Automated Purchase to Pay Process Value Modeling and Comparative Process Speeds

The importance of efficient supply chain management has increased due to globalization and the blurring of organizational boundaries. Various supply chain management technologies have been identified to drive organizational profitability and financial performance. Organizations have historically been concentrating heavily on the flow of goods and services, while less attention has been dedicated to the flow of money. While supply chains are becoming more transparent and automated, new opportunities for financial supply chain management have emerged through information technology solutions and comprehensive financial supply chain management strategies. This research concentrates on the end part of the purchasing process which is the handling of invoices. Efficient invoice processing can have an impact on organizations working capital management and thus provide companies with better readiness to face the challenges related to cash management. Leveraging a process mining solution the aim of this research was to examine the automated invoice handling process of four different organizations. The invoice data was collected from each organizations invoice processing system. The sample included all the invoices organizations had processed during the year 2012. The main objective was to find out whether e-invoices are faster to process in an automated invoice processing solution than scanned invoices (post entry into invoice processing solution). Other objectives included looking into the longest lead times between process steps and the impact of manual process steps on cycle time. Processing of invoices from maverick purchases was also examined. Based on the results of the research and previous literature on the subject, suggestions for improving the process were proposed. The results of the research indicate that scanned invoices were processed faster than e-invoices. This is mostly due to the more complex processing of e-invoices. It should be noted however that the manual tasks related to turning a paper invoice into electronic format through scanning are ignored in this research. The transitions with the longest lead times in the invoice handling process included both pre-automated steps as well as manual steps performed by humans. When the most common manual steps were examined in more detail, it was clear that these steps had a prolonging impact on the process. Regarding invoices from maverick purchases the evidence shows that these invoices were slower to process than invoices from purchases conducted through e-procurement systems and from preferred suppliers. Suggestions on how to improve the process included: increasing invoice matching, reducing of manual steps and leveraging of different value added services such as invoice validation service, mobile solutions and supply chain financing services. For companies that have already reaped all the process efficiencies the next step is to engage in collaborative financial supply chain management strategies that can benefit the whole supply chain.

Consumer willingness to pay for in-flight service and comfort levels: A choice experiment

In the competitive aviation market as a result of the emergence of low cost carriers, charter airlines have had to reconsider their approach to service provision. Specifically, the reduction in service and comfort levels offered by the low cost airlines provides charter carriers with an opportunity to differentiate their product based on the quality of the offering. To consider this strategic option we employ an on-line choice experiment to examine consumer choices with respect to the bundle of services on offer when deciding to purchase a flight, With these data we use the Bayesian methods to estimate a mixed logit specification. Our results reveal that in principle passengers are willing to pay a relatively large amount for enhanced service quality. (C) 2008 Elsevier Ltd. All rights reserved.

Measuring Consumers' Willingness to Pay. Which Method fits best?

Gauging the maximum willingness to pay (WTP) of a product accurately is a critical success factor that determines not only market performance but also financial results. A number of approaches have therefore been developed to accurately estimate consumers’ willingness to pay. Here, four commonly used measurement approaches are compared using real purchase data as a benchmark. The relative strengths of each method are analyzed on the basis of statistical criteria and, more importantly, on their potential to predict managerially relevant criteria such as optimal price, quantity and profit. The results show a slight advantage of incentive-aligned approaches though the market settings need to be considered to choose the best-fitting procedure.

How Should Consumers’ Willingness to Pay Be Measured? An Empirical Comparison of State-of-the-Art Approaches

This study compares the performance of four commonly used approaches to measure consumers’ willingness to pay with real purchase data (REAL): the open-ended (OE) question format; choicebased conjoint (CBC) analysis; Becker, DeGroot, and Marschak’s (BDM) incentive-compatible mechanism; and incentive-aligned choice-based conjoint (ICBC) analysis. With this five-in-one approach, the authors test the relative strengths of the four measurement methods, using REAL as the benchmark, on the basis of statistical criteria and decision-relevant metrics. The results indicate that the BDM and ICBC approaches can pass statistical and decision-oriented tests. The authors find that respondents are more price sensitive in incentive-aligned settings than in non-incentive-aligned settings and the REAL setting. Furthermore, they find a large number of “none” choices under ICBC than under hypothetical conjoint analysis. This study uncovers an intriguing possibility: Even when the OE format and CBC analysis generate hypothetical bias, they may still lead to the right demand curves and right pricing decisions.

