Informs 2015

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INFORMS Philadelphia – 2015
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4 - The Bright Side of Managerial Overconfidence
Juan Li, Assistant Professor, Nanjing University, No. 5 Ping Cang
Xiang, Nanjing, China, , Baojun Jiang,
Fuqiang Zhang
Managers are often overconfident about the accuracy of their demand forecast.
This paper shows that the firm may actually benefit from such overconfidence
bias whether or not its competitor has such bias. Further, such bias can lead to a
win-win situation for both competing firms.
TC54
54-Room 108A, CC
Discrete Optimization Models for Homeland Security
and Disaster Management
Cluster: Tutorials
Invited Session
Chair: Laura Mclay, Associate Professor, University of Wisconsin,
1513 University Ave, ISYE Department, Madison, WI, 53706,
United States of America,
1 - Discrete Optimization Models for Homeland Security and
Disaster Management
Laura Mclay, Associate Professor, University of Wisconsin,
1513 University Ave, ISYE Department, Madison,WI, 53706,
United States of America,
Preparing for and responding to disasters, including acts of terrorism, is an
important issue of national and international concern. Recent disasters
underscore the need to manage disasters to minimize their impact on critical
infrastructure and human suffering. In this tutorial, we survey the operations
research literature that develops, analyzes and applies discrete optimization
models to effectively mitigate, prepare for, respond to and recover from a wide
variety of disasters.
TC55
55-Room 108B, CC
Outsourcing I
Contributed Session
Chair: Ting Luo, University of Texas at Dallas, 800 W Campbell Rd,
Richardson, TX, 75080, United States of America,
1 - Outsourcing Supplier Selection: Quality-driven Demand and
Taguchi Loss Function
Yanni Ping, Drexel University, 3220 Market Street, Gerri C.
LeBow Hall 730, Philadelphia, PA, 19104, United States of
America, , Seung-lae Kim, Min Wang
Facing limited capacity, a manufacturer would often rely on external suppliers.
How to select suppliers to work with becomes a strategic decision particularly
when demand for the final product is quality driven. In this talk, we adopt a
Taguchi loss function as a supplier’s quality measurement and present a dynamic
programming model to explore how supplier quality affects manufacturer’s
outsourcing strategy. We propose simple and efficient algorithms for supplier
selection in a dynamic setting.
2 - Fixed Entry Cost Effect on Contract Length and Renewals in a
Maintenance Service Contract Systems
Rodrigo Ulloa, Pontificia Universidad Católica de Chile, Av.
Vicuña Mackenna 4860, Santiago, Chile, ,
Alejandro Mac Cawley, Rodrigo Pascual, Gabriel Santelices
We analyze how the inclusion of a fixed entry cost will affect the decision making
of a maintenance contract, using a model that evaluates the contract value for the
vendor according to the contract duration and its renewals. The analysis considers
different scenarios that show the existence of a relationship between the length of
the contract and the amount of renovations from which the contract is valuable
for the vendor.
3 - Long-term Outsourcing under Stochastic Learning and
Information Asymmetry
Ting Luo, University of Texas at Dallas, 800 W Campbell Rd,
Richardson, TX, 75080, United States of America,
Suppliers can reduce their cost through learning by doing, however their learning
abilities and outcomes are kept as private information. When buyers design the
procurement contract, they must consider the above effects. We study the
interplay of stochastic learning and information asymmetry. We show that the
stochastic learning has a profound impact on the optimal contract.
4 - Opportunism in Manufacturing Outsourcing
Keith Skowronski, The Ohio State University, Fisher 251A, 2100
Neil Avenue, Columbus, OH, 43210, United States of America,
W. C. Benton
Using dyadic buyer-supplier data, we empirically examine two types of supplier
opportunism, poaching and shirking, in manufacturing outsourcing relationships.
In this multi-country study, the legal environment of the supplier’s location is
hypothesized to moderate the relationships between exchange hazards, relational
governance mechanisms and the different forms of opportunism.
5 - Suppliers as Liquidity Providers
Panos Markou, IE Business School, Calle Maria de Moina 12
Bajo, Madrid, 28006, Spain,
Daniel Corsten
Using a novel dataset comprising the top 10 suppliers of more than 80,000 public
and private companies, we examine the value of having a supplier that is not
financial constrained. For financially constrained customers, holding cash is costly.
However, we show that having even one financially unconstrained supplier
allows these customers to “outsource” some of their cash holdings. Financial
standing is an important consideration when choosing suppliers.
TC56
56-Room 109A, CC
Commercialization of New Technologies
Cluster: New Product Development
Invited Session
Chair: Karthik Ramachandran, Georgia Institute of Technology, 800
West Peachtree NW, Atlanta, GA, 30308, United States of America,
Co-Chair: Sreekumar Bhaskaran, SMU, Dallas, TX,
United States of America,
1 - Product Line Design for Strategic Customers
Saurabh Bansal, Assistant Professor, Penn State Univrsity, 405
Business Building, University Park, PA, 16802, United States of
America, , Karthik Ramachandran
We report results for optimal product line design when customers are strategic
about uncertain quality of products. Our analysis explains evolution of product
lines observed in practice.
2 - Licensing Contracts: Control Rights and Options
Niyazi Taneri, SUTD, 8 Somapah Rd, Singapore, Singapore,
, Pascale Crama, Bert De Reyck
Research and development (R&D) collaborations, though common in high-tech
industries, are challenging to manage due to technical and market risks as well as
incentive problems. We investigate the impact of control rights, options, payment
terms and timing decisions on R&D collaborations between an innovator and a
marketer. We provide recommendations on the optimal contract structure and
timing based on the R&D project characteristics.
3 - Does Equity Crowdfunding Improve Entrepreneurial
Firm Performance?
Susanna Khavul, UTA/London School of Economics, London,
United Kingdom, , Saul Estrin
As a fast moving financial innovation, equity crowdfunding may relax resource
constraints for new ventures. Using four years of proprietary data, we model how
information provision, generation, and exchange affects the supply of funds and
likelihood of pitch funding. We evaluate this against the survival and performance
of the firms that sought funding.
TC56