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                                                     Seminar

             Department of Systems Engineering and Engineering Management
The Chinese University of Hong Kong

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Title	:	A Hidden Cost of Supply Chain Coordination
Speaker	:	Prof. Erick (Zhaolin) Li
		The University of Sydney
Date	:	Dec.20th, 2010 (Monday)
Time	:	4:30 p.m. - 5:30 p.m.
Venue	:	Room 513
		William M.W. Mong Engineering Building
		(Engineering Building Complex Phase 2)
		CUHK

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Abstract:
　

In contrast to previous literature on supply chain management, we identify a hidden cost of supply chain coordination. Our analysis is based upon a capacity signalling model between the firm's manager and the financial market. The firm's capacity investment decision serves as a signal and therefore affects the value of the firm. The twin assumptions of asymmetric information and managerial interests in the interim share price may result in either over-investment or under-investment. After a thorough analysis of the baseline model, we extend the analysis to examine whether supply chain coordination (or vertical integration) is optimal when the downstream firm could distort the capacity decision. We show that in a vertically integrated supply chain, the deadweight loss of signalling could cause chain-wide damages and hence, creating a significant cost of supply chain coordination. We also find that if over-investment prevails, signalling could offset the benefit of coordination and make non-coordination optimal; whereas if under-investment prevails, signalling always exacerbates the performance of the non-coordinated chain and makes coordination optimal.

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Biography:
　

Dr. Erick (Zhaolin) Li received a Ph.D. in Business Administration from The Pennsylvania State University, a Master of Commerce in Accounting from The University of New South Wales, and a Bachelor of Engineering in Materials Science & Industrial Engineering from Shanghai Jiao Tong University. Dr. Li has been with The University of Sydney since January 2009 and is currently a Senior Lecturer. Before moving to Sydney, he had worked in Ernst & Young LLP, Southern Arkansas University, and City University of Hong Kong. His research has appeared in Management Science and Production and Operations Management.

************************* ALL ARE WELCOME ************************

Host	:	Prof. Youhua Chen
Tel	:	(852) 2609-8310
Email	:	yhchen@se.cuhk.edu.hk
Enquiries	:	Prof. Nan Chen or Prof. Sean X. Zhou
	:	Department of Systems Engineering and Engineering Management
		CUHK
Website	:	http://www.se.cuhk.edu.hk/~seem5201
Email	:	seem5201@se.cuhk.edu.hk

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