmental objectives and targets and regulatory requirements, as well as encouraging further development and application of SPC techniques to the field of environmental quality management and data analysis.

ISO 14001: Irrelevant Or Invaluable? C.J. Corbett, M.V. Russo. ISO Management Systems. Special Issue: The Impact of ISO 14001. December 2001.

"ISO 14000 is a business issue, not a purely environmental one..." wrote Charles Corbett and co-author David Kirsch in the seminal article, "ISO 14000: an agnostic's report from the front line", which was published in the March-April 2000 issue of ISO 9000 + ISO 14000 News (now relaunched as ISO Management Systems). That does not detract from the fact that ISO 14000 is also very much an environmental standard. To put it bluntly, unless implementing an environmental management system based on ISO 14001helps an organization to reduce the bad effects its business activities might be having on the environment, then the standard is not much use. This is the central issue that Charles Corbett and Michael Russo - both professors in US business schools - address in the present article. Using original data from the US and from an ongoing international survey, they seek to answer the question as to whether an ISO 14001 certificate is mere window-dressing, or a pointer to concrete results in environmental performance.

International Diffusion Of ISO 14000 Certification. C.J. Corbett, D.A. Kirsch. Production and Operations Management. 10(3): 327-342. Fall 2001.

The ISO 9000 series of quality management systems standards and the more recent ISO 14000 environmental management systems standards have generated much controversy among practitioners. Although ISO 9000 has become a de facto requirement for many firms, its effects are poorly understood, and similarly the value and domain of applicability of ISO 14000 have been questioned. This paper reports on an exploratory study into the global spread of ISO 14000. The fact that ISO 9000 appears as an important factor explaining diffusion of ISO 14000 certifications suggests that the drivers behind the two have significant overlap. This indicates that, although ISO 14000 is an environmental standard, many of the factors driving national certification patterns are not at all environmental in nature, and that ISO 14000 therefore needs to be studied from a broader perspective than from a purely environmental point of view.

Stochastic Inventory Systems In A Supply Chain With Asymmetric Information: Cycle Stocks, Safety Stocks, and Consignment Stock. C.J. Corbett. Operations Research. 49(4): 487-500. July-August 2001.

The two critical factors distinguishing inventory management in a multifirm supply-chain context from the more traditional centrally planned perspective are incentive conflicts and information asymmetries. We study the well-known order quantity/reorder point (Q, r) model in a two-player context, using a framework inspired by observations during a case study. We show how traditional allocations of decision rights to supplier and buyer lead to inefficient outcomes, and we use principal-agent models to study the effects of information asymmetries about setup cost and backorder cost, respectively.

Competition And Structure In Serial Supply Chains With Deterministic Demand. C.J. Corbett, U.S. Karmarkar. Management Science. 47(7): 966-978. July 2001.

Supply chains often consist of several tiers, with different numbers of firms competing at each tier. A major determinant of the structure of supply chains is the cost structure associated with the underlying manufacturing process. In this paper, the impact of fixed and variable costs on the structure and competitiveness of supply chains with a serial structure and price-sensitive linear deterministic demand is examined. The entry stage is modeled as a simultaneous game, where the players take the outcomes of the subsequent post-entry competition into account in making their entry decisions. Altogether, this paper provides a framework for comparing a variety of supply-chain structures and for studying how they are affected by costs structures and by the number of entrants throughout the chain.

Shared Savings Contracts For Indirect Materials In Supply Chains: Channel Profits And Environmental Impacts. C.J. Corbett, G.A. DeCroix. Management Science. 47(7): 881-893. July 2001.

