My team and I have just had our research accepted into the International Journal of Production Economics after several rigorous reviews and revisions – published as Wood, Wang, Olesen, and Reiners (2017). The article is titled: The effect of slack, diversification, and time to recall on stock market reaction to toy recalls
In this work, we used event study methodology, which has been used in the Operations Management literature to study demand-supply mismatches (Hendricks & Singhal, 2009), medical device recalls (Thirumalai & Sinha, 2011), product introduction delays (Hendricks & Singhal, 2008), and food recalls (Salin & Hooker, 2001) among other topics. The calculations gave us an abnormal return value for each event that we then used in a cross-sectional regression to test a series of hypotheses that relate to the operational decisions that managers can make. Specifically, we were looking at geographic and business diversification; financial, inventory, and capacity slack; how long a product is on the market for before it is recalled; and whether reactions to the recalls change appreciably over time.
Past toy recalls have led to an increase in consumer concerns while toy manufacturers and retailers increasingly outsource and create longer supply chains, making it more challenging for them to ensure toy safety. This article examines firms making toy recall announcements to assess the impact operational characteristics have on the negative stock market reaction to the announcement. 135 toy recall announcements in the U.S. from 1979 to 2016 were analyzed using event study and cross-sectional regression. While a toy recall announcement results in a negative stock market reaction, our results show that greater levels of business diversification, inventory slack, and a longer time to recall are all associated with a less negative stock market reaction. In contrast, greater capacity slack is associated with a more negative stock market reaction. We find no evidence that geographic diversification or financial slack influences the stock market reaction, nor have reactions changed appreciably over time. This article contributes to the product harm and product recall literature by focusing on these operational elements. Managers should be aware of the benefits of greater slack and business diversification while planning their business, and the impact of a longer time to recall.
Hendricks, K. B., & Singhal, V. R. (2009). Demand-supply mismatches and stock market reaction: Evidence from excess inventory announcements. Manufacturing & Service Operations Management, 11(3), 509–524. https://doi.org/10.1287/msom.1080.0237
Thirumalai, S., & Sinha, K. K. (2011). Product recalls in the medical device industry: An empirical exploration of the sources and financial consequences. Management Science, 57(2), 376–392. https://doi.org/10.1287/mnsc.1100.1267
Big congratulations to the University of Auckland Business School students who have completed their work for the Summer Scholarships (giving them the chance to work with faculty members over the summer on some research projects). I was fortunate enough to supervise a project with Rikki Smith, who did an outstanding job on the project and displayed a high level of initiative and aptitude in her research work.
A couple of weeks ago, one of my students completed his oral examination, where he did a great job defending his research and work that he completed as part of his PhD. Congratulations – Linh Duong!
Linh has worked hard over several years on his project, entitled: A Multi-criteria Continuous Review Inventory Management System for Perishable & Substitutable Products.
This research is particularly interesting for those folk that manage perishable goods, whether these goods are foodstuffs or pharmaceuticals. A key element of the work was the inclusion of substitutability — a really important concept in contemporary business practice, where consumers are happy or willing to buy a substitute product if their preferred product is not in stock. The practical impact, from the perspective of those managing replenishment, is that ‘normal’ consumption of a product can be boosted if there is additional consumption driven by the substitution effect.
We had an enjoyable examination process. As usual, the Postgraduate Centre staff did a fantastic job setting everything up and ensuring that the process was seamless. The convenor walked us through the process earlier and did a great job during the examination itself. The oral examiners asked a range of interesting questions on a range of factors and issues in the thesis. Linh did a great job of addressing the questions and adding additional insight into the examiners’ understanding of the research.
Thank you, Linh, it was great working with you on the project and I’m sad to see this come to a close. Thanks also to Associate Professor William YC Wang, Linh’s other supervisor, who provided valuable support and assistance during the project.
Last week, another of our AUT PhD students also had a successful oral examination – congratulations to Freddie Mbuba! Congratulations also to his supervisors, Associate Professor William YC Wang and Dr Karin Olesen.
We have just finished the 6th Transportation and Logistics Conference, held at National Chiao Tung University in Hsinchu. This was a great chance to catch up with Dr. Kuancheng HUANG, one of my friends, as he helped organise and host this great event. We had a range of presentations during the conference on a variety of transportation and logistics issues, including tracks on:
One of my students, Linh N K DUONG, did a great job presenting some research we have completed on transport-on-demand logistics.
After two full days of great presentations on some fascinating research, complemented with panel discussions and an engaging keynote by Prof Michael Bell, we had the technical tours on the final day. There were three locations that we could visit. In the morning you picked between either the Taipei Port (learning more about the Port Facilities and FTZ Operations) or the SYNNEX Distribution Center. In the afternoon, both groups combined at the Taoyuan International Airport where we learned more about the Air Cargo Facilities and the new T3 Project and associated planning. This technical tour opportunity capped off an excellent conference.
I’m looking forward to the next conference in 2018!
We hear plenty about research-informed teaching from Deans and accreditation bodies. To some faculty it all seems meaningless, hot-air-fuelled nonsense. Is it?
In their publication “Faculty Research Productivity and Standardized Student Learning Outcomes in a University Teaching Environment”, Galbraith and Merrill note that “…it was found that faculty research activity is positively and significantly related to teaching effectiveness …”
While many research studies focus on the evaluation of student evaluations as a measure of teaching effectiveness, Galbraith and Merrill took care to measure learning outcomes using standardised student learning outcome measure in a more robust and defensible way.
If you look around, while there are strong drivers to promote faculty to be more research active, in Australasia many faculty still don’t get fully engaged in research. Those that are tend to be extremely self-motivated folk. The same self-motivation may also manifest itself as a keen and careful teacher, generating the improved learning outcomes in the study.
Regardless, an interesting finding that does validate the belief that those engaged in research have a lot of interesting things to say about their subject and possess plenty of passion to inspire their students…
This is the first day of a 24-month project to improve operations and supply chain management education – the nDiVE project (www.ndive-project.com and www.facebook.com/ndiveproject). In essence – the objective is to represent more data and information within a virtual environment to enable learners to better understand supply chain complexity, particularly where there is a separation of time and/or space between the cause-and-effect. This can be particularly pertinent in supply chain quality or health and safety.
Watch this space – it should be an interesting 24-month project improving operations and supply chain education.
Wow – just got back from the Global Logistics in Mining 2012 conference (London, UK). Fabulous conference, excellent people. Lots going on around the world. We had some interesting discussions about:
I had a blast and I met some great people. While there are many logistics challenges ahead in mining, the room was filled with some of the brightest minds I’ve met so I am confident all the challenges will be overcome, one way or another!
Thanks to the folk at Fleming Gulf for organizing this.
Does the research plan ever survive contact with data or actual use? Sometimes seems that it does not. Even plans which seemed a good idea at the time you may find ‘not quite working’ when you actually go to analyse your data. Spent a few hours lately trying to work out the best way to analyse data. What I *thought* I would do simply wasn’t working out. Effective and careful planning helps resolve many of the problems with our research. More time taken in the planning, particularly focusing on how the data will be analysed, and the biases or limitations, will pay dividends later in the research project. Then – always check the assumptions of the statistical tests and make sure you haven’t violated any of the crucial assumptions. It’s alawys fun. Working hard at the start of the project does relieve plenty of pressure near the end of the project. A little time invested at the start, with a little support, makes everything much easier later on and also ensures that you have considered OTHER factors which may still become important, if the research plan changes a little. So – plan carefully, design your research method carefully, and ensure that you understand the assumptions of any tests you will use and why you will use these tests.