Early Versus Late Effort in Dynamic Agencies with Unverifiable Information

In this paper we analyze a dynamic agency problem where contracting parties do not know the agent's future productivity at the beginning of the relationship. We consider a two-period model where both the agent and the principal observe the agent's second-period productivity at the end of the first period. This observation is assumed to be non-verifiable information. We compare long-term contracts with short-term contracts with respect to their suitability to motivate effort in both periods. On the one hand, short-term contracts allow for a better fine-tuning of second-period incentives as they can be aligned with the agent's second-period productivity. On the other hand, in short-term contracts first-period effort incentives might be distorted as contracts have to be sequentially optimal. Hence, the difference between long-term and short-term contracts is characterized by a trade-off between inducing effort in the first and in the second period. We analyze the determinants of this trade-off and demonstrate its implications for performance measurement and information system design.

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.

Performance Availability and Anticipatory Change Planning of Intralogistics Systems: A Simulation-Based Approach

In recent years, the ability to respond to real time changes in operations and reconfigurability in equipment are likely to become essential characteristics for next generation intralogistics systems as well as the level of automation, cost effectiveness and maximum throughput. In order to cope with turbulences and the increasing level of dynamic conditions, future intralogistics systems have to feature short reaction times, high flexibility in processes and the ability to adapt to frequent changes. The increasing autonomy and complexity in processes of today’s intralogistics systems requires new and innovative management approaches, which allow a fast response to (un)anticipated events and adaptation to changing environment in order to reduce the negative consequences of these events. The ability of a system to respond effectively a disruption depends more on the decisions taken before the event than those taken during or after. In this context, anticipatory change planning can be a usable approach for managers to make contingency plans for intralogistics systems to deal with the rapidly changing marketplace. This paper proposes a simulation-based decision making framework for the anticipatory change planning of intralogistics systems. This approach includes the quantitative assessments based on the simulation in defined scenarios as well as the analysis of performance availability that combines the flexibility corridors of different performance dimensions. The implementation of the approach is illustrated on a new intralogistics technology called the Cellular Transport System.