2015 Informs Annual Meeting

SC62

INFORMS Philadelphia – 2015

3 - Have You Been Served? The Relationship between Corporate Social Responsibility and Lawsuits Rob Salomon, rsalomon@nyu.edu Does corporate social responsibility (CSR) protect firms against lawsuits? We conduct a study of 1047 firms from 46 countries over the period 2002 to 2011. We find, surprisingly, that CSR is positively associated with lawsuits. However, the relationship between CSR and lawsuits is moderated by advertising spending. Firms with high CSR that advertise heavily are buffered from lawsuits. Those firms with high CSR that maintain a low advertising profile, as well as those that focus their CSR efforts on social and environmental responsibility, tend to suffer more lawsuits. These results suggest that as a firm increases its CSR activities, it also increases its exposure to lawsuits, but differentiated products and good governance counter the increased risk. We posit that the positive relationship between CSR and lawsuits is likely a function of putting stakeholder concerns above shareholder concerns. The findings call for more research on the contingencies that affect the business case for CSR.

optimization. We apply our results to the highly non-convex optimal power flow problem. We offer several simulations on the nationwide Polish grid, for which we find near-global feasible solutions with global optimality guarantees of at least 99.9%. 2 - Computational Advances for Moment-based Relaxations of Optimal Power Flow Problems Daniel Molzahn, Dow Postdoctoral Fellow, University of Michigan, 1301 Beal Avenue, Room 4234A, Ann Arbor, MI, 48109, United States of America, dan.molzahn@gmail.com, Ian Hiskens Optimal power flow (OPF) is the key problem in operating electric power systems. A hierarchy of “moment-based” relaxations globally solves many non-convex OPF problems for which existing relaxations fail. After showing the capabilities of the moment relaxations, this presentation demonstrates how to exploit sparsity and selectively apply the higher-order relaxation to globally solve large problems. Other computational advances, including a mixed SDP/SOCP relaxation, are also discussed. 3 - Strong Socp Relaxations for the Optimal Power Flow Problem Andy Sun, Assistant Professor, Georgia Institute of Technology, 755 Ferst Drive, Atlanta, GA, 30332, United States of America, andy.sun@isye.gatech.edu, Burak Kocuk, Santanu Dey We propose three strong SOCP relaxations for the AC OPF problem. One of these relaxations is based on a new bilinear extended formulation of OPF. These three relaxations are incomparable to each other and two of them are incomparable to the standard SDP relaxation. Extensive computational studies show that these relaxations have several advantages over existing convex relaxations and provide a practical approach to obtain feasible OPF solutions with extremely good quality in real-time operation. SC62 62-Room 112A, CC Biofuel Supply Chain and Market Analysis Sponsor: ENRE – Environment I – Environment and Sustainability Sponsored Session Chair: Guiping Hu, Assistant Professor, Iowa State University, 3014 Black Engineering, Ames, IA, 50011, United States of America, gphu@iastate.edu 1 - An Optimization Model for Precision Farm Management Considering Water Resources Qi Li, Iowa State University, 0076 black engineering, Ames, IA, 50011, United States of America, qili@iastate.edu, Baskar Ganapathysubramanian, Guiping Hu An optimization model is formulated to study precision farm management. Genotype and phenotype of each crop are considered. In addition, soil fertility, water holding capability, and land slope have been incorporated. A case study for central valley in California has been conducted to validate the model considering the water constraints. 2 - A Bottom-up Equilibrium Model for Emerging Advanced Biofuel Market Leilei Zhang, Iowa State University, 3004 Black Engineering, Ames, IA, 50010, United States of America, leileizh@iastate.edu, Yihsu Chen, Guiping Hu We develop a bottom-up equilibrium model to study the interactions among the stakeholders in the biofuel supply chain. We analyze the effects of substitution on famers’ land allocation, biofuel production, blending, and market prices under a variety of market structures. Policies impacts are analyzed on biofuel markets and social welfares. 3 - A Real Options Approach to Study Investment Timing for Cellulosic Biofuels Yihua Li, Iowa State University, 3004 Black Engineering, Ames, IA, 50010, United States of America, yihuali@iastate.edu, Chung-li Tseng, Guiping Hu We present a real options approach to evaluate the investment of a new technology to produce cellulosic biofuels subject to construction lead times and uncertain fuel price. We conduct a case study on Iowa, in which the decision maker finds the optimal investment timing subject to production and distribution constraints.

SC60 60-Room 111A, CC Case Competition II Sponsor: INFORM-ED Sponsored Session

Chair: Palaniappa Krishnan, Associate Professor, University of Delaware, 212 Townsend Hall, 531 S.College Avenue, Newark, DE, 19711, United States of America, baba@udel.edu 1 - Temporary Staffing at Christie’s Qing Li, Associate Professor, HKUST, Department of ISOM, HKUST, Hong Kong, Hong Kong - PRC, imqli@ust.hk The case is based on an actual challenge faced by Christie’s Hong Kong, the Hong Kong subsidiary of the renowned auction house. For its biannual auctions, the company needs to hire 200 to 300 temporary sales assistants and assign them to different positions on different days. The human resources team believes that the current manual process of hiring and assignment is labor intensive and is unable to cope with sudden changes. They are looking to streamline the process and use decision tools. 2 - Distributions Strategies at Yaka Pharmaceuticals Kathleen Iacocca, University of Scranton, 439 Brennan Hall, Scranton, PA, United States of America, kathleen.iacocca@scranton.edu Yaka Pharmaceuticals, a large North American pharmaceutical manufacturing company, is considering changing their distribution strategy. Yaka Pharmaceuticals has four distribution options. The first option is the buy-and-hold contract, which was used by Yaka Pharmaceuticals and their distributors until recently. They moved away from this contract because the government issued a new law – the Sarbanes-Oxley Act, restricting the channel-stuffing accounting practice and distributor’s investment buying. Since then the Fee-for-Service (FFS) contract, initiated by the Big-Three distributors – AmerisourceBergen, Cardinal Health, and McKesson – has been the contract that is in place. Under the FFS contract, Yaka pharmaceuticals pays a fee to the distributors for their distribution services while everything else remains more or less the same as under the buy- and-hold contract. Executives at Yaka Pharmaceuticals are not happy with the additional fee for almost the same service they previously received free of charge. The third option is to work with 3rd party logistics service providers on distribution. Although it looks promising, Yaka may be traveling down uncharted waters as the 3rd party logistics providers are just emerging in the pharmaceutical industry and have yet to be widely accepted. Finally, a consulting company suggested the Fee-for-Distribution contract, which allows Yaka pharmaceuticals to work with existing distributors but under a different relationship which resembles that of a third party logistics contract. SC61 61-Room 111B, CC Optimal Power Flow in Electric Power Systems I Sponsor: ENRE – Energy I – Electricity Sponsored Session Chair: Andy Sun, Assistant Professor, Georgia Institute of Technology, 755 Ferst Drive, Atlanta, GA, 30332, United States of America, andy.sun@isye.gatech.edu 1 - Graph-theoretic Convexification of Power Optimization Problems Javad Lavaei, Assistant Professor, UC Berkeley, 4121 Etcheverry Hall, University of California, Berkeley, CA, 94720, United States of America, lavaei@berkeley.edu, Ramtin Madani The objective is to design efficient algorithms for finding a near-global solution of a power optimization problem. Our approach is based on the notions of OS- vertex sequence and treewidth in graph theory, matrix completion, and low-rank

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