Informs 2015

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INFORMS Philadelphia – 2015
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TD48
48-Room 105A, CC
New Directions at the Interface of Finance,
Operations, and Risk Management
Sponsor: Manufacturing & Service Oper Mgmt/iFORM
Sponsored Session
Chair: Gerry Tsoukalas, Assistant Professor, Wharton, 3730 Walnut
street, Philadelphia, PA, 19104, United States of America,
Co-Chair: Vlad Babich, Georgetown University, Washington, D.C.,
1 - Supply Chain Contract Design under Financial Constraints and
Bankruptcy Costs
Panos Kouvelis, Professor, Olin Business School, Washington
University in St. Louis, St. Louis, MO, United States of America,
, Wenhui Zhao
We study contract design in a supply chain of two capital constrained firms in
need of short-term financing. The failure of loan repayment leads to bankruptcy
with fixed and variable default costs. With only variable default costs, buyback
contracts remain equivalent to revenue-sharing contracts, which coordinate with
working capital adjustments. With fixed default costs, a revenue-sharing contract
with working capital coordination might have higher expected profit than the
one-firm system.
2 - Network Recovery using Transactional Information
John Birge, Professor, University of Chicago Booth School of
Business, 5807 S Woodlawn Ave, Chicago, IL, 60637,
United States of America,
Firms operate as components of complex networks of physical and financial
flows. The structure of these networks is however not easily observed. This talk
will discuss methodologies to uncover such hidden structure using inverse
optimization techniques.
3 - Does Operational Investment Vary with Capital Structure?
Vishal Gaur, Cornell University, 321 Sage Hall, Ithaca, NY, 14850,
United States of America, , Yasin Alan
We investigate the relationship between the operational investment of firms and
their capital structure choices using data for U.S. manufacturing and retail trade
sectors.
4 - Entrepreneurial Finance: Crowdfunding, Venture Capital, and
Bank Financing
Vlad Babich, Georgetown University, Washington, DC,
United States of America, ,
Gerry Tsoukalas
We study the interplay between bank financing, venture capital and
crowdfunding, in a multi-stage bargaining game, with double-sided moral hazard.
We find that while crowdfunding usually serves a positive role, enabling funding
for good projects, and avoiding investments in bad projects, it may also hurt VCs,
entrepreneur, and the society.
TD49
49-Room 105B, CC
Demand Driven Supply Chains
Sponsor: Manufacturing & Service Oper Mgmt/Supply Chain
Sponsored Session
Chair: Muge Yayla-Kullu, RPI, 110 8th St, Troy, NY, 12180,
United States of America,
1 - The Effect of Targeted Coupons on Product Quality Assortment
and Competition
Amit Eynan, Professor, University of Richmond, 1 Gateway Rd,
Richmond, VA, 23173, United States of America,
, Benny Mantin
Manufacturers who sell to customers with heterogeneous valuation of quality can
segment the market by offering multiple products at different qualities and prices.
We investigate the effect of targeted marketing efforts (coupons) on product line
assortment of a monopolist as well as under competition. While coupons help the
monopolist, in the competitive setting, we find that both firms end up exerting
marketing efforts but only one of them is better off whereas the other is worse
off.
2 - Competition and Perceptions of User Reviews
Michael Galbreth, Associate Professor Of Management Science,
Moore School of Business, University of South Carolina,
Columbia, SC, United States of America, ,
Pelin Pekgun, Bikram Ghosh
We analyze the interaction of user reviews and valuation uncertainty for
experience goods, with a specific focus on the potential for negative vs. positive
reviews to be weighted differently by consumers. The competitive impact of this
unequal weighting is not always intuitive. For example, we show that if a lower
quality firm has a large user base, overweighting of negative reviews can lead to
higher profits and higher prices in equilibrium than its higher quality competitor.
3 - Analysis of Consumers’ Purchase Timing Decisions
Emre Ertan, PhD Candidate, UT Dallas, Sm30 Jindal School of
Management, 800W Campbell Dr, Richardson, TX, 75080,
United States of America, , Kathy Stecke,
Ozalp Ozer
The consumer purchase timing decision is analyzed by using discounted expected
utility theory, where consumers act to maximize their utility over time. The
consumer’s sequential decision-making process is formalized under uncertain
product availability. An optimal purchase timing policy is identified in a market
environment, in which a strategic customer knows the markdown pricing
scheme, available inventory level, and remaining time to the end of the selling
horizon.
4 - Product Line Design and Capacity Management:
The Role of Consumer Behavior Uncertainty
Muge Yayla-Kullu, RPI, 110 8th St, Troy, NY, 12180,
United States of America, , Jennifer Ryan,
Jayashankar Swaminathan
We study the effects of uncertainty in consumer spending due to economic
volatility on the product line decisions of a firm with limited resources. We
consider a firm that offers products with differing qualities, unit production costs,
and resource consumption rates. Making capacity allocation decisions in the face
of such an uncertainty is challenging, demanding careful consideration of product
variety and available resources.
5 - A Manufacturer’s Outlet Decision: The Impact of Quality,
Innovation and Market Awareness
Jennifer Ryan, RPI, ISE, CII, Troy, NY, 12180,
United States of America, Daewon Sun
We consider a manufacturer of a luxury good who must determine whether to
sell products only through a manufacturer-owned retail store, or to also sell
products through the factory outlet store. We study how this decision depends on
the relative qualities of the products offered on the two channels, as well as the
manufacturer’s ability to innovate and introduce new product lines. In addition,
our multi-period model captures the impact of market share on the
manufacturer’s brand awareness.
TD50
50-Room 106A, CC
Supply Network Management: Collaboration
and Competition
Sponsor: Manufacturing & Service Operations Management
Sponsored Session
Chair: Hyoduk Shin, UC-San Diego, San Diego, CA,
United States of America,
1 - Optimal Procurement in Assembly Supply Chains:
Contracting Timing and Supplier Mergers
Bin Hu, Assistant Professor, UNC Kenan-Flagler Business School,
CB#3490 McColl Bldg, University of North Carolina, Chapel Hill,
NC, 27519, United States of America, Bin_Hu@kenan-
Anyan Qi
OEMs often procure components from several suppliers to assemble into
products. Such an OEM needs proportional component quantities, calling for a
coordinated procurement mechanism. We propose the use of two-part tariff
contracts for coordinated procurement. We further show that simultaneous and
sequential contracting are equivalent. Finally, we investigate the impact of a
supplier merger in an assembly supply chain.
TD48