Volume flexibility in services: The costs and benefits of flexible labor resources

Management Science

Volumn 60, Issue 8, 2014, Pages 1884-1906

  Kesavan, Saravanan ^a   Staats, Bradley R ^a   Gilland, Wendell ^a  

^a UNIVERSITY OF NORTH CAROLINA   (United States)

Author keywords

Demand spikes; Labor mix; Retail operations; Volume flexibility

Indexed keywords

MANAGEMENT; MANAGEMENT SCIENCE;

ARCHIVAL DATA; COSTS AND BENEFITS; DEMAND SPIKES; FINANCIAL PERFORMANCE; FLEXIBLE LABOR; MULTIPLE DIMENSIONS; RETAIL OPERATIONS; VOLUME FLEXIBILITY;

SALES;

EID: 84905739758     PISSN: 00251909     EISSN: 15265501     Source Type: Journal    
DOI: 10.1287/mnsc.2013.1844     Document Type: Article

References (62)

1. Abernathy WJ, Baloff N, Hershey JC, Wandel S (1973) A three-stage manpower planning and scheduling model-A service-sector example. Oper. Res. 21(3):693-711.
2. Aiken LS, West SG (1991) Multiple Regression: Testing and Interpreting Interactions (Sage, Thousand Oaks, CA).
3. Aksin Z, Armony M, Mehrotra V (2007) The modern call center: A multi-disciplinary perspective on operations management research. Production Oper. Management 16(6):665-688.
4. Amemiya Y (1985) Instrumental variable estimator for the nonlinear errors-in-variables model. J. Econometrics 28(3):273-289.
5. Bhandari A, Scheller-Wolf A, Harchol-Balter M (2008) An exact and efficient algorithm for the constrained dynamic operator staffing problem for call centers. Management Sci. 54(2):339-353.
6. Bloom N, Van Reenen J (2007) Measuring and explaining management practices across firms and countries. Quart. J. Econom. 122(4):1351-1408.
7. Bolton P, Dewatripont M (2004) Contract Theory (MIT Press, Cambridge, MA).
8. Boudreau J, Hopp W, McClain JO, Thomas LJ (2003) On the interface between operations and human resources management. Manufacturing Service Oper. Management 5(3):179-202.
9. Brooks F (1975) The Mythical Man-Month: Essays on Software Engineering (Addison-Wesley, New York).
10. Bureau of Labor Statistics (2013) The employment situation- February 2013. Retrieved March 17, 2013, http://www.bls.gov/news.release/pdf/empsit.pdf.
11. Cable DM, Gino F, Staats BR (2013) Breaking them in or revealing their best? Reframing socialization around newcomer self expression. Admin. Sci. Quart. 58(1):1-36.
12. Central Intelligence Agency (2012) The World Factbook (Central Intelligence Agency, Washington, DC). https://www.cia.gov/library/publications/ the-world-factbook/fields/2012.html.
13. Edmondson AC (2002) The local and variegated nature of learning in organizations: A group-level perspective. Organ. Sci. 13(2):128-146.
14. Ettlie JE, Penner-Hahn JD (1994) Flexibility ratios and manufacturing strategy. Management Sci. 40(11):1444-1454.
15. Fieller EC (1954) Some problems in interval estimation. J. Roy. Statist. Soc. Ser. B 175-185.
16. Fisher ML, Krishnan J, Netessine S (2007) Retail store execution: An empirical study. Working paper, University of Pennsylvania, Philadelphia.
17. Gans N, Koole G, Mandelbaum A (2003) Telephone call centers: Tutorial, review, and research prospects. Manufacturing Service Oper. Management 5(2):79-141.
18. Goyal M, Netessine S (2011) Volume flexibility, product flexibility, or both: The role of demand correlation and product substitution. Manufacturing Service Oper. Management 13(2):180-193.
19. Graves SC (1981) A review of production scheduling. Oper. Res. 29(4):646-675.
20. Green L, Savva N, Savin S (2013) "Nursevendor problem'': Personnel staffing in the presence of endogenous absenteeism. Management Sci. 59(10):2237-2256.
21. Greene WH (2003) Econometric Analysis, 5th ed. (Prentice-Hall, Upper Saddle River, NJ).
22. Greenhouse S (2012) A part-time life. New York Times (October 28), http://www.nytimes.com/2012/10/28/business/a-part-time -life-as-hours-shrink- and-shift-for-american-workers.html.
23. Hawkes H, Bailey C, Riedl P (2011) Service operations as a secret weapon. Strategy C Business (May 2), http://www.strategy -business.com/article/00072? pg=all.
24. Heath C, Staudenmayer N (2000) Coordination neglect: How lay theories of organizing complicate coordination in organizations. Res. Organ. Behav. 22:153-191.
25. Holt CC, Modigliani F, Muth JF (1956) Derivation of a linear decision rule for production and employment. Management Sci. 2(2):159-177.
26. Holt CC, Modigliani F, Simon HA (1955) A linear decision rule for production and employment scheduling. Management Sci. 2(1):1-30.
27. Houseman SN (2001) Why employers use flexible staffing arrangements: Evidence from an establishment survey. Indust. Labor Relations Rev. 55(1):149-170.
28. Isidore C (2012) Spring cleaning spurs Home Depot to hire 70,000. CNN Money (January 12), http://money.cnn.com/2012/01/12/news/companies/home-depot- hiring/index.htm.
