2015 Informs Annual Meeting

MD50

INFORMS Philadelphia – 2015

4 - Package Size and Pricing Decisions with a Bulk Sale Option Ismail Kirci, PhD Student, University Of Texas at Dallas, 800 W. Campbell Road, Richardson, YX, 75080, United States of America, ixk130330@utdallas.edu, Alp Muharremoglu, Dorothee Honhon In this study we investigate package size and pricing decisions of a retailer for a perishable product. The retailer has the option of bulk sale, which is defined as selling the product in a container that allows customers to buy as much or as little as they want. MD50 50-Room 106A, CC Procurement, Auction, and Pricing Sponsor: Manufacturing & Service Operations Management Sponsored Session Chair: Zhixi Wan, Assistant Professor, University of Oregon, Eugene, OR, United States of America, zwan@uoregon.edu 1 - Optimal Descending Mechanisms for Constrained Procurement Shivam Gupta, PhD Candidate, UT Dallas, NJ School of Management, 800 W. Campbell Rd., Richardson, TX, 75080, United States of America, sxg104920@utdallas.edu, Milind Dawande, Ganesh Janakiraman, Wei Chen We propose optimal descending mechanisms for procurement under two practically-relevant feasibility constraints. We then show that both mechanisms belong to a larger class of descending mechanisms that are optimal for procurement under polymatroid feasibility constraints. 2 - Dual Sourcing Auctions for Unreliable Suppliers: with or Without Cost Distribution Information He Huang, Professor, Chongqing University, School of Economics and Business Admin., Chongqing, China, huanghe@cqu.edu.cn, Zhipeng Li, Hongyan Xu This paper examines dual-sourcing auctions for risk mitigation when a buyer faces uncertain demand and multiple unreliable suppliers with private cost information. Two scenarios involving three auction formats are considered, Generalized First-price Auction, Generalized English Auction and Optimal Auction with Learning. We separately design the above dual-sourcing auctions and then examine the buyer’s strategic choice. 3 - Using Procurement Service Providers in Supplier Screening Zhixi Wan, Assistant Professor, University of Oregon, Eugene, OR, United States of America, zwan@uoregon.edu, Sripad Devalkar A buyer engages a procurement service provider (PSP) to short-list pre-screened suppliers for final selection. The PSP can exert costly effort to include promising candidates that have a higher probability to be deemed qualified by the buyer. We solve the buyer’s joint optimization about the short-list size and the performance bonus. 4 - Dynamic Pricing with Product Returns Xing Hu, Assistant Professor, University of Oregon, Eugene, OR, United States of America, xingh@uoregon.edu We consider a monopolist’s dynamic pricing problem when the customers may stochastically return the purchased products. We study how the customers’ return speed and return probability affect the optimal pricing decisions. Applications of Operations Management to Pharmaceutical and Healthcare Industry Sponsor: Manufacturing & Service Operations Management Sponsored Session Chair: Zhili Tian, Assistant Professor, Florida International University, 11200 S.W. 8th Street, Miami, FL, United States of America, ztian@fiu.edu 1 - Process Flexibility with Inventory Yang Wang, UC Berkeley, IEOR Dept., Berkeley, CA, 48109, United States of America, yangwang0803@berkeley.edu, Philip Kaminsky Motivated by a capacity planning project undertaken with a biopharmaceutical firm, we explore the benefits of combining process flexibility with inventory to better respond to demand uncertainty. We consider a multi-plant multi-product multi-period supply chain model in which each plant is capable of producing multiple products as well as holding inventory, and characterize conditions under which inventory, flexibility, or a combination of the two are most beneficial. MD51 51-Room 106B, CC

2 - Optimal Investment in Support of Existing Drug and Development of New Drug Zhili Tian, Assistant Professor, Florida International University, 11200 S.W. 8th Street, Miami, FL, United States of America, ztian@fiu.edu Firms invest in the support of existing drug and R&D of new drug. While the investment fund comes from the net sales of the existing drug, a firm has to balance the investment in the two types of competing projects. We determine the optimal resource allocation between the marketing support of the existing product and developing a new product. We estimate the demand as function of investment in marketing. We derive the optimal investment policy for the above two types of investment. 3 - Nurse Staffing Decision in Nursing Homes Min Chen, Florida International University, 10200 SW 8th St, Miami, FL, 33199, United States of America, mchen2@fiu.edu Staffing is the dominant input in the production of nursing home services. This paper examined how skilled nursing facilities responded to the minimum nursing hours per resident day regulations. Panel data analyses of facility-level nursing inputs and outputs revealed that nursing homes strategically reallocated their staffing levels and skill mix, which could have important implications for quality management.

MD53 53-Room 107B, CC Behavioral Studies in Supply Chains and Revenue Management Sponsor: Behavioral Operations Management Sponsored Session

Chair: Jun Li, Assistant Professor, Ross School of Business, University of Michigan, 701 Tappan St, Ann Arbor, 48103, United States of America, junwli@umich.edu Co-Chair: Xiaobo Zhao, Professor, Tsinghua University, Shunde Building, Beijing, China, xbzhao@mail.tsinghua.edu.cn, Beijing, China 1 - Does Elicitation Method Matter? Behavioral and Neuroimaging Evidence from Capacity Allocation Game Yukun Zhao, Department of Industrial Engineering, Tsinghua University, Department of Industrial Engineering, Tsinghua University, Beijing, 100084, China, zhaoyk1989@gmail.com, Lihong Wang, Yefen Chen, Xiaobo Zhao Based on the allocation game, we conduct a normative-behavioral experiment and a neuroimaging experiment by adopting fMRI technique to investigate the elicitation-method effect under the direct-response method and the strategy method. No significant difference is observed in either ordering behaviors or brain activities between the two elicitation methods. Our results indicate that in multi- round game experiments without emotion features, the elicitation-method effect is not likely to exhibit. 2 - Transparency and Indirect Reciprocity in Social Responsibility: An Incentivized Experiment Leon Valdes, Massachusetts Institute of Technology, Cambridge, MA, United States of America, lvaldes@mit.edu, Tim Kraft, Karen Zheng We design an incentivized experiment to study the impact of transparency on consumers’ valuations of a firm’s social responsibility practices. We investigate how much of consumers’ valuations can be attributed to indirect reciprocity. We also analyze how heterogeneity in prosocial orientation impacts the roles of transparency and indirect reciprocity. Our results demonstrate that consumers are willing to pay a higher price under a higher level of transparency. 3 - Social Influence and Quality Competition: An Experimental Study Dayoung Kim, Cornell University, 301A, 114 East Avenue, Ithaca, NY, 14850, United States of America, dk668@cornell.edu, Vishal Gaur, Andrew Davis We investigate the impact that different types of social information have on the market share and demand uncertainty of firms competing through service quality. In particular, we conduct a lab experiment, where a consumer chooses to visit one of two firms, which differ in their average service quality. Our results suggest that the presence and type of social information can dramatically impact the consumers’ decisions, a firm’s market share and demand uncertainty.

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