Article ID: | iaor1996452 |
Country: | United States |
Volume: | 41 |
Issue: | 4 |
Start Page Number: | 646 |
End Page Number: | 652 |
Publication Date: | Apr 1995 |
Journal: | Management Science |
Authors: | Balachandran Kashi R., Rahakrishnan Suresh |
Keywords: | demand, performance, scheduling |
This paper examines the role of cost application in the presence of delay and agency costs. Two risk neutral division managers share a common (production) facility and decide on (a) the demand (usage) rates, and (b) productive action. Each division manager causes costly delays at the common production facility for the other division manager. The expected delay depends on the demand rates chosen by the division managers. An