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Pay for What You Get: Putting Performance-based Contracting to the Test

thumbnail Every company wants to improve the efficiency and cost-effectiveness of its supply chain, but what's the best way? Since 2004, the United States Defense Department has required its suppliers to adopt performance-based contracting so that it pays them a fee based on the amount of time big-ticket items like F-22 fighter jets are in use without requiring repairs. But is that better value than more traditional contracts that charge customers for time and materials when products break down? According to a new study co-authored by Wharton researchers, the answer is yes.
From: October 14, 2009

Rethinking the Long Tail Theory: How to Define 'Hits' and 'Niches'

thumbnail The Long Tail theory suggests that the Internet drives demand away from hit products with mass appeal, and directs that demand to more obscure niche offerings. Yet a new research paper by Wharton professor Serguei Netessine and doctoral student Tom F. Tan challenges that theory using data from the movie rental company Netflix.
From: September 16, 2009

The Economic Incentives of the 'Store-within-a-Store' Retail Model

thumbnail The sign above the entrance may say Macy's, Nordstrom or Neiman Marcus, but the salespeople at the cosmetics counters inside do not work for the store at all. Instead, they are employed by brand name cosmetics manufacturers which lease space from the marquee retailers. In an arrangement that is common in stores across Asia and in other parts of the world, U.S. department store retailers often cede the cosmetics category to branded manufacturers in return for fees paid to occupy prime retail real estate. New Wharton research looks into the dynamics of this model.
From: September 02, 2009

Raising the Bar: Can China Meet the Quality Challenge?

thumbnail After being stung by consumer backlash and stiffer penalties for piracy, counterfeiting and contamination, China is working hard to overcome its reputation for poor quality. Many experts see quality issues as the simple growing pains of an accelerating economy. After all, China already makes high-quality products such as iPods. The challenge today for foreign partners: How to set and enforce effective quality benchmarks.
From: June 03, 2009

Chinese Manufacturing in an Age of Resource Price Volatility

thumbnail China is slowly moving away from energy subsidy policies that hold down prices -- especially for industry. Those subsidies protected exporters from devastation when energy prices shot up to record-setting levels in 2008 and helped to keep social unrest somewhat under wraps. No one knows for sure how far China will go in reducing energy subsidies for business in the future, but China could use subsidy policies as a tool in pushing particular industries away from low-value exports that generate a lot of waste to higher-value goods that produce less waste.
From: June 03, 2009
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