Incorporating Latent Variables into Discrete Choice Models - A Simultaneous Estimation Approach Using SEM Software

Integrated choice and latent variable (ICLV) models represent a promising new class of models which merge classic choice models with the structural equation approach (SEM) for latent variables. Despite their conceptual appeal, applications of ICLV models in marketing remain rare. We extend previous ICLV applications by first estimating a multinomial choice model and, second, by estimating hierarchical relations between latent variables. An empirical study on travel mode choice clearly demonstrates the value of ICLV models to enhance the understanding of choice processes. In addition to the usually studied directly observable variables such as travel time, we show how abstract motivations such as power and hedonism as well as attitudes such as a desire for flexibility impact on travel mode choice. Furthermore, we show that it is possible to estimate such a complex ICLV model with the widely available structural equation modeling package Mplus. This finding is likely to encourage more widespread application of this appealing model class in the marketing field.

Dynamic merge of discrete goods flow – Impact on throughput and efficiency

Continuous conveyors with a dynamic merge were developed with adaptable control equipment to differentiate these merges from competing Stop-and-Go merges. With a dynamic merge, the partial flows are manipulated by influencing speeds so that transport units need not stop for the merge. This leads to a more uniform flow of materials, which is qualitatively observable and verifiable in long-term measurements. And although this type of merge is visually mesmerizing, does it lead to advantages from the view of material flow technology? Our study with real data indicates that a dynamic merge shows a 24% increase in performance, but only for symmetric or nearly symmetric flows. This performance advantage decreases as the flows become less symmetric, approaching the throughput of traditional Stop-and-Go merges. And with a cost premium for a continuous merge of approximately 10% due to the additional technical components (belt conveyor, adjustable drive engines, software, etc.), this restricts their economical use.