Informs 2015

190 / 552

INFORMS Philadelphia – 2015
188
MB47
47-Room 104B, CC
Environmentally Responsible Operations
Sponsor: Manufacturing & Service Oper Mgmt/Sustainable
Operations
Sponsored Session
Chair: Atalay Atasu, Associate Professor, Georgia Tech, 800, West
Peachtree Street, Atlanta, GA, 30318, United States of America,
1 - Extended Producer Responsibility (EPR) for Pharmaceuticals
Isil Alev, Georgia Tech, Atlanta, GA, United States of America,
Atalay Atasu, Ozlem Ergun, Beril Toktay
EPR-based approaches have gained traction for managing pharmaceutical
overage. In our work, we analyze the effectiveness of these approaches,
particularly Source Reduction and End-of-Pipe Control, by developing a game-
theoretic model of pharmaceutical chain with a focus on factors causing overage.
We uncover conditions for effective EPR implementation from the welfare
perspective and obtain critical factors determining stakeholder perspectives in the
pharmaceuticals context.
2 - Extended Producer Responsibility and Secondary Markets
Atalay Atasu, Associate Professor, Georgia Tech, 800, West
Peachtree Street, Atlanta, GA, 30318, United States of America,
, Vishal Agrawal, Isil Alev
EPR-based take-back legislation is the prevalent policy for several durable
products such as electronics. However, existing research on EPR ignores durable
nature of the products and secondary markets. Accordingly, we analyze EPR
implementations in the presence of secondary markets and provide policy
guidelines that can help improve the effectiveness of EPR.
3 - Optimal Service Infrastructure Planning for New Product Adoption
under Network Externality
Yiwei Wang, UC Irvine, 4293 Pereira Drive, Irvine,
United States of America, , Luyi Gui
Introducing services that complements a new product (e.g., charging service for
electric vehicles) can accelerate adoption of the new product. The success of such
strategies critically depend on how service infrastructure is deployed and adjusted
over the product’s life-cycle. We study this issue by a product diffusion analysis
and derive insights regarding the optimal deployment strategy for complementary
services.
4 - Lemons, Trade-ins, and Remanufacturing
Ximin (natalie) Huang, Scheller College of Business, Georgia
Institute of Technology, 800 West Peachtree, NW Atlanta,
Georgia, Atlanta, GA, United States of America,
, Atalay Atasu, Beril Toktay
Trade-in programs have been shown to partially mitigate the lemons problem in
secondary markets. In this paper, we show when and how remanufacturing
traded-in products can further improve the efficiency in secondary markets.
MB48
48-Room 105A, CC
Operations and Finance Interface
Sponsor: Manufacturing & Service Oper Mgmt/iFORM
Sponsored Session
Chair: Fehmi Tanrisever, Bilkent University, Bilkent, Ankara, Turkey,
1 - Effects of Downstream Entry in a Supply Chain with Spot Market
Xuan Zhao, Associate Professor, Wilfrid Laurier University,
75 University Avenue West, Waterloo, ON, Waterloo, Canada,
, Qi Zhang, Wei Xing, Liming Liu
This paper investigates the effect of downstream entry on a two-echelon supply
chain with risk-averse players in the presence of a spot market. We find that the
manufacturers consider three factors in deciding contract procurement quantities:
production, demand-hedging and speculation. Entry may decrease the contract
input price, and thus may not always benefit the supplier and hurt the incumbent
manufacturers, but it enhances the utilization of contract channel.
2 - Buyer-backed Purchase-order Financing for Suppliers Facing
Yield Uncertainty
Arun Chockalingam, Assistant Professor, Eindhoven University of
Technology, Den Dolech 2, Eindhoven, 5612AZ, Netherlands,
Matthew Reindorp, Richa Jain
We consider a retailer whose supplier is prone to severe yield shortfall. The threat
of shortfall entails that the supplier cannot independently finance production. In
a single period setting, we find that the retailer can increase profit for both parties
by offering a purchase order commitment that incorporates a (partial) loan
guarantee. We determine the retailer’s optimal commitment and the benefits for
both parties. We show how the commitment varies with the supplier’s yield
uncertainty.
3 - Integrated Risk Management in Commodity Markets
Fehmi Tanrisever, Bilkent University, Bilkent, Ankara, Turkey,
In this paper, we examine the integrated operating and financial hedging
decisions of a value maximizing firm, in the presence of capital market frictions.
We show that the working capital and the hedging policies of the firm interact
with each other in a multi-period dynamic inventory model. In particular, looser
working capital policies lead the managers to take relatively more speculative
position in the market to maximize firm value. This issue may also be mitigated
by asset based financing.
4 - The Midas Touch: Operational Flexibility and Financial Hedging in
the Gold Mining Industry
Panos Markou, IE Business School, Calle Maria de Moina 12
Bajo, Madrid, 28006, Spain, ,
Daniel Corsten
We examine the commodity risk management strategies of gold mining firms over
36 quarters. Miners use financial hedging and operational flexibility to mitigate
exposure to volatile gold prices. We find that, in line with theory, hedging reduces
firm profit variance and inventory levels. On the other hand, operational
flexibility increases profit variance and inventory. However, operational flexibility
becomes valuable when used in a complementary fashion with financial hedging.
MB49
49-Room 105B, CC
Sustainability in Supply Chains
Sponsor: Manufacturing & Service Oper Mgmt/Supply Chain
Sponsored Session
Chair: Suresh Muthulingam, Assistant Professor Of Supply Chain
Management, SMEAL College of Business, The Pennsylvania State
University, 460 Business Building, State College, PA, 16802,
United States of America,
1 - An Analysis of Time-based Pricing in Electricity Supply Chains
Asligul Serasu Duran, Northwestern University, Kellogg School of
Management, 2001 Sheridan Road, 5th Floor, Evanston, IL,
60208, United States of America,
, Baris Ata, Ozge Islegen
This study builds a framework for the retail electricity market to empirically
evaluate the impact of time-based tariffs on the electricity supply chain. We find
that optimal time-based tariffs reduce peak demand, but do not change
consumers’ electricity bills significantly. Time-of-use tariffs with predetermined
rates can capture most of the benefits of real-time prices. The environmental
impact of time-based tariffs depends on the characteristics of the electricity
market under study.
2 - An Empirical Investigation of Emissions Reductions under
Changing Assessments of Hazard
Wayne Fu, Georgia Institute of Technology, 800 West Peachtree
Street NW, Atlanta, GA, 30308, United States of America,
Basak Kalkanci,
Ravi Subramanian
Governmental organizations such as the CDC provide extensive public
information on potential hazards of industrial chemicals. We investigate facility-
level emissions reductions of chemicals in relation to changes in their assessments
over time. We also examine the effects of important external and internal factors
such as competition and operational leanness.
3 - The Role of Real-time Feedback on Conservation and Energy
Efficiency Adoption: An Empirical Study
Christian Blanco, UCLA Anderson School of Management,
Los Angeles, CA, United States of America,
Magali Delmas
Non-linear pricing schedules may make it difficult for consumers to know the
marginal price they currently pay for energy services. Our results show that
consumers that receive real-time information on marginal prices decrease
consumption by about 5 to 15%. We also show the relationship between
information and residential energy efficiency adoption.
MB47