Mixups in the warehouse centralization and decentralization in the multi-plant firm

L. Hunnicutt

No 2000-35, Working Papers from Utah State University, Department of Economics

Abstract: Single-plant firms choose quantity/quality levels to maximize profits. Multi-plant firms face this decision and must also choose how many decision makers to have. This paper presents two case studies and a model of a multi-plant firm in which overhead costs are lower with one decision-maker (centralization), but the mass of information and the need for timely decisions make occasional mixups unavaoidable. Multiple decision makers (decentralization) solves the mixup problem. Standardization—treating different outlets similarly in response to costly mixups—appears in the case studies, and is demonstrated as a result in the model.

JEL-codes: D21 L23 (search for similar items in EconPapers)
Pages: 26 pages
New Economics Papers: this item is included in nep-bec, nep-cse and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:usu:wpaper:2000-35

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