David Pyke | University of San Diego (original) (raw)

Papers by David Pyke

European Management Journal, 2002

The government of China has decided to privatize many state-owned enterprises (SOEs). Is it wise ... more The government of China has decided to privatize many state-owned enterprises (SOEs). Is it wise to consider investing in these SOEs? What is the level of installed technology, from traditional production planning systems, like MRP, to robotics? How different are SOEs from privately owned firms, joint ventures, and wholly owned foreign subsidiaries? This paper attempts to answer these questions based on a survey of 120 manufacturing firms in the Shanghai area. We report on the status of, and future plans for, manufacturing technology implementation; and we discuss other improvement initiatives. We report on significant differences among ownership types, and yet we discover that the differences among the ownership types are often insignificant.

European Management Journal, 2000

Because of the booming economy, interest in China has soared in recent years. The government has ... more Because of the booming economy, interest in China has soared in recent years. The government has decided to privatize many state-owned enterprises (SOEs), so foreigners can much more easily invest in existing firms than ever before. Is it wise to consider investing in these SOEs? Certainly, many have major problems. How sophisticated are Chinese manufacturing firms? Do they understand modern principles of manufacturing strategy and supply chain management? What is the level of installed technology, from traditional production planning systems, like MRP, to robotics? This paper attempts to answer these questions based on a survey of 100 firms in the Shanghai area. We surveyed state-owned enterprises, collective-owned enterprises and privately held firms, and we discovered some fascinating insights about their differences and their similarities. We discovered that the differences among the ownership types are generally insignificant, suggesting that our results are quite general. We find that these firms are far more advanced using explicit manufacturing strategies than we had expected. However, they are not as advanced in supply chain management as many Western firms. They report significant communication with customers and suppliers-more with customers than suppliers-but the nature of the communication is often limited to one dimension, particularly on the downstream side. Firms that communicate with customers tend to do so with suppliers as well.

Reservoir performance and characterization are vital parameters during the development phase of a... more Reservoir performance and characterization are vital parameters during the development phase of a project. Lnfill drilling of wells on a uniform spacing, without regard to characterization does not optimize development because it fails to account for the complex nature of reservoir heterogeneities present in many low permeability reservoirs, especially carbonate reservoirs. These reservoirs are typically characterized by: q Large, discontinuous pay intervals q Vertical and lateral changes in reservoir properties q Low reservoir energy q High residual oil saturation q Low recovery efficiency The operational problems we encounter in these types of reservoirs include: q Poor or inadequate completions and stimulations q Early water breakthrough q Poor reservoir sweep efficiency in contacting oil throughout the reservoir as well as in the nearby well regions q Channeling of injected fluids due to preferential fracturing caused by excessive injection rates q Limited data availability and poor data quality Infill drilling operations only need target areas of the reservoir which will be economically successful. If the most productive areas of a reservoir can be accurately identified by combining the results of geological, petrophysical, reservoir performance, and pressure transient analyses, then this "integrated" approach can be used to optimize reservoir pertiormance during secondary and tertiary recovery operations without resorting to "blanket" infill drilling methods. New and emerging technologies such as geostatistical modeling, rock typing, and rigorous decline type curve analysis can be used to quanti~reservoir quality and the degree of interwell communication. These results can then be used to develop a 3-D simulation model for prediction of infill locations. The application of reservoir surveillance techniques to identifi additional reservoir "pay" zones, and to monitor pressure and preferential fluid movement in the reservoir is demonstrated. These techniques are: long-term production and injection data analysis, pressure transient analysis, and advanced open and cased hole well log analysis. The major contribution of this project is to demonstrate the use of cost effective reservoir characterization and management tools that will be helpful to both independent and major operators for the optimal development of heterogeneous, low permeability carbonate reservoirs such as the North Robertson (Clearfork) Unit.

SSRN Electronic Journal, 2002

The rise of global markets and increasingly virtual companies has focused management attention on... more The rise of global markets and increasingly virtual companies has focused management attention on competition between supply chains. In this paper, we present a framework for understanding supply chain management, highlighting the impact of integration and globalization.

