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INFORMS Nashville – 2016
131
MA29
202A-MCC
Improving Supply Chain Responsibility Through
Regulation and External Actions
Sponsored: Manufacturing & Service Oper Mgmt, Sustainable
Operations
Sponsored Session
Chair: Robert Swinney, Duke University, Durham, NC, United States,
robert.swinney@duke.edu1 - Pollution Regulation And Market Structure: Equilibria, Profits
And Welfare Effects
Krishnan S Anand, University of Utah, 1655 E Campus Center Dr
Rm 7211, David Eccles School Of Business, Salt Lake City, UT,
84112, United States,
anand@eccles.utah.eduFrancois C. Giraud-Carrier
Opponents of pollution regulation claim that regulations choke businesses, hurt
welfare and destroy economic growth. We model two popular regulations— Cap-
and-Trade and Taxes— under imperfect competition, and prove that well-chosen
regulation can simultaneously improve firms’ profits, consumer surplus and
welfare. Further, firms can be induced to perfectly internalize their pollution
externalities, without being charged a penny in taxes. Our results suggest that the
paramount factor in framing pollution regulations should be their impact on
consumers rather than on producers.
2 - Extended Producer Responsibility (EPR) For Pharmaceuticals
Isil Alev, Boston College,
isil.alev@bc.eduAtalay Atasu, Beril L Toktay, Ozlem Ergun
Following their popularity for non-consumables, EPR-based implementation
models have gained traction for managing pharmaceutical overage. We analyze
the effectiveness of these models for pharmaceuticals, particularly Source
Reduction (SR) and End-of-Pipe Control (EC), by developing a game-theoretic
model of pharmaceutical chain with a focus on factors causing overage. We show
that the pharmaceutical context may imply stronger preference for adopting the
EC model as compared to non-consumables. We also show that an alignment of
stakeholder preferences for the model choices can be achieved under a larger set
of conditions for pharmaceuticals.
3 - Prevention Or Prosecution: An Analytical Approach To Modern
Slavery In Supply Chains
Shawn Bhimani, Duke University, Durham, NC, United States,
shawn.bhimani@gmail.comWe explore current human trafficking prevention schemes by modeling the
interaction between a regulator and a business. By analyzing the incentive
systems at play, we provide insights on how to effectively motivate integral
stakeholders in the fight against corrupted supply chains.
MA30
202B-MCC
Sustainable Operations I
Sponsored: Manufacturing & Service Oper Mgmt
Sponsored Session
Chair: Basak Kalkanci, Georgia Institute of Technology, Atlanta, GA,
United States,
basak.kalkanci@scheller.gatech.edu1 - Operational Challenges For Distributed Manufacturing In
Developing Countries
Andre Du Pin Calmon, INSEAD, Fontainebleau, France,
andre.calmon@insead.eduWe model and analyze a distributed manufacturing system set-up by a social
enterprise that produces fashion accessories in Kenya. This company selects and
works with a network of small artisan workshops with diverse characteristics in
terms of quality and production capacity. Furthermore, when adding a new
workshop to the network, there is uncertainty regarding that workshop’s features
and performance. We model the problem of allocating production orders to
workshops as a stochastic learning problem. We also allow for “fairness”
constraints, which encode the company’s social objectives. We illustrate the
performance of different allocation policies through numerical simulations.
2 - Sustainable Operations Versus Corporate Social Responsibility:
A Cross – Country Analysis Of Value Chain Transparency
Ryan Buell, Harvard Business School,
rbuell@hbs.eduBasak Kalkanci
We study the differential impact of transparency into a company’s sustainable
operations relative to transparency into its “extracurricular” CSR activities.
Through a series of cross-country experiments engaging participants in the US,
India, China, Bangladesh, Mexico, and Turkey, we explore whether stakeholders
respond more favorably to transparency that reveals sustainable operations (e.g.
reducing water consumption or paying a living wage) than to transparency that
reveals sustainable investments that fall outside the operation (e.g. donating an
equivalent amount of drinking water or investing an equivalent amount in the
community around a factory).
3 - A Dynamic Mechanism For Achieving Sustainable Supply Of High
Quality Products
Fang Liu, Nanyang Technological University, Singapore, Singapore,
Liu_Fang@ntu.edu.sg, Tracy Lewis, Jing-Sheng Jeannette Song
Several leading companies have realized the importance of sustainable quality
supply and have initiated programs to achieve it. This paper investigates whether
the guidelines in such programs provide the right incentives and information
structures for all parties to participate in order to achieve the intended long-term
goals.
4 - New Business Models For Industrial Park Operators
Ioannis Siskos, Kuhne Logistics University,
ioannis.siskos@the-klu.org,Luk N Van Wassenhove
Industrial parks operators (IPOs) are interested in symbiotic projects developed in
their parks. We use static monopoly and competition modelling in order to
explore the cost and pricing conditions under which by-product synergies that are
not realized by the candidate firms would be undertaken by the IPO.
MA31
202C-MCC
Energy and Commodity Merchant Operations
Sponsored: Manufacturing & Service Oper Mgmt, iFORM
Sponsored Session
Chair: Selvaprabu Nadarajah, College of Business, University of Illinois
at Chicago, 601 S Morgan St, Chicago, IL, 60607, United States,
selvan@uic.edu1 - Risk Neutral And Risk Averse Approximate Dynamic Programming
Methods For Bidding In The Energy Market
Daniel R. Jiang, University of Pittsburgh, Pittsburgh, PA, 15261,
United States,
drjiang@pitt.edu,Warren B Powell
In order to better assess the value of energy storage, we consider the problem of
bidding into an hour-ahead market with the goal of “trading” physical energy, i.e.,
performing energy arbitrage. We describe an approximate dynamic programming
method that exploits the monotone structure of the problem in order to obtain
near-optimal bidding strategies for a risk-neutral formulation of the objective
function. Additionally, in this application (and many others), it can be important
to incorporate risk-aversion into the decision making process. We discuss a
method that allows us to construct risk-averse bidding polices, optimized under
dynamic quantile-based risk measures.
2 - Keeping Options Open When Just One Can Be Exercised:
When To Pick A Winner
Daniel Ralph, University of Cambridge,
d.ralph@jbs.cam.ac.ukRutger-Jan Lange
Given several, costly R&D projects for low carbon electricity, when should be any
be abandoned to eventually pick the winner? We study parallel competing
projects where the performance of each project is governed by a general Ito
process, while opportunities to drop underperforming options (or select the
winner) follow a Poisson process. We show how to construct the option value as
the limit of an increasing sequence of lower bounds. This general
multidimensional theory underlies many complex real-world stopping decisions,
and offers the first opportunity to solve this class of problems optimally.
MA31