Informs 2015

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INFORMS Philadelphia – 2015
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MD47
47-Room 104B, CC
Sustainability and Transportation
Sponsor: Manufacturing & Service Oper Mgmt/Sustainable
Operations
Sponsored Session
Chair: Ruben Lobel, Operations and Information Management
Department at The Wharton School of the University of Pennsylvania,
Jon M. Huntsman Hall 3730 Walnut Street, Office 568, Philadelphia,
PA, 19104, United States of America,
1 - Compete vs. Cooperate? A Strategic Game Behind the EV
Standards War
Ni Fang, HEC Paris, 1, Rue de la Liberation, HEC Paris, Jouy en
Josas, DI, 78351, France, , Marco Ceccagnoli
In the light of the standards war currently staged in electric vehicle (EV) industry,
this paper examines the strategic choice facing the two EV manufacturers as to
compete vs. cooperate for the development of an extensive charging
infrastructure, a key complementary asset mitigating EV range anxiety. In doing
so, this paper demonstrates EV manufacturers’ incentives towards standardization
and shows how standardization affects EV diffusion rate and firm’s performance.
2 - Food, Energy and Environment Trilemma: Land use Configuration
for Biofuel Industry Development
Michael Lim, University of Illinois, 1206 S. 6th Street,
Champaign, IL, 61822, United States of America,
, Yanfeng Ouyang, Xin Wang
We address the negative side effects of the rapid development of the biofuel
industry, which has caused extensive competition among food, energy, and the
environment in agricultural land use. Taking into account interactions among
multiple stake-holders (e.g., farmers, bioenergy firms, food industry,
government), we develop policy guidelines for coordinating subsidy and
mandates to better achieve sustainable development of this emerging bio-
economy.
3 - Socially Responsible Business Models for Off-grid Energy Access
Serguei Netessine, Professor, INSEAD, 1 Ayer Rajah Avenue,
Singapore, 138676, Singapore,
Bhavani Shanker Uppari, Ioana Popescu
One fifth of the humankind does not have access to electricity. They are mainly
poor and rely on unhealthy solid fuels (kerosene etc.) for lighting. Even though
cheaper rechargeable lighting technologies are available, their adoption is low and
some consumers still use kerosene. We propose a model which explains this
preference for kerosene and explore various business models which could alter
this preference.
4 - Technology Sharing in Two-sided Markets
Ozge Yapar, Doctoral Candidate, University of Pennsylvania,
Wharton School, Operations and Information Mgmt.,
Philadelphia, PA, 19104, United States of America,
, Lorin Hitt, Ruben Lobel
This paper investigates the drivers behind Tesla’s decision to make its patents
freely available to other electric car manufacturers. The two sides of this market,
car owners and potential charging stations, rely on each other to increase the
value of their investment. We show under what conditions subsidizing the
competitors can be profitable. By sharing technology, Tesla may be able to
improve the charging station network and increase its own profit from car sales.
MD48
48-Room 105A, CC
Operations/Corporate Finance Interface
Sponsor: Manufacturing & Service Oper Mgmt/iFORM
Sponsored Session
Chair: Vishal Gaur, Cornell University, 321 Sage Hall, Ithaca, NY,
14850, United States of America,
1 - How Do Information Spillover and Debt Financing Affect
Companies’ Innovation Decisions?
Jie Ning, Assistant Professor, Case Western Reserve University,
11119 Bellflower Rd, Cleveland, OH, 44106, United States of
America, , Volodymyr Babich
Information spillover alone leads to inefficient innovation equilibrium by
inducing companies to free ride. Debt financing alone also leads to inefficient
equilibrium by inducing companies to take excessive risks. This paper examines
the interaction of these two economic forces and shows that the presence of both
leads to either under-investment, over-investment, or social optimality.
2 - Systematic Risk and Mass Layoffs in the U.S. Manufacturing
Nikolay Osadchiy, Emory University, 1300 Clifton Rd NE,
Atlanta, GA, 30322, United States of America,
Suresh Dasari, Peeyush Taoiri,
Sridhar Seshadri
We study the role of systematic risk in jobs relocation decisions of manufacturers.
Using the mass layoffs data in the U.S. manufacturing sector for the period from
2002 to 2010, we explore the view voiced by a number of manufacturers that in
addition to cheap labor, systematic risk is also an important input in their
production decisions.
3 - Risk or Margin: The Role of Trade Credit in Competition
Heikki Peura, London Business School, Regent’s Park,
London, United Kingdom, , S. Alex Yang,
Guoming Lai
We analyze horizontal competition with and without trade credit under the
classic Bertrand framework. We find that when the competing firms are
financially constrained, trade credit allows them to soften price competition. We
further investigate the relationship between firms’ financial strength and their
physical production capacity, finding that with trade credit, financial constraints
are a partial substitute for the role that physical capacity plays in price
competition.
4 - Mental Cost Ratios and the Beer Game
Maximiliano Udenio, Technical University of Eindhoven,
Eindhoven, Netherlands, , Vishal Gaur,
Jan Fransoo
In this study we investigate the underlying behavior of beer-game players
through a series of experiments. We argue that players make decisions based,
partly, on a dynamic mental cost-ratio that fluctuates following multiple factors.
We use a structural estimation model to quantify the mental weighing of
underage and overage costs, and discuss several factors driving the decision
making.
MD49
49-Room 105B, CC
Supply Chain Operations
Sponsor: Manufacturing & Service Oper Mgmt/Supply Chain
Sponsored Session
Chair: Alp Muharremoglu, Associate Professor, University of Texas at
Dallas, 800 W Campbell Rd, Richardson, TX, United States of America,
1 - Using Retailer Order Commitments to Improve Supply
Chain Performance
Nagesh Gavirneni, Cornell University, Ithaca, NY,
United States of America, Nagesh Gavirneni
We establish that retailer order commitment strategies improve the efficiency of
decentralized distribution supply chains whenever the supplier’s cost is at lest
29.3% of the total supply chain cost. The effectiveness increases as the supplier’s
share of the total supply chain cost increases. We establish the robustness of these
results for settings with non-normal demand distributions, backlogging at the
supplier, and positive lead times between the supplier and the retailers.
2 - Can a Zero-margin Demand Stream Increase Profits?
Shaokuan Chen, The University of Texas at Dallas, 800 W.
Campbell Road,, Richardson, TX, 75080, United States of
America, , Ganesh Janakiraman,
Alp Muharremoglu
We consider a firm selling a non-perishable product in its primary market over
time with uncertain demand. Suppose a new opportunity arises from a secondary
market where the firm’s product can only be sold at a zero-margin. Moreover, the
firm is required to give priority to the demand from the secondary market. We
explore the following question: Can such a zero-margin opportunity increase the
firm’s profit, and if so, when?
3 - Mitigating Supply Chain Disruptive Risks: A Two-stage Robust
Optimization Approach
Peter Yun Zhang, Massachusetts Institute of Technology, 77
Massachusetts Avenue, Building E40-261, Cambridge, MA,
02139, United States of America, ,
Nikolaos Trichakis, David Simchi-levi
We present a model that captures two sets of decisions a supply chain risk
manager faces: the placement of inventory in preparation for supply disruption
and demand uncertainty, and the recourse decisions that coordinate capacity and
inventory allocation after the uncertain events unfold. We take a worst-case
perspective and analyze the problem via its Affinely Adjustable Robust
Counterpart.
MD49