SSRN Electronic Journal, 2002

Businesses have recently recognized that smarter pricing is often the fastest and easiest way to ... more Businesses have recently recognized that smarter pricing is often the fastest and easiest way to increase profits. Taking better account of their customers' price sensitivities can allow firms to set more advantageous prices and adjust them more dynamically, sometimes even on a customer-by-customer basis. To do this effectively, however, it is vital to take account of the whole pricing picture, not just part of it. This means paying equal attention to two curves: the Willingnessto-Pay curve of the customers and Opportunity Cost curve of the supply chain. Both of these curves have interesting, complex shapes. The goal in pricing is to capture as much as possible of the area between the two.

Supply Chain Management …, 2001

THE PAST YEAR WITNESSED A REMARKABLE INCREASE IN ONLINE SHOPPING. Even the early estimates for on... more THE PAST YEAR WITNESSED A REMARKABLE INCREASE IN ONLINE SHOPPING. Even the early estimates for online spending, which seemed aggressive at the time, have been far exceeded. Yet with all this success, e-tailers in many segments still struggle with order ...

Management Science, 1997

ABSTRACT To reduce lead-time and its variability, modern supply and transportation contracts ofte... more ABSTRACT To reduce lead-time and its variability, modern supply and transportation contracts often specify the frequency of, and volume available for, future deliveries in advance even when final demand is somewhat uncertain (Yano and Gerchak [Yano, C. A., Y. Gerchak. 1989. Transportation contracts and safety stocks for just-in-time deliveries. Manufacturing and Oper. Management 2 314--330.]). We explore the joint optimization of contract parameters and inventory control policy in such environments. We first model and derive the optimal periodic review inventory policy corresponding to a given supply contract, which generates piecewise-linear convex ordering costs. The optimal policy has two critical levels, and there is a range of stock levels for which the quantity ordered equals the contract volume. To numerically compute the critical levels, we model consecutive inventory levels as a Markov Chain, whose steady-state distribution is used to compute the holding, shortage and transportation costs. We then use the resulting total costs to derive the optimal contract volume. Various examples are provided. The optimal contracted delivery frequency can also be computed.

Work Study, 1998

Key Components of Supply Chain Management Supply chain management is an enormous topic covering m... more Key Components of Supply Chain Management Supply chain management is an enormous topic covering multiple disciplines and employing many quantitative and qualitative tools. Within the last few years, several textbooks on supply chain have arrived on the market providing both managerial overviews and detailed technical treatments. For examples of managerial introductions to supply chain see Copacino

Inventory and Production Management in Supply Chains, 2016

Bibliographic data and classifications of all the ERIM reports are also available on the ERIM web... more Bibliographic data and classifications of all the ERIM reports are also available on the ERIM website: www.erim.eur.nl ERASMUS RESEARCH INSTITUTE OF MANAGEMENT REPORT SERIES RESEARCH IN MANAGEMENT

Production and Operations Management, 2009

Recent years have seen advances in research and management practice in the area of pricing, and p... more Recent years have seen advances in research and management practice in the area of pricing, and particularly in dynamic pricing and revenue management. At the same time, researchers and managers have made dramatic improvements in production and supply chain management. The interactions between pricing and production/supply chain performance, however, are not as well understood. Can a firm benefit from knowing the status of the supply chain or production facility when making pricing decisions? How much can be gained if pricing decisions explicitly and optimally account for this status? This paper addresses these questions by examining a make-to-order manufacturer that serves two customer classes-core customers who pay a fixed negotiated price and are guaranteed job acceptance, and "fill-in" customers who make job submittal decisions based on the instantaneous price set by the firm for such orders. We examine four pricing policies that span a range of complexity and required knowledge about the status of the production system at the manufacturer, including the optimal policy of setting a different price for each possible state of the queue. We demonstrate properties of the optimal policy, and we illustrate numerically the financial gains a firm can achieve by following this policy vs. simpler pricing policies. The four policies we consider are (1) state-independent (static) pricing, (2) allowing fill-in orders only when the system is idle, (3) setting a uniform price up to a cutoff state, and (4) general state-dependent pricing. Although general statedependent pricing is optimal in this setting, we find that charging a uniform price up to a cutoff state performs quite well in many settings and presents an attractive trade-off between ease of implementation and profitability. Thus, a fairly simple heuristic policy may actually out-perform the optimal policy when costs of design and implementation are taken into account.

