2016 INFORMS Annual Meeting Program

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INFORMS Nashville – 2016
104
SD30
202B-MCC
Establishing Trust in Operations
Sponsored: Manufacturing & Service Oper Mgmt
Sponsored Session
Chair: Ryan Buell, Harvard Business School, Boston, MA, United
States,
1 - Managing Supplier Risks Via Diversification Versus Improvement:
An Experimental Evaluation
Basak Kalkanci, Scheller School of Management,
Using economic experiments, we evaluate the performance of supplier
diversification versus improvement to mitigate supply chain risks of a buyer
facing suppliers with different costs and risk profiles. We show that the buyers
diversify their orders more than theory and the orders are artificially inflated to
benefit from quantity hedging. We also demonstrate that sourcing commitment
may hurt a buyer by reducing the buyer’s supplier improvement effort, contrary
to theory.
2 - Understanding And Managing Customer-induced Negative
Externalities In Congested Self-service Environments
Hyun Seok Lee, University of North Carolina at Chapel Hill,
Chapel Hill, NC, 27514, United States, Hyunseok_Lee@kenan-
Saravanan Kesavan, Vinayak Deshpande
This paper identifies a new problem, i.e., the negative impact of congestion (using
archival data at retailer A), demonstrates the mechanisms driving the problem
(using observational data from field study at retailer B), proposes a solution to the
problem, and discusses its implementation at two different retailers (using field
experiments at retailers A and B). More importantly, we identify a new
phenomenon called thwarting behavior, defined as a systematic change in
customers’ behavior when they experience congestion that imposes negative
externalities on other customers.
3 - The Impact Of Decision Rights And Long Term Relationships
On Innovation Sharing
Ruth Beer, Indiana University, Kelley School of Business,
, Hyun-Soo Ahn, Stephen Leider
We study a supplier’s incentives to share an innovation with a buyer when
sharing the innovation increases efficiency but makes the supplier vulnerable to
the buyer sharing it with other suppliers. We show, both theoretically and
experimentally, that the supplier’s optimal decision depends on the length of the
relationship and in particular, on how the buyer allocates decision rights among
its employees.
SD31
202C-MCC
Issues in Supply Chains, Risk Management
and Finance
Sponsored: Manufacturing & Service Oper Mgmt, iFORM
Sponsored Session
Chair: Juan Camilo Serpa, McGill University, 1001 Rue Sherbrooke O,
Montreal, QC, H3A 1G5, Canada,
1 - Mitigating Disruption Cascades In Supply Networks
Nitin Bakshi, London Business School, London, United Kingdom,
, Shyam Mohan
The losses from supply chain disruptions arise not only due to direct damage at
firms, but also from the interruption of normal operations because of lack of
supply; that is, due to disruption cascades from suppliers in the adjacent tiers and
beyond. To curtail such losses, firms can make ex-ante investments in mitigation
and recovery strategies. In this paper, we use a game-theoretic approach to study
firms’ equilibrium investments, and the associated efficiency (in comparison with
the centralized benchmark), and its dependence upon network topology.
2 - Cancelability In Trade Credit Insurance
S. Alex Yang, London Business School, ,
Christopher J Chen, Nitin Bakshi
Trade credit insurance (TCI) is a risk management tool commonly used by
suppliers to guarantee against buyers defaulting when purchasing on credit. In
most TCI policies, the insurer can cancel this “guarantee” during the insured
period. We explore the role of cancelability in TCI. We find that the utility of
cancelability in TCI is linked to the insurer’s monitoring role (tracking the buyer’s
continued creditworthiness during the insured period, which enables the supplier
to make more efficient shipping decisions). Our findings help explain the
historical dominance of cancelable contracts in TCI, and they also offer insight
into the recent industry trend of offering non-cancelable TCI coverage.
