2015 Informs Annual Meeting

WC53

INFORMS Philadelphia – 2015

WC51 51-Room 106B, CC

2 - Socio-demographic Characteristic Associated with the Location of Organic and Local Food Stores Amir Ghiasi, PhD Student, University of South Florida, Department of Civil and Environmental Engineering, 4202 E. Fowler Avenue, Tampa, FL, 33620, United States of America, amirghiasi@mail.usf.edu, Guangqing Chi, Chuo Li, Xiaopeng Li In this study, physical accessibility to organic and local food is examined relative to socio-demographic factors in New Orleans, LA. Linear and spatial regression models are adopted to investigate how the socio-demographic variables correlate with the distance of driving, biking, or walking to the stores. Results show that accessibility to organic food stores is more in denser areas and areas with more African-Americans, Hispanics and more educated people. WC53 53-Room 107B, CC Behavioral Issues in Supply Chains Regarding Quality and Competition Sponsor: Behavioral Operations Management Sponsored Session Chair: Yinghao Zhang, Assistant Professor, Salisbury University, 1101 Camden Avenue, Salisbury, MD, 21801, United States of America, YXZhang@salisbury.edu Co-Chair: Diana Wu, University of Kansas, Lawrence, United States of America, dianawu@ku.edu 1 - The Decision to Recall: A Behavioral Investigation in the Medical Device Industry George Ball, PhD Candidate, University of Minnesota, 321 19th Ave. S, Minneapolis, MN, 55455, United States of America, ball0197@umn.edu, Karen Donohue, Rachna Shah Using a unique managerial subject pool with significant experience in product recall decision-making, this study identifies factors that impel medical device industry managers to decide to recall. We then incorporate a well-established Cognitive Reflection Test (CRT) to highlight sources of individual heterogeneity among recall decision-makers. The results of this study inform decision-making literature and may be able to improve the product recall decision-making process. 2 - Should Suppliers Bear the Qualification Costs? Theory and Experiments Wei Chen, Assistant Professor, The University of Kansas, 1450 Jayhawk Blvd, Lawrence, KS, 66045, United States of America, wei.chen@ku.edu, Milind Dawande, Ganesh Janakiraman, Elena Katok A firm needs to source from a fixed-size pool of yet-to-be qualified suppliers for an indivisible contract. The contract can only be awarded to a supplier who passes a costly qualification test. Using the theory of optimal auction design and lab experiments, we investigate the following questions: Should suppliers bear the qualification costs in mechanisms that are optimal for the buyer? If suppliers are asked to bear these costs, should the buyer reimburse them in any way? 3 - Social Comparison and Pull-to-Center in Newsvendor Contests Valery Pavlov, The University of Auckland, Private Bag 92019, Auckland, New Zealand, v.pavlov@auckland.ac.nz, Nagesh Gavirneni, Tony Lin We study a game of two newsvendors competing for a fixed bonus. Its most prominent feature is that the game is non-transitive (similar to Rock-Paper- Scissors), and the best-response is almost always “to order a quantity a bit closer to the mean than the competitor’s”. We test our model predictions experimentally and (i) find that a pull-to-center dynamics can emerge due to social comparison, and, (ii) find that friendship may be ineffective in mitigating competitive effects of social comparison. 4 - Perceived Versus Actual Value of Product Substitution Flexibility Brent Moritz, Assistant Professor, Supply Chain Management, Pennsylvania State University, 469 Business Bldg., University Park, PA, 16802, United States of America, bmoritz@psu.edu, Saurabh Bansal Using behavioral decision-making experiments for inventory of substitutable products, we investigate how decision-makers perform when estimating the value of operational flexibility of product substitution. Subjects consistently overestimated the monetary value of product substitution, and this is related to behavioral biases when estimating the conjunctive probability of substitution. We demonstrate a probability decomposition-based approach to mitigate this overestimation.

Consolidation and Asymptotics in Inventory Sponsor: Manufacturing & Service Operations Management Sponsored Session Chair: Stefanus Jasin, Stephen M. Ross School of Business, University of Michigan, Ann Arbor, United States of America, sjasin@umich.edu Co-Chair: Linwei Xin, Assistant Professor, University of Illinois at Urbana-Champaign, 104 S. Mathews Ave., Urbana, IL, 61801, United States of America, lxin@illinois.edu 1 - Centralized and Decentralized Warehouse Logistics Collaboration Shiman Ding, UC Berkeley, IEOR Dept., Berkeley, CA, 94720- 1777, United States of America, shiman@berkeley.edu, Philip Kaminsky An emerging paradigm for logistics collaboration in the grocery industry centers on large third-party warehouses that multiple suppliers use as warehouses or mixing centers, and from which multiple retailers order mixed-product truckloads. We explore centralized and decentralized strategies for operating shared warehouses, and characterize the loss due to decentralized operation. 2 - Shipment Consolidation for Online Retailers Lai Wei, Stephen M. Ross School of Business, 701 Tappen Ave, Ann Arbor, MI, 48109, United States of America, laiwi@umich.edu, Roman Kapuscinski, Stefanus Jasin The online retailers have a significant flexibility how to satisfy multiple orders for customers. An existing order can be strategically delayed to combine with future orders, such that a single shipping cost can be incurred for multiple orders. But delaying the shipment increases the shipping cost itself, as shorter remaining time requires expedited shipping. We characterize the structure of the optimal policy and use such insights to construct easily implementable near-optimal heuristics. 3 - Asymptotic Optimality of Tailored Base-Surge Policies in Dual-Sourcing Inventory Systems Linwei Xin, Assistant Professor, University of Illinois at Urbana- Champaign, 104 S. Mathews Ave., Urbana, IL, 61801, United States of America, lxin@illinois.edu, David Goldberg Dual-sourcing inventory systems are notoriously difficult to optimize. Recently, so-called Tailored Base-Surge policies have been analyzed in Allon and Van Mieghem(2010) and Janakiraman et al.(2014). Although numerical results have suggested that such policies perform well as the lead time difference grows large, providing a theoretical foundation for this phenomenon has remained a major open problem. In this talk, we resolve this open problem by proving asymptotic optimality of such policies. 4 - Replenishment Policies in Assemble-to-order Inventory Systems with Non-identical Lead Times Martin I Reiman, Bell Labs, 600 Mountain Ave., Murray Hill, NJ, 07974, United States of America, martyreiman@gmail.com, Haohua Wan, Qiong Wang In Assemble-to-Order systems, the use of one component often depends on the availability of others. Thus ordering decisions for components with shorter lead times should be coordinated with decisions made at earlier times for those with longer lead times. The independent base stock policy does not have this feature and we will assess the impact of this deficiency on the inventory cost. We will also explore alternative policies that improve an asymptotic-optimality criterion. WC52 52-Room 107A, CC Retail Management III Contributed Session Chair: Amir Ghiasi, PhD Student, University of South Florida, Department of Civil and Environmental Engineering, 4202 E. Fowler Avenue, Tampa FL 33620, United States of America, amirghiasi@mail.usf.edu 1 - The Prepack Optimization: A Case Study of a Korean Fashion Retailer Shin Woong Sung, KAIST, 291 Daehak-ro, Yuseong-gu, Daejeon, Korea, Republic of, sw.sung@kaist.ac.kr, Young Jae Jang This study considers a real-world inventory packing and distribution problem called “PrePack Optimization Problem (POP)” at the largest outdoor-fashion retailer in Korea, KOLON SPORT (K/S). We formulate a mathematical programming model for POP and propose a solution approach which can be efficiently utilized at K/S. The field experiments, conducted for two seasons, revealed that the approach remarkably improved the inventory stability.

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