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Fuqiang Zhang

Bio: Fuqiang Zhang is an academic researcher from Washington University in St. Louis. The author has contributed to research in topics: Supply chain & Information sharing. The author has an hindex of 30, co-authored 68 publications receiving 4665 citations. Previous affiliations of Fuqiang Zhang include National University of Singapore & University of Washington.


Papers
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Journal ArticleDOI
01 Dec 2000-Energy
TL;DR: Index decomposition methodology was a technique first used in the late 1970s to study the impact of changes in product mix on industrial energy demand and has been increasingly used in energy-related environmental analysis.

1,187 citations

Journal ArticleDOI
01 Jun 1998-Energy
TL;DR: A decomposition method for factorizing changes in energy demand or gas emissions over time with the advantage of giving perfect decomposition is introduced and may be generally applied in energy and environmental decomposition studies.

682 citations

Journal ArticleDOI
TL;DR: In this article, the impact of strategic customer behavior on supply chain performance is studied, where the seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is realized.
Abstract: This paper studies the impact of strategic customer behavior on supply chain performance. We start with a newsvendor seller facing forward-looking customers. The seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is realized. Customers anticipate future sales and choose purchase timing to maximize their expected surplus. We characterize the rational expectations equilibrium, where we find that the seller's stocking level is lower than that in the classic model without strategic customers. We show that the seller's profit can be improved by promising either that quantities available will be limited (quantity commitment) or that prices will be kept high (price commitment). In most cases, both forms of commitment are not credible in a centralized supply chain with a single seller. However, decentralized supply chains can use contractual arrangements as indirect commitment devices to attain the desired outcomes with commitment. Decentra...

384 citations

Journal ArticleDOI
TL;DR: This paper identifies a procurement mechanism that minimizes the buyers total cost (procurement plus operating) and identifies several simpler mechanisms that are quite attractive along all relevant dimensions: buyers performance, supply chain performance, simplicity, and robustness to renegotiation.
Abstract: This paper studies a queuing model in which a buyer sources a good or service from a single supplier chosen from a pool of suppliers. The buyer seeks to minimize the sum of her procurement and operating costs, the latter of which depends on the suppliers lead time. The selected supplier can regulate his lead time, but faster lead times are costly. Although the buyer selects the supplier to source from (possibly via an auction) and dictates the contractual terms, the buyers bargaining power is limited by asymmetric information: The buyer only has an estimate of the suppliers costs, while the suppliers know their costs precisely. We identify a procurement mechanism that minimizes the buyers total cost (procurement plus operating). This mechanism is not simple: It is a numerically derived nonlinear menu of contracts. Therefore, we study several simpler mechanisms: e.g., one that charges a late fee and one that specifies a fixed lead-time requirement (no menus, no nonlinear functions). We find that simple mechanisms are nearly optimal (generally within 1 of optimal) because asymmetric information conveys significant protection to the supplier, i.e., the supplier is able to retain most of the benefit of having a lower cost. Renegotiation is another concern with the optimal mechanism: Because it does not minimize the supply chains cost, the firms can be both better off if they throw away the contract and start over. Interestingly, we find that the potential gain from renegotiation is relatively small with either the optimal or our simple mechanisms. We conclude that our simple mechanisms are quite attractive along all relevant dimensions: buyers performance, supply chain performance, simplicity, and robustness to renegotiation.

227 citations

Journal ArticleDOI
TL;DR: In this article, the impact of strategic customer behavior on supply chain performance was studied and it was shown that decentralized supply chains can use contractual arrangements as indirect commitment devices to attain the desired outcomes with commitment.
Abstract: This paper studies the impact of strategic customer behavior on supply chain performance. We start with a newsvendor seller facing forward-looking customers. The seller initially charges a regular price but may salvage the leftover inventory at a lower salvage price after random demand is realized. Customers anticipate future sales and choose purchase timing to maximize their expected surplus. We characterize the rational expectations (RE) equilibrium, where we find that the seller's stocking level is lower than that in the classic model without strategic customers. We show that the seller's profit can be improved by promising that: either quantities available will be limited (quantity commitment) or prices will be kept high (price commitment). In most cases, both forms of commitment are not credible in a centralized supply chain with a single seller. However, decentralized supply chains can use contractual arrangements as indirect commitment devices to attain the desired outcomes with commitment. While decentralization has generally been associated with coordination problems, we present the contrasting view that disparate interests within a supply chain can actually improve overall supply chain performance. In particular, with strategic customer behavior, we find that: (i) a decentralized supply chain with a wholesale price contract may perform strictly better than a centralized supply chain; (ii) contracts widely studied in the supply chain coordination literature (e.g., markdown money, sales rebates, and buyback contracts) can serve as a commitment device as well as an incentive-coordinating device; and (iii) some of the above contracts cannot allocate profits arbitrarily between supply chain members due to strategic customer behavior.

