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Analysis of monitoring and limiting of commercial cheating: a newsvendor model

Analysis of monitoring and limiting of commercial cheating: a newsvendor model
Analysis of monitoring and limiting of commercial cheating: a newsvendor model
Commercial cheating, that is, counterfeit products and lower quality products sold as genuine products, exists extensively in many countries of the world, especially in the developing countries. In this paper, we investigate the phenomena of commercial cheating, study the optimal cheating actions of inventory managers under a monitoring and limiting regime from the industrial administration office (IAO for short) and demonstrate the efficiency of monitoring and limiting such cheating activities. A newsvendor model has been considered for the inventory manager to order different quality products with different set-up costs. The model, a kind of extension of the general newsvendor problem, is viewed as a shocked inventory model. We analyse some properties of the optimal cheating policies from the point of view of an inventory manager, and investigate the effectiveness of both the punishment level and the checking rate.
inventory, counterfeit, optimal policy, checking rate
0160-5682
844-854
Liu, K.
8920189d-4350-4129-8a4e-453ceb9de412
Li, J-A.
4f8a4476-ffc1-4634-b325-834bc0bba9f0
Wu, Y.
84854e37-ada6-4cc8-995f-6ce5ebc77423
Lai, K.K.
20379c9f-ac5f-4549-ab91-77722180b971
Liu, K.
8920189d-4350-4129-8a4e-453ceb9de412
Li, J-A.
4f8a4476-ffc1-4634-b325-834bc0bba9f0
Wu, Y.
84854e37-ada6-4cc8-995f-6ce5ebc77423
Lai, K.K.
20379c9f-ac5f-4549-ab91-77722180b971

Liu, K., Li, J-A., Wu, Y. and Lai, K.K. (2005) Analysis of monitoring and limiting of commercial cheating: a newsvendor model. Journal of the Operational Research Society, 56 (7), 844-854. (doi:10.1057/palgrave.jors.2601913).

Record type: Article

Abstract

Commercial cheating, that is, counterfeit products and lower quality products sold as genuine products, exists extensively in many countries of the world, especially in the developing countries. In this paper, we investigate the phenomena of commercial cheating, study the optimal cheating actions of inventory managers under a monitoring and limiting regime from the industrial administration office (IAO for short) and demonstrate the efficiency of monitoring and limiting such cheating activities. A newsvendor model has been considered for the inventory manager to order different quality products with different set-up costs. The model, a kind of extension of the general newsvendor problem, is viewed as a shocked inventory model. We analyse some properties of the optimal cheating policies from the point of view of an inventory manager, and investigate the effectiveness of both the punishment level and the checking rate.

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Published date: 2005
Keywords: inventory, counterfeit, optimal policy, checking rate

Identifiers

Local EPrints ID: 36516
URI: http://eprints.soton.ac.uk/id/eprint/36516
ISSN: 0160-5682
PURE UUID: 8bcb527d-3e82-440b-b0ba-73a11dbb35a6

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Date deposited: 22 May 2006
Last modified: 15 Jul 2019 19:04

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Contributors

Author: K. Liu
Author: J-A. Li
Author: Y. Wu
Author: K.K. Lai

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