Production and Operations Management, 2009

Operations Research, 2010

We consider a manufacturer of mass-customized modular products who orders components under demand... more We consider a manufacturer of mass-customized modular products who orders components under demand uncertainty, and sets prices, produces to order, and trades excess components in a secondary market after this uncertainty is resolved. The sequence of events reflects, in a parsimonious fashion, the considerable reduction in demand uncertainty between the procurement stage and the selling season, typical of industries with long supply lead times and short product life cycles. We prove that, in contrast to conventional wisdom, the value of production flexibility and expected profit increase with demand correlation if, and only if, commonality between the corresponding products does not exceed a threshold. We also prove that the value of flexibility and expected profit may each increase or decrease with demand variability, depending on demand correlations and component commonalities across the entire product line. Finally, we prove that when demand shocks are independent, the optimal product prices are positively correlated if, and only if, the degree of commonality between the corresponding products exceeds a threshold.

Naval Research Logistics, 1999

A working paper in the INSEAD Working Paper Series is intended as a means whereby a faculty resea... more A working paper in the INSEAD Working Paper Series is intended as a means whereby a faculty researcher's thoughts and findings may be communicated to interested readers. The paper should be considered preliminary in nature and may require revision.

Naval Research Logistics, 1993

With the recent trend toward just-in-time deliveries and reduction of inventories, many firms are... more With the recent trend toward just-in-time deliveries and reduction of inventories, many firms are reexamining their inventory and logistics policies. Some firms have dramatically altered their inventory, production, and shipping policies with the goal of reducing costs and improving service. Part of this restructuring may involve a specific contract with a trucking company, or it may entail establishing in-house shipping capabilities. This restructuring, however, raises new questions regarding the choice of optimal trucking capacity, shipping frequency, and inventory levels. In this study, we examine a two-level distribution system composed of a warehouse and a retailer. We assume that demand at the retailer is random. Since the warehouse has no advance notice of the size of the retailer order, inventory must be held there as well as at the retailer. We examine inventory policies at both the warehouse and the retailer, and we explicitly consider the trucking capacity, and the frequency of deliveries from the warehouse to the retailer. Both linear and concave fixed transportation costs are examined. We find the optimal base stock policies at both locations, the optimal in-house or contracted regular truck capacity, and the optimal review period (or, equivalently, delivery frequency). For the case of normally distributed demand we provide analytical results and numerical examples that yield insight into systems of this type. Some of our results are counterintuitive. For instance, we find some cases in which the optimal truck capacity decreases as the variability of demand increases. In other cases the truck capacity increases with variability of demand.

European Management Journal, 2002

The government of China has decided to privatize many state-owned enterprises (SOEs). Is it wise ... more The government of China has decided to privatize many state-owned enterprises (SOEs). Is it wise to consider investing in these SOEs? What is the level of installed technology, from traditional production planning systems, like MRP, to robotics? How different are SOEs from privately owned firms, joint ventures, and wholly owned foreign subsidiaries? This paper attempts to answer these questions based on a survey of 120 manufacturing firms in the Shanghai area. We report on the status of, and future plans for, manufacturing technology implementation; and we discuss other improvement initiatives. We report on significant differences among ownership types, and yet we discover that the differences among the ownership types are often insignificant.

European Management Journal, 2000

Because of the booming economy, interest in China has soared in recent years. The government has ... more Because of the booming economy, interest in China has soared in recent years. The government has decided to privatize many state-owned enterprises (SOEs), so foreigners can much more easily invest in existing firms than ever before. Is it wise to consider investing in these SOEs? Certainly, many have major problems. How sophisticated are Chinese manufacturing firms? Do they understand modern principles of manufacturing strategy and supply chain management? What is the level of installed technology, from traditional production planning systems, like MRP, to robotics? This paper attempts to answer these questions based on a survey of 100 firms in the Shanghai area. We surveyed state-owned enterprises, collective-owned enterprises and privately held firms, and we discovered some fascinating insights about their differences and their similarities. We discovered that the differences among the ownership types are generally insignificant, suggesting that our results are quite general. We find that these firms are far more advanced using explicit manufacturing strategies than we had expected. However, they are not as advanced in supply chain management as many Western firms. They report significant communication with customers and suppliers-more with customers than suppliers-but the nature of the communication is often limited to one dimension, particularly on the downstream side. Firms that communicate with customers tend to do so with suppliers as well.