29. Kalleberg AL (2000) Nonstandard employment relations: Part-time, temporary and contract work. Annual Rev. Soc. 26:341-365.
30. KC D, Terwiesch C (2009) Impact of workload on service time and patient safety: An econometric analysis of hospital operations. Management Sci. 55(9):1486-1498.
31. Lapré MA, Nembhard IM (2010) Inside the organizational learning curve. Foundations Trends Tech., Inform. Oper. Management 4(1):1-103.
32. Lapré MA, Tsikriktsis N (2006) Organizational learning curves for customer dissatisfaction: Heterogeneity across airlines. Management Sci. 52(3):352-366.
33. Levine JM, Moreland R (1998) Small groups. Gilbert DT, Fiske ST, Lindzey G, eds. The Handbook of Social Psychology, Vol. 2 (McGraw Hill, New York), 415-469.
34. Lind JT, Mehlum H (2010) With or without U? The appropriate test for a U-shaped relationship. Oxford Bull. Econom. Statist. 72(1):109-118.
35. Lippman SA, Rolfe AJ, Wagner HM, Yuan JSC (1967) Optimal production scheduling and employment smoothing with deterministic demands. Management Sci. 14(3):127-158.
36. Mani V, Kesavan S, Swaminathan J (2012) Estimating the impact of understaffing on sales and profitability in retail stores. Working paper, University of North Carolina at Chapel Hill, Chapel Hill.
37. Milner JM, Pinker EJ (2001) Contingent labor contracting under demand and supply uncertainty. Management Sci. 47(8): 1046-1062.
38. Muggeo VMR (2003) Estimating regression models with unknown break-points. Statist. Medicine 22(19):3055-3071.
39. Netessine S, Fisher ML, Krishnan J (2010) Labor planning, execution, and retail store performance: An exploratory investigation (University of Pennsylvania, Philadelphia).
40. Nevo A, Wolfram C (2002) Why do manufacturers issue coupons? An empirical analysis of breakfast cereals. RAND J. Econom. 33(2):319-339.
41. Perdikaki O, Kesavan S, Swaminathan JM (2012) Effect of retail store traffic on conversion rate and sales. Manufacturing Service Oper. Management 14(1):145-162.
42. Pfeffer J, Baron JN (1988) Taking the workers back out: Recent trends in the structuring of employment. Res. Organ. Behav. 10:257-303.
43. Pinker EJ, Larson RC (2003) Optimizing the use of contingent labor when demand is uncertain. Eur. J. Oper. Res. 144(1):39-55.
44. Pinker EJ, Shumsky RA (2000) The efficiency-quality trade-off of cross-trained workers. Manufacturing Service Oper. Management 2(1):32-48.
45. Raman A, DeHoratius N, Ton Z (2001) Execution: The missing link in retail operations. California Management Rev. 43(3):136-152.
46. Sethi AK, Sethi SP (1990) Flexibility in manufacturing: A survey. Internat. J. Flexible Manufacturing Systems 2(4):289-328.
47. Siebert WS, Zubanov N (2010) Management economics in a large retail company. Management Sci. 56(8):1398-1414.
48. Sobel MJ (1970) Smoothing start-up and shut-down costs: Concave case. Management Sci. 17(1):78-91.
49. Staats BR, Gino F (2012) Specialization and variety in repetitive tasks: Evidence from a Japanese bank. Management Sci. 58(6):1141-1159.
50. Staats BR, Brunner DJ, Upton DM (2011) Lean principles, learning, and knowledge work: Evidence from a software services provider. J. Oper. Management 29(5):376-390.
51. Staats BR, Milkman KL, Fox CR (2012) The team scaling fallacy: Underestimating the declining efficiency of larger teams. Organ. Behav. Human Decision Processes 118(2):132-142.
52. Staiger D, Stock JH (1997) Instrumental variables regression with weak instruments. Econometrica 65(3):557-586.
53. Staiger D, Stock JH, Watson MW (1997) The NAIRU, unemployment and monetary policy. J. Econom. Perspect. 11(1):33-49.
54. Stratman JK, Roth AV, Gilland WG (2004) The deployment of temporary production workers in assembly operations. J. Oper. Management 21(6):689-707.
55. Suarez FF, Cusumano MA, Fine CH (1996) An empirical study of manufacturing flexibility in printed circuit board assembly. Oper. Res. 44(1):223-240.
56. Tan TF, Netessine S (2012) When does the devil make work? An empirical study of the impact of workload on worker productivity. Working paper, INSEAD, Fontainebleau, France.
57. Ton Z (2010) The effect of labor on profitability: The role of quality. Working paper, Harvard Business School, Boston, MA
58. Ton Z, Huckman RS (2008) Managing the impact of employee turnover on performance: The role of process conformance. Organ. Sci. 19(1):56-68.
59. Upton DM (1997) Process range in manufacturing. Management Sci. 43(8):1079-1092.
60. Whitt W (1999) Dynamic staffing in a telephone call center aiming to immediately answer all calls. Oper. Res. Lett. 24(5):205-212.
61. Wooldridge JM (2002) Econometric Analysis Cross Section Panel (MIT Press, Cambridge, MA).
62. Zellner A, Theil H (1962) Three-stage least squares: Simultaneous estimation of simultaneous equations. Econometrica: J. Econometric Soc. 30(1):54-78.