The Optimum Size of a Producer Service Firm Facing Uncertain Demand

Bibliographic Data

ID4139465
AuthorsD Phillips (0000-0001-5636-9702, Department of Geography, State University of New York at Buffalo, NY 14261, USA), David E Phillips (0000-0003-2569-1015, University at Buffalo, State University of New York), A D Macpherson (Department of Geography, State University of New York at Buffalo, NY 14261, USA), Alan Macpherson (0000-0001-5456-3878, University at Buffalo, State University of New York), Barry Lentnek (University at Buffalo, State University of New York)
Year1998
Volume30
Issue1
Pages129-141
Publication date1998-01-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEnvironment and Planning A Economy and Space (JOURNAL)
Journal identifiersISSN: 0308-518X • E-ISSN: 1472-3409
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1068/a300129
OpenAlexW2082737543
LanguageEN
Citations received6
References cited14

In this paper we present a theory of optimum size and number of clients for a producer service firm performing maintenance and repair services for clients in the manufacturing sector. The theory holds that scale economies vary directly with the level of contact requirements for service delivery. This is illustrated by a model of a monopoly repair specialist in which frequency of breakdown (and therefore client demand for service) is stochastic. Comparative statics are used to draw testable hypotheses from the model which, if extended to a multisite case, may serve as a portion of a general model of producer service location

Business · Comparative statics · Economics · Economies of scale · Industrial organization · Microeconomics · Monopoly · Operations management · Service delivery framework · Consumer Market Behavior and Pricing · Digital Platforms and Economics · Supply Chain and Inventory Management · Marketing

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