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Full-Text Articles in Business
The Impact Of Budget Constraints On Flexible Vs. Dedicated Technology Choice, Onur Boyabatli, Tiecheng Leng, L. Beril Toktay
The Impact Of Budget Constraints On Flexible Vs. Dedicated Technology Choice, Onur Boyabatli, Tiecheng Leng, L. Beril Toktay
Research Collection Lee Kong Chian School Of Business
This paper studies the flexible versus dedicated technology choice and capacity investment decisions of a multiproduct firm under demand uncertainty in the presence of budget constraints. The firm operates under a capital budget for financing the capacity investment, and an operating budget, which is uncertain in the capacity investment stage, for financing the production. We investigate how the tightening of the capital budget and a lower financial flexibility in the production stage (the likelihood of having a sufficient operating budget) shape the optimal technology choice. We find that the dominant regime is one where dedicated technology should be adopted for …
Supply Management In Multiproduct Firms With Fixed Proportions Technology, Onur Boyabatli
Supply Management In Multiproduct Firms With Fixed Proportions Technology, Onur Boyabatli
Research Collection Lee Kong Chian School Of Business
This paper studies the supply management of a primary input, where this input gives rise to multiple products in fixed proportions. My objective is twofold. First, I study fixed proportions technology under demand uncertainty in comparison with flexible and the dedicated technologies. I show that fixed proportions technology has a cost- pooling value over dedicated technology, which is larger than the capacity-pooling value of flexible technology over dedicated technology. I identify the critical role that demand correlation plays with the fixed proportions technology: In contrast to the capacitypooling value which decreases in demand correlation, the cost-pooling value increases in demand …
Stochastic Capacity Investment And Flexible Vs. Dedicated Technology Choice In Imperfect Capital Markets, Onur Boyabatli, L. Bertil Toktay
Stochastic Capacity Investment And Flexible Vs. Dedicated Technology Choice In Imperfect Capital Markets, Onur Boyabatli, L. Bertil Toktay
Research Collection Lee Kong Chian School Of Business
This paper analyzes the impact of endogenous credit terms under capital market imperfections in a capacity investment setting. We model a monopolist firm that decides on its technology choice (flexible versus dedicated) and capacity level under demand uncertainty. Differing from the majority of the stochastic capacity investment literature, we assume that the firm is budget constrained and can relax its budget constraint by borrowing from a creditor. The creditor offers technology-specific loan contracts to the firm, after which the firm makes its technology choice and subsequent decisions. Capital market imperfections impose financing frictions on the firm. Our analysis contributes to …
Technical Appendix To "Stochastic Capacity Investment And Flexible Vs. Dedicated Technology Choice In Imperfect Capital Markets", Onur Boyabatli
Technical Appendix To "Stochastic Capacity Investment And Flexible Vs. Dedicated Technology Choice In Imperfect Capital Markets", Onur Boyabatli
Research Collection Lee Kong Chian School Of Business
Technical appendix with proofs for the technical statements in the article: Stochastic capacity investment and flexible vs. dedicated technology choice in imperfect capital markets. (2011). Management Science, 57 (12), 2163 - 2179. https://doi.org/10.1287/mnsc.1110.1395
Interaction Of Technology Choice And Financial Risk Management Under Costly External Financing, Onur Boyabatli, L. Beril Toktay
Interaction Of Technology Choice And Financial Risk Management Under Costly External Financing, Onur Boyabatli, L. Beril Toktay
Research Collection Lee Kong Chian School Of Business
This paper analyzes the integrated operational and financial risk management portfolio of a firm that determines whether to use flexible or dedicated technology and whether to undertake financial risk management or not. The risk management value of flexible technology is due to its risk pooling benefit under demand uncertainty. The financial risk management motivation comes from the existence of deadweight costs of external financing due to capital market imperfections. Financial risk management has a fixed cost, while technology investment incurs both fixed and variable costs. The firm's limited budget, which depends partly on a tradable asset, can be increased by …
Flexibility: The Next Competitive Battle: The Manufacturing Futures Survey, Arnoud De Meyer, Jinichiro Nakane, Jeffrey M. Miller, Kasra Ferdows
Flexibility: The Next Competitive Battle: The Manufacturing Futures Survey, Arnoud De Meyer, Jinichiro Nakane, Jeffrey M. Miller, Kasra Ferdows
Research Collection Lee Kong Chian School Of Business
Over the past 4 years research teams from INSEAD (Fontainebleau), Boston University and Waseda University (Tokyo) have administered a yearly survey on the manufacturing strategy of the large manufacturers of the three industrialized regions of the world. In this paper the results for the 1986 survey are compared. One of the most striking results of that year’s survey is the emphasis some of the more advanced manufacturers put on their efforts to overcome the trade-off between flexibility and cost efficiency. In particular for the Japanese respondents these attempts become clear. Europeans and North Americans are not yet seizing the opportunity …
European Manufacturing: A Comparative Study (1985), Arnoud De Meyer
European Manufacturing: A Comparative Study (1985), Arnoud De Meyer
Research Collection Lee Kong Chian School Of Business
One of the striking events of the eighties in the field of management is the increase in attention paid to the role of manufacturing and technology in the determination of a firm’s competitive position. Traditionally, corporate policy and strategic decisions were defined on the basis of a financial and marketing analysis of the company’s strengths, weaknesses and competitive environment. The contribution of the technology function and more in particular the production and operations function was often limited to implementation and a marginal adaptation of a course set by financial and marketing considerations. Some of the world’s excellent competitors have, however, …