3 - Trade Credit In Competition: A Horizontal Benefit
Heikki Peura, London Business School,
S. Alex Yang, Guoming Lai
Prior research has focused on how trade credit benefits firms by improving
vertical supply chain relationships. We offer a novel perspective by examining
whether trade credit benefits suppliers through a horizontal channel. Under the
classic Bertrand framework, we analyze two competing firms’ price decisions with
and without trade credit, and find that when the firms are financially constrained,
trade credit allows them to soften horizontal price competition. Studying the
firms’ optimal contract choice, we further find that this horizontal benefit of trade
credit may complement its vertical roles.
SD32
203A-MCC
Scheduling IV
Contributed Session
Chair: Yumei Huo, Associate Professor, City University of New York,
2800 Victory Boulevard, 1N 215, Staten Island, NY, 10314,
United States,
1 - An Improved Algorithm On Two-stage Scheduling With
An Outsourcing Option
Kangbok Lee, City University of New York, York College, 94-20
Guy R Brewer Boulevard, Queens, NY, 11451, United States,
, Xiaojuan Jiang, An Zhang, Yong Chen,
Guangting Chen
We consider a two-stage scheduling problem with an outsourcing option where
each operation can be outsourced. The objective is to minimize the sum of the
makespan and the total outsourcing cost where the outsourcing cost of an
operation is the product of the operation’s processing time and the unit processing
time cost of that stage. There was a study on Greedy algorithm with regard to the
worst-case analysis. In this work, by reanalyzing the Greedy algorithm, we derive
the tight worst-case performance ratio and proposed a new approximation
algorithm with a better worst case performance ratio.
2 - Can Distance-driven Online Scheduling Be Better
Than Order-driven?
KeLin Luo, Xi’an Jiaotong University, Xianning West Road 29,
Xi’an, 710049, China,
Taxi arrangement, instance delivery, and intra-city express has been considered as
a dispensable part of everyday life. The orders appear in real-time and in a certain
area. The serving net is established by summarizing the order’s properties,
including time distribution, periodic distribution, and regional distribution. Then
we can redefine the orders according their time and physical distances by special
numbers, such as non-increasing numbers. We presented an online algorithm and
verified the effectiveness and efficiency of this algorithm by comparing it with the
order-driven scheduling. We refrain from the myopia of local optimum or global
optimum accompanying with the substantial cost.
3 - A Dynamic Lot Sizing Based Discounted Cash Flow Model
Considering Working Capital Requirement Financing Costs
Thomas G Yeung, Associate Professor, Ecole des Mines de Nantes,
4 rue Alfred Kastler BP 20722, La Chantrerie, Nantes, 44307,
France, Yuan Bian,
David Lemoine, Nathalie Bostel-Dejax, Jean-Laurent Viviani,
Vincent Hovaleque
Companies always need free cash flow to efficiently react against uncertainty and
ensure solvency. However, classical dynamic lot-sizing models only consider the
physical flow of products. In this paper, we introduce a first link between the
dynamic lot-sizing problem and financial aspects of working capital requirements
(WCR). We propose a new generic WCR model along with a dynamic lot-sizing-
based discounted cash flow model for single-site, single-level, single-product and
infinite capacity cases. A polynomial algorithm is also presented with numerical
tests in order to compare our approach with the traditional dynamic lot-sizing
approach.
4 - Two Machine Scheduling Subject To Arbitrary
Machine Unavailability
Yumei Huo, Associate Professor, City University of New York,
2800 Victory Boulevard, 1N 215, Staten Island, NY, 10314,
United States,
We study two machine scheduling subject to arbitrary machine unavailability. The
jobs are resumable. We consider both the single criterion and the bi-criteria
problems concerning makespan and the total completion time. Liu and Sanlaville
have shown that makespan minimization problem is solvable in polynomial time,
leaving other three optimization problems still open: total completion time; total
completion time subject to the constraint that the makespan is minimum; and
makespan subject to the constraint that total completion time is minimum. In this
research, we show all these three open problems are in P by giving optimal
polynomial time algorithms.
SD30