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A feature fatigue supply chain game with cooperative programs and ad-hoc facilitators

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  • Pietro De Giovanni

Abstract

In this paper, we analyze a manufacturer's decisions to invest in technology to increase the number of product features and make its business more economically appealing. High number of features can lead to an overspecified product that entails a feature fatigue effect. More specifically, consumers show a decreasing willingness to purchase a good, due to its complexity. The manufacturer sells through a retailer, which in turn invests in some store facilitators efforts. The manufacturer can decrease the feature fatigue effect by implementing either a cooperative program or an ad-hoc facilitator. Our results reveal that the manufacturer, as the chain leader, makes decisions according to the program's efficiency, while considering the revenue sharing rule. When the share is low, the manufacturer's decision is always based on efficiency; otherwise, high sharing parameters sponsor the implementation of an ad-hoc facilitator. We identify a region of parameters in which firms have divergent preferences, resulting that the feature fatigue mitigation is a short term objective. The results also reveal a trade-off between profits and feature fatigue. An ad-hoc facilitator guarantees large profits, even without fully solving the feature fatigue issue. Instead, a support program increases mitigates the feature fatigue effect, while worsening the firms' profits.

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  • Pietro De Giovanni, 2019. "A feature fatigue supply chain game with cooperative programs and ad-hoc facilitators," International Journal of Production Research, Taylor & Francis Journals, vol. 57(13), pages 4166-4186, July.
    • Handle: RePEc:taf:tprsxx:v:57:y:2019:i:13:p:4166-4186
    DOI: 10.1080/00207543.2018.1519264
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    Cited by:

    1. Sara Romagnoli & Claudia Tarabu' & Behzad Maleki Vishkaei & Pietro De Giovanni, 2023. "The Impact of Digital Technologies and Sustainable Practices on Circular Supply Chain Management," Logistics, MDPI, vol. 7(1), pages 1-17, January.
    2. Yong Ma & Chunyu Li, 2023. "Optimal Strategies of Customization and Information Sharing in the Presence of Feature Creep," Sustainability, MDPI, vol. 15(10), pages 1-29, May.
    3. Rezaee Vessal, Sara & De Giovanni, Pietro & Hassanzadeh, Alborz, 2022. "Technology and service investments in the presence of feature fatigue and word-of-mouth," European Journal of Operational Research, Elsevier, vol. 301(3), pages 923-941.

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