We address the multiproduct newsvendor problem under a general specification of customer choice behavior. We develop a methodology that yields upper bounds on the optimal value as well as feasible inventory solutions. The methodology is based on an approximate Jordan decomposition of the state transition matrix. Two specializations of the methodology are presented: one leads to a decomposition by customer into a sequence of assortment optimization problems and the second leads to a decomposition by product into a collection of independent newsvendor problems. We conduct computational experiments and find that the proposed methodology outperforms existing bounds. The electronic companion is available at https://doi.org/10.1287/opre.2017.1654 .

This study aims to expand our understanding of environmental performance by adopting exploration and exploitation concepts, which are key types of firm innovation. We reveal exploration and exploitation as two important antecedents of proactive and reactive environmental performance. We also identify the conditions under which the distinct effects of these two types of innovation are moderated. Using a sample of 2060 firm-year observations over a 12-year period in various industries, we find that firm exploration positively affects proactive environmental performance, whereas firm exploitation positively influences reactive environmental performance. Furthermore, we find that the positive effect of exploitation on reactive environmental performance intensifies when technological dynamism is high, and the positive effect of exploration on proactive environmental performance strengthens when a firm is large.

Purpose: The purpose of this paper is to investigate the contrasting moderating effect of a firm’s exploration on the relationship between the two types of long-term incentives (stock options/stock ownership) for the chief executive officers and a firm’s long-term performance. Even though the two types of incentives are designed to improve long-term performance, the degrees of impact on long-term performance differ. Based on behavioral agency theory, this study theoretically and empirically examines the role of a firm’s exploration on the above relationship.Design/methodology/approach: This study used three archival sources to obtain data on stock options, stock ownership, patents and exploration, financial measures, and others. Based on a sample of 1,963 firms in various industries from 1995 to 2006, this study tested the moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s performance.Findings: This study reveals the contrasting moderating effect of a firm’s exploration on the relationship between stock options/ownership and a firm’s long-term performance: a positive moderating effect on the relationship between stock options and performance and a negative moderating effect on the relationship between stock ownership and performance. In addition, empirical evidence was added on the inverted U-shaped relationship between stock ownership and a firm’s long-term performance.Originality/value: There is little research on a firm’s internal characteristics that strengthen or weaken the effects of stock options and stock ownership on firm performance. This study demonstrates the differential moderating effects of exploration on the relationship between stock options/stock ownership and long-term performance. Such effects of exploration come from the different risk features of stock options and stock ownership. The key implication is that stock options could be more effective than stock ownership to enhance a firm’s long-term performance when a firm has a strong exploration orientation.

Previous research suggested that manufacturing capability played an important role in enhancing environmental performance. The two dimensions of manufacturing capability, namely manufacturing flexibility and quality management, have been suggested as drivers for environmental performance. Unlike previous studies, we use a sample of 597 firms in Korea to investigate manufacturing flexibility, quality management, and their interaction international effect on environmental performance. It was found that manufacturing flexibility and quality management are positively associated with environmental performance. Additionally, their interaction was negatively related to environmental performance due to the trade-offs between the two, such as regarding organizational structure and culture. This study offers a novel perspective to the literature on environmental management by revealing such negative interaction because manufacturing flexibility and quality management are the main elements of manufacturing capability, and thus, firms should handle both appropriately.