Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price

Mingming LENG; Rafael BECERRIL-ARREOLA; Mahmut PARLAR; Mark FERGUSON

doi:10.1287/msom.2023.0223

Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price

Mingming LENG^*, Rafael BECERRIL-ARREOLA, Mahmut PARLAR, Mark FERGUSON

^*Corresponding author for this work

FACULTY OF BUSINESS

Research output: Journal Publications › Journal Article (refereed) › peer-review

Abstract

Problem definition: We investigate how the characteristics of consumers and a service firm influence the firm’s optimal pricing and promised delivery-time decisions as well as the optimal investment in the quality of delivery reliability information available to consumers.

Methodology/results: We use utility, queuing, and choice modeling theories to model consumers’ behavior and to find solutions to the firm’s profit maximization problem.

Managerial implications: The optimal strategy is to disclose either error-free delivery reliability information or no information at all. We also delineate conditions for each of the two strategies to dominate.

Original language	English
Pages (from-to)	1918-1924
Number of pages	7
Journal	Manufacturing and Service Operations Management
Volume	26
Issue number	5
Early online date	15 Jul 2024
DOIs	https://doi.org/10.1287/msom.2023.0223
Publication status	Published - Sept 2024

Bibliographical note

The authors are grateful to the Department Editor (Professor Mahesh Na?garajan), the Associate Editor, and two anonymous reviewers for their insightful comments that helped improve this paper.

Funding

This research was supported by the General Research Fund (GRF) of the Hong Kong Research Grants Council under Research Project No. LU13500822.

Keywords

service operations
delivery time
pricing
information disclosure
online retailing

Access to Document

10.1287/msom.2023.0223

Cite this

@article{e52d3c149d4c46d28a9a402dfa9e2eeb,

title = "Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price",

abstract = "Problem definition: We investigate how the characteristics of consumers and a service firm influence the firm{\textquoteright}s optimal pricing and promised delivery-time decisions as well as the optimal investment in the quality of delivery reliability information available to consumers. Methodology/results: We use utility, queuing, and choice modeling theories to model consumers{\textquoteright} behavior and to find solutions to the firm{\textquoteright}s profit maximization problem. Managerial implications: The optimal strategy is to disclose either error-free delivery reliability information or no information at all. We also delineate conditions for each of the two strategies to dominate.",

keywords = "service operations, delivery time, pricing, information disclosure, online retailing",

author = "Mingming LENG and Rafael BECERRIL-ARREOLA and Mahmut PARLAR and Mark FERGUSON",

note = "The authors are grateful to the Department Editor (Professor Mahesh Na?garajan), the Associate Editor, and two anonymous reviewers for their insightful comments that helped improve this paper.",

year = "2024",

month = sep,

doi = "10.1287/msom.2023.0223",

language = "English",

volume = "26",

pages = "1918--1924",

journal = "Manufacturing and Service Operations Management",

issn = "1523-4614",

publisher = "INFORMS Institute for Operations Research and the Management Sciences",

number = "5",

}

Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price. / LENG, Mingming; BECERRIL-ARREOLA, Rafael; PARLAR, Mahmut et al.
In: Manufacturing and Service Operations Management, Vol. 26, No. 5, 09.2024, p. 1918-1924.

Research output: Journal Publications › Journal Article (refereed) › peer-review

TY - JOUR

T1 - Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price

AU - LENG, Mingming

AU - BECERRIL-ARREOLA, Rafael

AU - PARLAR, Mahmut

AU - FERGUSON, Mark

N1 - The authors are grateful to the Department Editor (Professor Mahesh Na?garajan), the Associate Editor, and two anonymous reviewers for their insightful comments that helped improve this paper.

PY - 2024/9

Y1 - 2024/9

N2 - Problem definition: We investigate how the characteristics of consumers and a service firm influence the firm’s optimal pricing and promised delivery-time decisions as well as the optimal investment in the quality of delivery reliability information available to consumers. Methodology/results: We use utility, queuing, and choice modeling theories to model consumers’ behavior and to find solutions to the firm’s profit maximization problem. Managerial implications: The optimal strategy is to disclose either error-free delivery reliability information or no information at all. We also delineate conditions for each of the two strategies to dominate.

AB - Problem definition: We investigate how the characteristics of consumers and a service firm influence the firm’s optimal pricing and promised delivery-time decisions as well as the optimal investment in the quality of delivery reliability information available to consumers. Methodology/results: We use utility, queuing, and choice modeling theories to model consumers’ behavior and to find solutions to the firm’s profit maximization problem. Managerial implications: The optimal strategy is to disclose either error-free delivery reliability information or no information at all. We also delineate conditions for each of the two strategies to dominate.

KW - service operations

KW - delivery time

KW - pricing

KW - information disclosure

KW - online retailing

UR - http://www.scopus.com/inward/record.url?scp=85204770302&partnerID=8YFLogxK

U2 - 10.1287/msom.2023.0223

DO - 10.1287/msom.2023.0223

M3 - Journal Article (refereed)

AN - SCOPUS:85204770302

SN - 1523-4614

VL - 26

SP - 1918

EP - 1924

JO - Manufacturing and Service Operations Management

JF - Manufacturing and Service Operations Management

IS - 5

ER -

Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price

Abstract

Bibliographical note

Funding

Keywords

Access to Document

Other files and links

Fingerprint

Should Delivery-Time Ratings be Disclosed in Online Markets? Optimal Pricing and Promised Delivery Time Decisions with Theoretical Models Supported by Empirical Data

Cite this

Disclosing Delivery Performance Information When Consumers Are Sensitive to Promised Delivery Time, Delivery Reliability, and Price

Abstract

Bibliographical note

Funding

Keywords

Access to Document

Other files and links

Fingerprint

Projects

Should Delivery-Time Ratings be Disclosed in Online Markets? Optimal Pricing and Promised Delivery Time Decisions with Theoretical Models Supported by Empirical Data

Cite this