For "indirect" materials, an inescapable incentive conflict exists: The buyer wishes to minimize consumption of these indirect materials, while the supplier's profits depend on increasing volume. Both buyer and seller can exert effort to reduce consumption, hence making the overall supply chain more efficient. However, no supplier will voluntarily participate unless contract terms are fundamentally revised. This can be done through a variety of "shared-savings" contracts, where both parties profit from a consumption reduction. This paper analyzes several such contracts currently in use for chemicals purchasing. It is shown that such contracts can always increase supply-chain profits but need not lead to reduced consumption. It is found that the goals of maximizing joint profits and minimizing consumption are generally not aligned.

A Supplier's Optimal Quantity Discount Policy Under Asymmetric Information. C.J. Corbett, X. de Groote. Management Science. 46(3): 444-450. March 2000.

In the supply chain literature, an increasing body of work studies how suppliers can use incentive schemes such as quantity discounts to influence buyers' order behavior, thus reducing the supplier's (and the total supply chain's) costs. Various functional forms for such incentive schemes have been proposed, but a critical assumption always made is that the supplier has full information about the buyer's cost structure. The optimal quantity discount policy is derived under asymmetric information, and it is compared to the situation where the supplier has full information.

ISO 14000: An Agnostic's Report From The Frontline. C.J. Corbett, D.A. Kirsch. ISO 9000 & ISO 14000 News. 9(2): 4-17. 2000.

Three years after the official release of the first ISO 14000 environmental management systems standards, well over 10,000 organizations worldwide have already achieved certification to ISO 14001, a total which is increasing rapidly. By comparison, ISO 9000, the quality management predecessor to ISO 14000, was officially released 13 years ago and has since attracted over 300,000 registrations worldwide. By almost ever measure, the USA is lagging behind in ISO 14000 certification: in GDP-adjusted terms, the US is sandwiched between considerably less developed economies like Ecuador and Pakistan, as well behind Egypt and Slovenia. The question is - as the manager of a US-based firm, should you care? If your company is operating smoothly and profitably, in compliance with all local and national environmental laws - admittedly some of the most aggressive and progressive anywhere - why would that not be enough? What do you really need to know about ISO 14000? In this article, we most definitely do not intend to argue against, or in favor of ISO 14000 certification; instead, we provide "an agnostic’s report from the front line," based upon interviews with numerous companies, auditors, government bodies and other parties across the world. We provide a framework for thinking about ISO 14000, rather than a list of simple justifications for or against seeking certification. To do so, we review five common misconceptions about ISO 14000, explore the evidentiary basis for these "myths," and suggest possible directions in which ISO 14000 might evolve. Throughout, we emphasize the operational and strategic impacts of ISO 14000 more than the environmental ones.

Partnerships To Improve Supply Chains. C.J. Corbett, J.D. Blackburn, L.N. Van Wassenhove. Sloan Management Review. 40(4): 71-82. Summer 1999.

The open exchange of information and coordinated decision-making typical of a long-term supply-chain partnership can reduce the inefficiencies inherent in less collaborative relationships, such as excess inventories and slow response. Different from strategic alliances or project-based partnerships, supply-chain partnerships are characterized by level of investment that further improve the joint supply chain to mutual advantage. Two joint supply-chain improvement projects are described, one of which led to logistics benefits and helped reverse a traditionally adversarial relationship that, in turn translated into commercial benefits. The 2nd project held the potential to quickly deliver logistics benefits, yet did not yield the expected commercial value. In contrasting the 2 projects, the authors identify key steps to take when beginning joint supply-chain improvement projects.

Cooperation Between Strands Of Practice: Challenges And Opportunities For The Renewal of OR. W.J.A.M. Overmeer, C.J. Corbett, L.N. Van Wassenhove. Journal of the Operational Research Society. 49: 369-380. April 1998.

The open exchange of information and coordinated decision-making typical of a long-term supply-chain partnership can reduce the inefficiencies inherent in less collaborative relationships, such as excess inventories and slow response. Different from strategic alliances or project-based partnerships, supply-chain partnerships are characterized by level of investment that further improve the joint supply chain to mutual advantage. Two joint supply-chain improvement projects are described, one of which led to logistics benefits and helped reverse a traditionally adversarial relationship that, in turn translated into commercial benefits. The 2nd project held the potential to quickly deliver logistics benefits, yet did not yield the expected commercial value. In contrasting the 2 projects, the authors identify key steps to take when beginning joint supply-chain improvement projects.

