Optimal quality provision when reputation is subject to random inspections

David Hirschmann

doi:10.1016/j.orl.2013.12.002

Optimal quality provision when reputation is subject to random inspections

David Hirschmann

Institut für Rechnungswesen, Innovation und Strategie

Veröffentlichungen: Beitrag in Fachzeitschrift › Artikel › Peer Reviewed

Abstract

We consider a firm whose profit is determined by its reputation. The quality of its products is unobservable, but random inspections reveal the true quality and change the reputation. We obtain closed-form solutions for the provision of quality and show that increasing the inspection rate can be disadvantageous for customers.

Originalsprache	Englisch
Seiten (von - bis)	64-69
Seitenumfang	6
Fachzeitschrift	Operations Research Letters
Jahrgang	42
Ausgabenummer	1
DOIs	https://doi.org/10.1016/j.orl.2013.12.002
Publikationsstatus	Veröffentlicht - Jan. 2014

ÖFOS 2012

101015 Operations Research
502019 Marketing

Zugriff auf Dokument

10.1016/j.orl.2013.12.002

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Zitationsweisen

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title = "Optimal quality provision when reputation is subject to random inspections",

abstract = "We consider a firm whose profit is determined by its reputation. The quality of its products is unobservable, but random inspections reveal the true quality and change the reputation. We obtain closed-form solutions for the provision of quality and show that increasing the inspection rate can be disadvantageous for customers.",

keywords = "Goodwill, Inspections, Poisson process, Quality, Stochastic optimal control",

author = "David Hirschmann",

note = "Funding Information: The author wants to thank F. Wirl and K. W{\"a}lde for discussion, and an anonymous referee for his remarks which helped improving the paper. This research was supported by the Vienna Science and Technology Fund ( MA09-019 ).",

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KW - Inspections

KW - Poisson process

KW - Quality

KW - Stochastic optimal control

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