213 citations


Cited by
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Journal Article
TL;DR: The World is Flat: A Brief History of the Twenty-First Century Thomas L. Friedman Farrar, Straus and Giroux, 2005 Thomas Friedman is a widely-acclaimed journalist, foreign affairs columnist for the New York Times, and author of four best-selling books that include From Beirut to Jerusalem (1989) as mentioned in this paper.
Abstract: The World is Flat: A Brief History of the Twenty-First Century Thomas L. Friedman Farrar, Straus and Giroux, 2005 Thomas Friedman is a widely-acclaimed journalist, foreign affairs columnist for the New York Times, and author of four best-selling books that include From Beirut to Jerusalem (1989). His eminence as a journalist is clearly demonstrated in the way he prepared for The World is Flat. He traveled throughout the world, interviewing in depth the political and business leaders who have the most direct, hands-on knowledge of the truly incredible developments occurring in the business structures and technology of globalization. Only a journalist who moves freely at the highest levels could interview the likes of Sir John Rose, the chief executive of Rolls-Royce; Nobuyuki Idei, the chairman of Sony; Richard Koo, the chief economist for the Nomura Research Institute; Bill Gates of Microsoft; Wee Theng Tan, the president of Intel China; David Baltimore, president of Caltech; Howard Schultz, founder and chairman of Starbucks; Nandan Nilekani, CEO of Infosys in Bangalore - and many others, each of whom gave him the inside story of how, specifically, the barriers of time and space separating economies, workforces, sources of capital, and technical abilities are crumbling. The result of this unfolding story, already far along but with much farther to go, according to Friedman, is that "the world is flat." With some notable exceptions in sub-Saharan Africa and the Islamic swathe, everything is connected with everything else on a horizontal basis, with distance and erstwhile time-lags no longer mattering. Friedman describes in detail the galloping globalization that has unfolded in even so limited a time as the past five years. Under the impetus of a worldwide network of interconnectivity, the world economy is much-changed from what it was at the turn of the century a mere half-decade ago. Friedman quotes the CEO of India's Infosys: "What happened over the last [few] years is that there was a massive investment in technology, especially in the bubble era, when hundreds of millions of dollars were invested in putting broadband connectivity around the world, undersea cables," while (Friedman paraphrases him) "computers became cheaper and dispersed all over the world, and there was an explosion of software - e-mail, search engines like Google, and proprietary software that can chop up any piece of work and send one part to Boston, one part to Bangalore, and one part to Beijing...." Microprocessors today have 410 million transistors compared to the 2800 they had in 1971. And now, "wireless is what will allow you to take everything that has been digitized, made virtual and personal, and do it from anywhere." The effect on productivity is revolutionary: "It now takes Boeing eleven days to build a 737, down from twenty-eight days just a few years ago. Boeing will build the next generation of planes in three days, because all the parts are computer-designed for assembly." The most strikingly informative aspect of this book, however, is not about technology. Most especially, Friedman explores the rapidly evolving global business systems, each constantly regenerating itself to keep ahead of the others. These are systems that span the continents seeking the lowest-cost providers of everything from expert scientific and engineering work to the lowliest grunt work. Friedman points out that India produces 70,000 accounting graduates each year - and that they are willing to start at $100 a month. It is no wonder that Boeing employs 800 Russian scientists and engineers for passenger-plane design when "a U.S. aeronautical engineer costs $120 per design hour, a Russian costs about one-third of that." Friedman describes a call center in India where outbound callers sell "everything from credit cards to phone minutes," while operators taking inbound calls do "everything from tracing lost luggage for U.S. and European airline passengers to solving computer problems for confused American consumers. …

1,639 citations

Journal ArticleDOI
TL;DR: There is a need to have a common understanding among practitioners and consistency on the choice of decomposition methods in empirical studies, and to address the above-mentioned issues and provide recommendations.

1,487 citations

Journal ArticleDOI
TL;DR: In this paper, the authors compared various index decomposition analysis methods and concluded that the logarithmic mean divisia index method is the preferred method for most potential users, providing a practical guide that includes the general formulation process, summary tables for easy reference and examples.

1,201 citations