Socioeconomic Differences in Preferences and Willingness-to-Pay for Insulin Delivery Systems in Type 1 and Type 2 Diabetes

Background: An evaluation of patients' preferences is necessary to understand the demand for different insulin delivery systems. The aim of this study was to investigate the association between socioeconomic status (SES) and patients' preferences and willingness to pay (WTP) for various attributes of insulin administration for diabetes management. Methods: We conducted a discrete choice experiment (DCE) to determine patients' preferences and their WTP for hypothetical insulin treatments. Both self-reported annual household income and education completed were used to explore differences in treatment preferences and WTP for different attributes of treatment across different levels of SES. Results: The DCE questionnaire was successfully completed by 274 patients. Overall, glucose control was the most valued attribute by all socioeconomic groups, while route of insulin delivery was not as important. Patients with higher incomes were willing to pay significantly more for better glucose control and to avoid adverse events compared to lower income groups. In addition, they were willing to pay more for an oral short-acting insulin ($Can 71.65 [95% confidence interval, $40.68, $102.62]) compared to the low income group ($Can 9.85 [95% confidence interval, 14.86, 34.56; P < 0.01]). Conversely, there were no differences in preferences when the sample was stratified by level of education. Conclusions: This study revealed that preferences and WTP for insulin therapy are influenced by income but not by level of education. Specifically, the higher the income, the greater desire for an oral insulin delivery system, whereas an inhaled route becomes less important for patients.

A valuation of patients` willingness-to-pay for insulin delivery in diabetes

Objectives: The aim of this study was to determine the insulin-delivery system and the attributes of insulin therapy that best meet patients` preferences, and to estimate patients` willingness-to-pay (WTP) for them. Methods: This was a cross-sectional discrete choice experiment (DCE) study involving 378 Canadian patients with type 1 or type 2 diabetes. Patients were asked to choose between two hypothetical insulin treatment options made up of different combinations of the attribute levels. Regression coefficients derived using conditional logit models were used to calculate patients` WTP. Stratification of the sample was performed to evaluate WTP by predefined subgroups. Results: A total of 274 patients successfully completed the survey. Overall, patients were willing to pay the most for better blood glucose control followed by weight gain. Surprisingly, route of insulin administration was the least important attribute overall. Segmented models indicated that insulin naive diabetics were willing to pay significantly more for both oral and inhaled short-acting insulin compared with insulin users. Surprisingly, type 1 diabetics were willing to pay $C11.53 for subcutaneous short-acting insulin, while type 2 diabetics were willing to pay $C47.23 to avoid subcutaneous short-acting insulin (p < .05). These findings support the hypothesis of a psychological barrier to initiating insulin therapy, but once that this barrier has been overcome, they accommodate and accept injectable therapy as a treatment option. Conclusions: By understanding and addressing patients` preferences for insulin therapy, diabetes educators can use this information to find an optimal treatment approach for each individual patient, which may ultimately lead to improved control, through improved compliance, and better diabetes outcomes.

Effects of a change in abundance of elephants on willingness to pay for their conservation

This paper explores the way in which the stated willingness to pay for the conservation of Asian elephants in Sri Lanka varies with hypothetical variations in their abundance. To do that, it relies on results from a sample of residents of Colombo. The willingness to pay function is found to be unusual. It increases at an increasing rate for hypothetical reductions in the elephant population compared to its current level (a level that makes the Asian elephant endangered) and also increases at a decreasing rate for increases in this population from its current level. Rational explanations are given for this relationship. The relationship is, however, at odds with relationships suggested in some of the literature for total economic value as a function of the abundance of a wildlife species. It is suggested that willingness to pay for conservation of a species rationally includes a strategic element and may not always measure the total economic value of a species. Nevertheless, willingness to pay is still policy relevant in such cases.

Knowledge and willingness to pay for the conservation of wildlife species: Experimental results evaluating Australian tropical species

The nature of an experiment involving 204 residents is outlined and the results are reported and analysed. Two consecutive surveys of the respondents provide data about their stated knowledge of 23 wildlife species present in tropical Australia, most of which exclusively occur there. In addition, these surveys provide data about the willingness of respondents to pay for the conservation of those species belonging to three taxa; reptiles, mammals, and birds. Thus it is possible to compare the respondents’ stated knowledge of the species with their willingness to pay for their conservation, and to draw relevant inferences from this. From the initial survey and these associations, interesting relationships can be observed between those variables (knowledge and willingness to pay). The second survey was completed after the respondents’ knowledge of the species was experimentally increased and became more balanced. This is shown to result in increased dispersion (greater discrimination) in willingness to contribute to conservation of the different species in the set of wildlife species considered. Both theoretical and policy conclusions are drawn from the results.

