报告题目：Product Recall Delay and Product Cycle
报 告 人：Hsiao-Hui Lee（香港大学 副教授）
主 持 人：李冬（中山大学岭南学院 助理教授）
When a safety defect occurs, manufacturers often use product recalls to mitigate potential consequences. Our empirical observation on large recalls in the automobile industry suggests that the timing of a recall is a key decision in this recall process, as we find that only recalls made in an early stage of a product cycle significantly influence future product sales. Motivated by this observation, we study the optimal recall timing for a profit-maximizing manufacturer by endogenizing a product’s life cycle into our model. Specifically, firms make a trade-off between the future product sales loss due to a recall and the penalty for a delayed recall. When a product defect is discovered at an early stage of the product cycle, we find that a firm may strategically delay the timing of a recall to mitigate the negative shock evoked by this recall. However, the delay duration (i.e., the time from when a defect is identified to the recall time) depends on the margin of the product as well as the penalty with respect to recall delays. For a high margin product (with respect to unit recall costs), firms are likely to delay such recall decisions; however, for a low margin product, such delay decisions are not always optimal. Finally, we use an empirical analysis to confirm the extent to which a delayed recall on firm sales is effective.
Dr. Hsiao-Hui Lee is an Associate Professor of Innovation and Information Management at the Faculty of Business and Economics of The University of Hong Kong. She received her Ph.D. in Operations Management from the Simon School at Rochester University, where she examined issues in service and healthcare areas using stochastic models. Her current research interests switched to empirical operations management in the context of supply chains, innovation, and sustainability. Her work has been published on leading journals such as Management Science, Operations Research, M&SOM, POM, and Review of Economics and Statistics.