Reservoir performance and characterization are vital parameters during the development phase of a... more Reservoir performance and characterization are vital parameters during the development phase of a project. Lnfill drilling of wells on a uniform spacing, without regard to characterization does not optimize development because it fails to account for the complex nature of reservoir heterogeneities present in many low permeability reservoirs, especially carbonate reservoirs. These reservoirs are typically characterized by: q Large, discontinuous pay intervals q Vertical and lateral changes in reservoir properties q Low reservoir energy q High residual oil saturation q Low recovery efficiency The operational problems we encounter in these types of reservoirs include: q Poor or inadequate completions and stimulations q Early water breakthrough q Poor reservoir sweep efficiency in contacting oil throughout the reservoir as well as in the nearby well regions q Channeling of injected fluids due to preferential fracturing caused by excessive injection rates q Limited data availability and poor data quality Infill drilling operations only need target areas of the reservoir which will be economically successful. If the most productive areas of a reservoir can be accurately identified by combining the results of geological, petrophysical, reservoir performance, and pressure transient analyses, then this "integrated" approach can be used to optimize reservoir pertiormance during secondary and tertiary recovery operations without resorting to "blanket" infill drilling methods. New and emerging technologies such as geostatistical modeling, rock typing, and rigorous decline type curve analysis can be used to quanti~reservoir quality and the degree of interwell communication. These results can then be used to develop a 3-D simulation model for prediction of infill locations. The application of reservoir surveillance techniques to identifi additional reservoir "pay" zones, and to monitor pressure and preferential fluid movement in the reservoir is demonstrated. These techniques are: long-term production and injection data analysis, pressure transient analysis, and advanced open and cased hole well log analysis. The major contribution of this project is to demonstrate the use of cost effective reservoir characterization and management tools that will be helpful to both independent and major operators for the optimal development of heterogeneous, low permeability carbonate reservoirs such as the North Robertson (Clearfork) Unit.

SSRN Electronic Journal, 2002

The rise of global markets and increasingly virtual companies has focused management attention on... more The rise of global markets and increasingly virtual companies has focused management attention on competition between supply chains. In this paper, we present a framework for understanding supply chain management, highlighting the impact of integration and globalization.

SSRN Electronic Journal, 2002

Businesses have recently recognized that smarter pricing is often the fastest and easiest way to ... more Businesses have recently recognized that smarter pricing is often the fastest and easiest way to increase profits. Taking better account of their customers' price sensitivities can allow firms to set more advantageous prices and adjust them more dynamically, sometimes even on a customer-by-customer basis. To do this effectively, however, it is vital to take account of the whole pricing picture, not just part of it. This means paying equal attention to two curves: the Willingnessto-Pay curve of the customers and Opportunity Cost curve of the supply chain. Both of these curves have interesting, complex shapes. The goal in pricing is to capture as much as possible of the area between the two.

Supply Chain Management …, 2001

THE PAST YEAR WITNESSED A REMARKABLE INCREASE IN ONLINE SHOPPING. Even the early estimates for on... more THE PAST YEAR WITNESSED A REMARKABLE INCREASE IN ONLINE SHOPPING. Even the early estimates for online spending, which seemed aggressive at the time, have been far exceeded. Yet with all this success, e-tailers in many segments still struggle with order ...

Management Science, 1997

ABSTRACT To reduce lead-time and its variability, modern supply and transportation contracts ofte... more ABSTRACT To reduce lead-time and its variability, modern supply and transportation contracts often specify the frequency of, and volume available for, future deliveries in advance even when final demand is somewhat uncertain (Yano and Gerchak [Yano, C. A., Y. Gerchak. 1989. Transportation contracts and safety stocks for just-in-time deliveries. Manufacturing and Oper. Management 2 314--330.]). We explore the joint optimization of contract parameters and inventory control policy in such environments. We first model and derive the optimal periodic review inventory policy corresponding to a given supply contract, which generates piecewise-linear convex ordering costs. The optimal policy has two critical levels, and there is a range of stock levels for which the quantity ordered equals the contract volume. To numerically compute the critical levels, we model consecutive inventory levels as a Markov Chain, whose steady-state distribution is used to compute the holding, shortage and transportation costs. We then use the resulting total costs to derive the optimal contract volume. Various examples are provided. The optimal contracted delivery frequency can also be computed.

