Organizational Unit:
Scheller College of Business

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Essays on environmentally responsible operations

2017-07-24 , Fu, Wayne

This thesis consists of three essays. The study in the first essay empirically examines the effect of hazardous substance rankings on reductions in emissions. Drawing data from the biennial Substance Priority List from the US Agency for Toxic Substances and Disease Registry and the Toxics Release Inventory from the US EPA and employing a panel model with fixed effects to control for various factors, the study finds that public information dissemination on the relative hazards of chemicals is effective, as indicated by the significant associations between increases in the relative assessed hazard levels of chemicals and greater subsequent emissions reductions, as well as the greater use of source reduction. As for the implications of operational leanness, the study finds that it may limit the ability of facilities to reduce emissions in response to in-creases in relative assessed hazard level. The study in the second essay analytically examines a durable-goods producer’s warranty-length decision in the presence of a secondary market. The study constructed a durable-goods model that captures the value-added by offering longer warranties in the context of a product with finite reliability and the implications of the presence of a secondary market. The model also incorporates the producer’s economic incentive to interfere with the secondary market through a buy-back program. The analytical results indicate that with respect to the reliability of used products, the benefit of offering longer warranties is non-monotonic in the presence of secondary markets. Also, secondary market interference significantly influences producers' warranty-length decisions. That is, in addition to the conventional wisdom that producers benefit from longer warranties when product reliability is a concern, producers engaging in secondary market interference may find that offering longer warranties is more profitable when used products are sufficiently reliable. The study in the third essay empirically tests predicted relationships from the previous essay. Linking secondary data from various sources regarding the US automobile market and applying the exploratory factor analysis and the panel data analysis, the study finds support for a U-shaped relationship between automobile producers' warranty lengths and their used-vehicle reliability. Specifically, automobile producers offer longer non-power-train warranties when the reliability of used vehicles is near an extreme, either low or high. In addition, producers' buy-back activities decrease with the reliability of used vehicles, and that the trade volume in the secondary market increases with the used-vehicle reliability.

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Primary and secondary market strategies for regulatory compliance and profit

2016-08-03 , Huang, Ximin

Incorporating sustainability into operational strategies has gained tremendous momentum among firms. An important driver is the need to comply with environmental legislation that grows in both coverage and stringency. Moreover, many firms also come to recognize the value of establishing sustainable operations to enhance profitability, especially with its potential to be scaled up by the rapidly increasing volume of production and end-of-life products. In this dissertation, I study firms' sustainable operational strategies either for complying with legislation or for improving profitability. In the first essay (Chapter II), I point out that, although largely overlooked by the literature, increasing product durability can be utilized, in addition to recyclability, as a design lever when a durable product producer is imposed with the responsibility of end-of-life product management. The analysis reveals that when trade-off between the two design options exists, legislation can lead to surprising design outcomes. The second essay (Chapter III) studies the strategies of Testing and Remanufacturing as instruments for a durable product manufacturer to tackle the lemons problem. The lemons problem arises in secondary markets as the sellers, being the original owners of the used products, take advantage of the superior quality information to strategically sell the low-quality items to the secondary markets while keeping the high-quality ones. This study reveals the unexplored functionalities of conducting testing and remanufacturing in resolving the lemons problem, which take effects through enabling the manufacturer a stronger control over the secondary markets. The third essay (Chapter IV) builds upon these insights and proposes a framework to empirically study the effectiveness of the Testing and Remanufacturing strategies in dealing with the lemons problem in the used automobile markets.

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Operational challenges of strategy execution

2014-06-11 , Kovach, Jeremy J.

Operations management studies the process of transforming material, labor, energy, or ideas into goods or services. Operations strategy outlines how firms leverage their capabilities to achieve competitive advantage. While developing or possessing these capabilities is paramount, they must be successfully leveraged to yield competitive advantage. This thesis comprises three essays which consider how firms can successfully implement their operations strategy, specifically within the context of supply chain management, remanufacturing, and project execution. The first essay (Chapter 2) empirically investigates the performance benefits of operational slack and operational scope in dynamic environments. We investigate how contingent investments in operational slack and operational scope moderate the relationship between unstable and unpredictable markets on firm performance. The second essay (Chapter 3) considers how a firm's organizational structure and incentives influence its decision to participate in remanufacturing. Through a principal-agent structure, we determine the optimal sales agent commission structures and product portfolio of new and remanufactured product for the firm. The third essay (Chapter 4) considers the challenges of executing strategic initiatives. We recognize the dual role of performance metrics, they communicate the target outcomes (i.e., what types of project outcomes are sought), and at the same time they incentivize the organizational impetus (i.e., effort commitment) from the stakeholders. Using a game theoretic model, we investigate the implications of the target outcome (focused or flexible definition of success) and project uncertainty, which are dependent on the organizational structure of the firm.