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INFORMS Philadelphia – 2015
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minimization problem to an equivalent convex one, and preserves some desired
structural properties such as convexity and L-natural-convexity. Three
applications are discussed.
2 - Some Specially Structured Assemble-to-order Systems
Paul Zipkin, Duke University, 100 Fuqua Drive, Durham, NC,
27708, United States of America,
Assemble-to-order systems are important in practice but challenging
computationally. This paper combines some notions from combinatorial
optimization, namely polymatroids and discrete convexity, to ease the
computational burden significantly, for certain specially structured models. We
point out that polymatroids have a concrete, intuitive interpretation in this
context.
3 - On A Stochastic Program for Inventory Control in
Assemble-to-order M Systems
Qiong Wang, University of Illinois at Urbana-Champaign,
104 South Mathews Ave., Urbana, IL, United States of America,
Martin I Reiman, Mustafa Dogru
We consider a two-stage stochastic program (SP) for developing inventory policies
for Assemble-to-Order M systems. The first stage SP prescribes a replenishment
policy and the second stage SP optimizes component allocation. We show that the
M system structure allows the SP to have desirable convexity properties and an
explicit form of the optimal solution. We also discuss whether these convenient
features can be preserved under various generalizations of the system structure.
4 - Conditions on Preservation of Supermodularity and
its Applications
Daniel Zhuoyu Long, Assistant Professor, The Chinese University
of Hong Kong, Shatin, N.T., Hong Kong - PRC,
, Xin Chen, Jin Qi
The concept of supermodularity has been proved to be a useful and an important
tool to derive monotone comparative statics in parametric optimization problems.
One critical concern is whether the supermodularity can be preserved under
dynamic programming recursions. In this paper, we provide necessary and
sufficient conditions for the preservation of supermodularity in several classes of
parametric optimization problems, and show how the theoretical results can be
applied in some OM problems.
WB50
50-Room 106A, CC
New Topics in Behavioral Operations
Sponsor: Manufacturing & Service Operations Management
Sponsored Session
Chair: Javad Nasiry, Assistant Professor, Hong Kong University of
Science and Technology, ISOM, LSK Building, HKUST, Hong Kong,
Hong Kong - PRC,
1 - The Value of Project Reviews with Reference Effects
Xiaoyang Long, PhD Student, Hong Kong University of Science
and Technology, Hong Kong - PRC,
Javad Nasiry
In uncertain environments, project reviews provide an opportunity to make
continue or abandon decisions in order to maximize the project’s expected payoff.
However, we show that a behaviorally biased project manager may opt not to
review the project and forgo the value of information provided by a review.
Further, the project manager may be more likely to launch and continue the
project in comparison to rationally optimal decisions.
2 - Price Competition in the Presence of Social Comparison and
Demand Uncertainty
Ming Hu, Associate Professor, University of Toronto, 105 St.
George Street, Toronto, Canada, ,
Yun Zhou
We consider a duopolistic price competition of differentiated substitutable
products under demand uncertainty, in which the duopoly socially compare with
each other. Conventional wisdom suggests social comparison leads to more
competitive behavior. We demonstrate how opposite-directional social
comparisons interact with demand variability to change competitive behavior.
These insights are robust under multiplicative demand uncertainty, but they are
reversed for complementary products.
3 - Optimal Stopping under Present-Biased Preferences
Peiwen Yu, Assistant Professor, Fudan University, Shanghai,
China, , Qing Li, Javad Nasiry
We study optimal stopping problems in which agents have present-biased
preferences. Agents may be naive and unaware of the bias or sophisticated and
aware. We establish the optimality of a threshold stopping policy under a set of
intuitive conditions. We show that sophistication may lead to counter-intuitive
decisions, but we also identify simple conditions that yield robust predictions on
sophisticated agents’ behavior. We apply our theory to models of project
management and healthcare.
4 - Behavioral Foundations and Antecedent Conditions of Service
Slowdowns (and Speedups)
Mirko Kremer, Professor, Frankfurt School of Finance &
Management, Room B135, 60314 Frankfurt am Main,
Frankfurt, Germany,
The assumption that service times are independent of system load is widespread
in the operations management literature, despite growing empirical and anecdotal
evidence to the contrary. We present some experimental evidence on behavioral
drivers and antecedent conditions of service slowdowns (and speedups) in
systems that are operated by human servers and/or customers.
WB51
51-Room 106B, CC
Supply Chain Outsourcing
Sponsor: Manufacturing & Service Operations Management
Sponsored Session
Chair: Morvarid Rahmani, Assistant Professor, Georgia Tech,
1 - Supply Networks for Relational Sourcing
Elena Belavina, University of Chicago Booth School of Business,
5807 S Woodlawn Ave, Chicago, IL, United States of America,
Socially responsible sourcing has become a necessity for many global firms and a
competitive advantage for others. Sourcing strategies based on social
responsibility now increasingly employ long-term commitments (relational
sourcing). This study examines the role that supply network configuration plays
in the efficacy of relational sourcing in ensuring socially responsible behavior
across the supply network (compliance).
2 - An Economic Model of Knowledge Outsourcing
Jaeseok Lee, Georgia Institute of Technology, 800 West Peachtree
NW, Atlanta, GA, 30308, United States of America,
, Karthik Ramachandran,
Cheryl Gaimon
We introduce a game-theoretic model of knowledge outsourcing. We study how
the interaction between a knowledge buyer and supplier is affected by two salient
aspects of knowledge outsourcing, which distinguish it from component
outsourcing: the buyer’s absorptive capacity, and the supplier’s ability to reuse
prior knowledge. We also investigate how uncertainty and information
asymmetry influence the equilibrium outcomes of knowledge outsourcing.
3 - Incentives in Contests with Heterogeneous Solvers
Soo-Haeng Cho, Associate Professor, Carnegie Mellon University,
5000 Forbes Ave, Pittsburgh, PA, 15213, United States of
America, Ersin Korpeoglu
In a crowdsourcing contest in which heterogeneous solvers make efforts to
develop solutions, existing theories predict different outcomes about how solvers
will change their efforts in response to increased competition (i.e., more entrants
to the contest). This paper presents a unifying model that encompasses different
types of heterogeneity, and offers a precise explanation about solvers’ rational
behavior. Our theoretical prediction is corroborated by empirical evidence.
WB52
52-Room 107A, CC
Retail Management II
Contributed Session
Chair: Shelby Koos, University of Miami, 268, McArthur Engineering
Building, Coral Gables FL 33146, United States of America,
1 - Optimal Contract Design in a Co-storing Arrangement
Lama Moussawi-Haidar, Assistant Professor, American University
of Beirut, P.O. Box 11-0236 Riad El Solh, Beirut, 1107, Lebanon,
, Nagihan Comez-dolgan
We study the optimal design of a revenue sharing agreement between two
retailers with complementary products, sharing the same retail location. The
landlord retailer rents outs some space to a tenant retailer. Each retailer has
his/her own random sales, dependent on effort levels of both retailers. We model
the problem as a double moral hazard and we show that a linear percentage rent,
consisting of a sales share and a based rent, achieves the second-best effort levels.
WB52