Knowledge of birds and willingness to pay for their conservation: An Australian case study

This case study concentrates on the extent of knowledge of members of the Australian public of Australia’s tropical bird species and their willingness to pay for their conservation. In order to place this issue in context, it first provides background information on the status of Australian bird species, focusing attention on species that occur in tropical Australia. Then, using survey results, this study considers the hypothesis that the public’s relative support for the conservation of different bird species depends on its comparative knowledge of their existence and status. Based on experimental results from a sample of residents of Brisbane, Queensland (Australia), it is found that their knowledge of bird species that occur exclusively in the Australian tropics (including tropical Queensland) is very poor compared to those that also occur in the Brisbane area and are relatively common. Experimental results indicate that when respondents in the sample had an option to allocate $1,000 between ten bird species listed in the survey, it resulted in a greater allocation of funds to the better known and more common species than when they were provided with balanced information about all the selected species. With balanced information the average allocation to bird species confined mostly to the Australian tropics, particularly those threatened or endangered, increased. The general consequences of this for policies for the conservation of birds are discussed.

Individual and household willingness to pay for public goods

The issue of whether willingness to pay (WTP) for the benefits generated by a public good should be elicited on an individual or on a household basis is addressed. Differences between individual and household WTP may arise when members of the household are mutually altruistic. It is shown that, for general specifications of altruism, household WTP is less than the sum of household members' individual WTP. Implications for the choice between household and individual measures of WTP are considered, and issues in the elicitation of household WTP are addressed.

Willingness to pay for conservation of the Asian elephant in Sri Lanka: A contingent valuation study

Results from a CVM survey of willingness to pay for the conservation of the Asian elephant of a sample of urban residents in three selected housing schemes in Colombo, the capital of Sri Lanka, are reported. Face– to–face surveys were conducted using an interview schedule. A non-linear logit regression model was constructed to analyse the respondents’ responses for the payment principle questions and to identify the factors that influence their responses. We investigate whether urban residents’ WTP for the conservation of elephants is sufficient to compensate farmers for the damage caused by elephants, and consequently to raise farmers’ tolerance of the presence of elephants on the farming fields. We find that beneficiaries (the urban residents) could compensate losers (the farmers in the HEC affected areas) and be better off than in the absence of elephants in Sri Lanka. This suggests that there is a strong economic case for the conservation of the wild elephant population in Sri Lanka. However, we have insufficient data to determine Sri Lanka’s optimal elephant population in the Kaldor-Hicks sense.

Willingness of Sri Lankan farmers to pay for a scheme to conserve elephants: An empirical analysis

This paper explores the feasibility of adopting an integrated economic approach to raise farmers’ tolerance of the presence of elephants on their farming lands. Responses to this approach were sought from a sample of farmers in the areas affected by human elephant conflict in the northwestern province of Sri Lanka. Results from a contingent valuation survey of their willingness to pay for a scheme to conserve elephants are also reported. Two separate logit regression analyses were undertaken to examine the factors that influence the farmers’ responses for the payment principle question and their opinions on the integrated economic approach. Although found that the majority of the respondents expressed their willingness to pay for the proposed scheme and supported for the implementation of the integrated approach, we have insufficient data yet to determine if their support and financial contribution would be sufficient to set up this programme and also to predict its economic viability. Nevertheless, the overall finding of this study provides an improved economic assessment of the farmers’ attitudes towards the wild elephant in Sri Lanka. At the same time the study shows that, contrary to commonly held assumptions, farmers in this developing country, do support wildlife conservation.

Willingness to pay for different degrees of abundance of elephants

This paper presents an application of the contingent valuation method (CVM) to determine how the willingness to pay (WTP) for conservation of Asian elephants varies with hypothetical variations in their population. Results from a CVM survey of a sample of urban residents in Colombo, the capital of Sri Lanka are used for this purpose. We find, consistent with the basic principles of consumer demand theory, the marginal change in the respondents’ WTP amounts is positive but appears to diminish in parallel to the increases in the current wild elephant population (CWEP). In contrast to theoretical expectations, however, we find that the WTP for preserving this species increases at an increasing rate in relation to decreases in the CWEP. This is probably because respondents perceive that extinction becomes more imminent as the abundance of the elephant is reduced and therefore it becomes more urgent to act. However, this adds a new complication to the interpretation of the WTP findings.