Intractable Problems In Discussing OR Practice At A Scientific Conference: Reflections On A Panel Discussion At EURO XIV. W.J.A.M. Overmeer, C.J. Corbett, M. Salomon. European Journal of Operational Research. 99(1): 197-206. May 16, 1997.

Panel sessions on OR practice are a common event at conferences, but they often do not seem to lead to productive discussions or to generate new ideas. Reasons why this happens are identified, based on experiences with a semi-plenary panel session on the challenges of practicing OR, organized during the EURO XIV Conference in Jerusalem in July 1995. This session left those polled at the end with a sense of hopelessness about such discussions. The session is analyzed using a taxonomy of the 15 issues addressed, almost all of which have been raised (many times) before. Together they form a complex collection of interdependent issues, which can be boiled down to some long-standing dilemmas in the field of OR. It is argued that much of the disappointment voiced about the session stems from its remaining at the level of individual issues and failing to address the underlying dilemmas.

An Efficient Budget Allocation Policy For Decentralization Of Responsibility For Site Decontamination Projects. C.J. Corbett, F.J.C. Debets, L.N. Van Wassenhove. Environmental and Resource Economics. 7: 287-305. 1996.

Selection and execution of site decontamination projects is often best left to local authorities, in accordance with the subsidiarity principle, even though the budget for such projects is made available through a central authority. In this paper we suggest a practical budget allocation policy that a central authority can employ to allocate budgets to local authorities, while still optimizing the central authority's environmental objective function. The procedure is fully consistent with the principle of decentralization of responsibility for selection and execution of projects, and requires a minimum information exchange between local and central levels. Despite the information asymmetry between local and central levels, incentive compatibility problems can be (partially) prevented by choosing an appropriate evaluation mechanism. At the same time, the procedure is computationally effective and efficient, and can guarantee a fair budget allocation, making it easy to implement and politically acceptable.

Strands Of Practice In OR (The Practitioner's Dilemma). C.J. Corbett, W.J.A.M. Overmeer, L.N. Van Wassenhove. European Journal of Operational Research. 87(3): 484-499. December 1995.

A first step towards a different way of looking at the practice of OR is presented, with implications for practitioners and researchers alike. Two key observations are made: (1) Looking at how OR practitioners perform individual projects will not lead to a full understanding of how OR practitioners perform individual projects. Instead, one has to take into account the series of preceding projects by that same practitioner, to infer and understand his strand of practice. (2) A practitioner's strand of practice is developed as a result of a learning process. Therefore, operationalizeable guidelines about how to perform OR projects will have to include an indication of the strand of practice for which they are valid. The observations are based on an exploratory series of interviews with practitioners and their clients.

Decentralization of Responsibility for Site Decontamination Projects: A Budget Allocation Approach. C.J. Corbett, F.J.C. Debets, L.N. Wan Wassenhove. European Journal of Operational Research. 86(1): 103-119. October 1995.

A major problem currently confronting central governments is how to optimally allocate resources for contamination of polluted sites. "Optimally" here refers to obtaining maximum environmental benefits with the limited resources available. An important issue in budget allocation is that of decentralization, given the magnitude of the information flows between regional and central level necessary in a fully centralized approach. The use of mathematical programming models to support allocation procedures to obtain maximum environmental effectiveness and economic efficiency is investigated. The situation where regional authorities provide limited, summary information to the central government, which then allocated budgets, is considered. The central government aims to maximize total environmental benefits, subject to a central budget constraint (and constraints on other resources.) The problem can be formulated as a mixed integer programming problem, but the size of the problem precludes the search for optimal solutions.