Work Study, 1998

Key Components of Supply Chain Management Supply chain management is an enormous topic covering m... more Key Components of Supply Chain Management Supply chain management is an enormous topic covering multiple disciplines and employing many quantitative and qualitative tools. Within the last few years, several textbooks on supply chain have arrived on the market providing both managerial overviews and detailed technical treatments. For examples of managerial introductions to supply chain see Copacino

Inventory and Production Management in Supply Chains, 2016

Bibliographic data and classifications of all the ERIM reports are also available on the ERIM web... more Bibliographic data and classifications of all the ERIM reports are also available on the ERIM website: www.erim.eur.nl ERASMUS RESEARCH INSTITUTE OF MANAGEMENT REPORT SERIES RESEARCH IN MANAGEMENT

Production and Operations Management, 2009

Recent years have seen advances in research and management practice in the area of pricing, and p... more Recent years have seen advances in research and management practice in the area of pricing, and particularly in dynamic pricing and revenue management. At the same time, researchers and managers have made dramatic improvements in production and supply chain management. The interactions between pricing and production/supply chain performance, however, are not as well understood. Can a firm benefit from knowing the status of the supply chain or production facility when making pricing decisions? How much can be gained if pricing decisions explicitly and optimally account for this status? This paper addresses these questions by examining a make-to-order manufacturer that serves two customer classes-core customers who pay a fixed negotiated price and are guaranteed job acceptance, and "fill-in" customers who make job submittal decisions based on the instantaneous price set by the firm for such orders. We examine four pricing policies that span a range of complexity and required knowledge about the status of the production system at the manufacturer, including the optimal policy of setting a different price for each possible state of the queue. We demonstrate properties of the optimal policy, and we illustrate numerically the financial gains a firm can achieve by following this policy vs. simpler pricing policies. The four policies we consider are (1) state-independent (static) pricing, (2) allowing fill-in orders only when the system is idle, (3) setting a uniform price up to a cutoff state, and (4) general state-dependent pricing. Although general statedependent pricing is optimal in this setting, we find that charging a uniform price up to a cutoff state performs quite well in many settings and presents an attractive trade-off between ease of implementation and profitability. Thus, a fairly simple heuristic policy may actually out-perform the optimal policy when costs of design and implementation are taken into account.

Production and Operations Management, 2009

Operations Research, 2010

We consider a manufacturer of mass-customized modular products who orders components under demand... more We consider a manufacturer of mass-customized modular products who orders components under demand uncertainty, and sets prices, produces to order, and trades excess components in a secondary market after this uncertainty is resolved. The sequence of events reflects, in a parsimonious fashion, the considerable reduction in demand uncertainty between the procurement stage and the selling season, typical of industries with long supply lead times and short product life cycles. We prove that, in contrast to conventional wisdom, the value of production flexibility and expected profit increase with demand correlation if, and only if, commonality between the corresponding products does not exceed a threshold. We also prove that the value of flexibility and expected profit may each increase or decrease with demand variability, depending on demand correlations and component commonalities across the entire product line. Finally, we prove that when demand shocks are independent, the optimal product prices are positively correlated if, and only if, the degree of commonality between the corresponding products exceeds a threshold.

Naval Research Logistics, 1999

A working paper in the INSEAD Working Paper Series is intended as a means whereby a faculty resea... more A working paper in the INSEAD Working Paper Series is intended as a means whereby a faculty researcher's thoughts and findings may be communicated to interested readers. The paper should be considered preliminary in nature and may require revision.

Naval Research Logistics, 1993

With the recent trend toward just-in-time deliveries and reduction of inventories, many firms are... more With the recent trend toward just-in-time deliveries and reduction of inventories, many firms are reexamining their inventory and logistics policies. Some firms have dramatically altered their inventory, production, and shipping policies with the goal of reducing costs and improving service. Part of this restructuring may involve a specific contract with a trucking company, or it may entail establishing in-house shipping capabilities. This restructuring, however, raises new questions regarding the choice of optimal trucking capacity, shipping frequency, and inventory levels. In this study, we examine a two-level distribution system composed of a warehouse and a retailer. We assume that demand at the retailer is random. Since the warehouse has no advance notice of the size of the retailer order, inventory must be held there as well as at the retailer. We examine inventory policies at both the warehouse and the retailer, and we explicitly consider the trucking capacity, and the frequency of deliveries from the warehouse to the retailer. Both linear and concave fixed transportation costs are examined. We find the optimal base stock policies at both locations, the optimal in-house or contracted regular truck capacity, and the optimal review period (or, equivalently, delivery frequency). For the case of normally distributed demand we provide analytical results and numerical examples that yield insight into systems of this type. Some of our results are counterintuitive. For instance, we find some cases in which the optimal truck capacity decreases as the variability of demand increases. In other cases the truck capacity increases with variability of demand.