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INFORMS Nashville – 2016
158
MB29
202A-MCC
Incentive Mechanisms and Sustainability
Sponsored: Manufacturing & Service Oper Mgmt,
Sustainable Operations
Sponsored Session
Chair: Xi Chen, University of Michigan-Dearborn, 2290 HPEC, 4901
Evergreen Rd, Dearborn, MI, 48128, United States,
xichenxi@umich.edu1 - Distribution Strategies For Supporting Poor Retailers In
Developing Countries
Luyi Gui, The Paul Merage School of Business, UC Irvine,
luyig@uci.eduWe analyze cooperative distribution strategies for supporting poor retailers in in
the rural areas of developing countries that lack efficient infrastructure and
distribution channels. We examine the effectiveness of two distribution strategies
that are widely observed in practice: (1) purchasing cooperatives, (2) non-profit
wholesaler. In particular, we consider how these mechanisms can promote the
number of poor retailers and consumer welfare.
2 - The Impact Of Product Design On Closed Loop Supply Chain
Coordination: Incentives For Input Material Reduction Vs.
Enhanced Recycling
Tolga Aydinliyim, Baruch College,
Tolga.Aydinliyim@baruch.cuny.edu,Eren Basar Cil,
Nagesh N Murthy
We consider a setting wherein a buyer procures standard-size forgings from a
supplier, and performs machining, which yields final components and significant
scrap. Adopting a principal-agent framework, we investigate coordination
implications while accounting for information asymmetry issues, and find that
improved recycling across the supply chain can significantly mitigate
decentralization cost.
3 - The Effectiveness Of Consumption- Versus Production-based
Emission Tax Under Demand Uncertainty
Xi Chen, University of Michigan-Dearborn,
xichenxi@umich.eduIn recent years, there has been a debate on whether emission taxes should be
imposed at the points of production or directly at points of consumption. We
investigate this important issue through a system that integrates tax mechanism
design decision of the policy maker, with the production, pricing, and emission
reduction decisions of a manufacturer, as well as the price sensitivity and demand
uncertainty of consumers.
4 - Incentives And Emission Responsibility Allocation In
Supply Chains
Sanjith Gopalakrishnan, University of British Columbia,
Vancouver, BC, Canada,
sanjith.gopalakrishnan@sauder.ubc.ca,Daniel Granot, Frieda Granot, Greys Sosic, Hailong Cui
Given an assignment, by a dominant supply chain leader, for direct and indirect
responsibilities of GHG emissions to the various firms in a supply chain, we adopt
cooperative game theory to derive a responsibility allocation, which is the
Shapley value of an associated cooperative game. It satisfies several desirable
properties - (i) it is easy to compute, (ii) it is uniquely characterized by some
compelling axioms, and (iii) among all footprint balanced allocations, it
incentivizes firms to exert abatement efforts that minimize the maximum
deviation from the socially optimal pollution level.
MB30
202B-MCC
Sustainable Supply Chains
Sponsored: Manufacturing & Service Oper Mgmt
Sponsored Session
Chair: Vishal Agrawal, Georgetown University,
37th and O Streets, Washington, DC, 20057, United States,
Vishal.Agrawal@georgetown.edu1 - An Analysis Of Recycled Content Claims Under Demand Benefit
And Supply Uncertainty
Aditya Vedantam, State University of New York at Buffalo,
Buffalo, NY, United States,
adityave@buffalo.edu,Ananth V Iyer,
Paul Lacourbe
We investigate the drivers of a manufacturer’s recycled content claim decision
under demand benefit for recycled content and uncertainty in municipal supply.
Two types of claims are identified - batch specific and batch average. We compare
both types of claims and impact on manufacturer profit, recycled input and raw
material usage. We parameterize our model to the fiberglass insulation industry
and suggest insights.
2 - How Does Precision Affect The Adoption Of Energy Efficiency
Practices? - Evidence From The Field And Laboratory Data
Suresh Muthulingam, The Pennsylvania State University,
State College, PA, United States,
suresh@psu.edu, Saurabh Bansal
This study aims to provide a comprehensive picture of how precision can affect
the adoption of energy efficiency initiatives. We utilize three studies that start by
establishing the impact of precision on the adoption of energy efficiency initiatives
and then examine the mechanisms that govern how precision affects the
adoption decisions. We find that precision has a positive impact on the adoption
of energy efficiency practices. Additionally, the impact of precision is more
pronounced in the presence of budgetary constraints. Finally, we identify trust as
an important moderator of the precision effect.
3 - Government Subsidies For Green Technology Development Under
Technology Uncertainty
Seung Hwan Jung, Washington University in St. Louis, St Louis,
MO, United States,
seunghwan.jung@wustl.edu,Tianjun Feng,
Fuqiang Zhang
This paper investigates the subsidy design problem for green technology
development by firms in an evolving market. We find that the subsidy plays a key
role in improving social welfare under different industry environments. We also
derive insights into how the subsidy policy affects firms’ operational strategy.
4 - Price Vs. Revenue Protection: An Analysis Of Government
Subsidies In The Agriculture Industry
Foad Iravani, University of Washington, Seattle, WA, United
States,
firavani@uw.edu, Saed Alizamir, Hamed Mamani
The agriculture industry plays a critical role in the U.S. economy and various
industry sectors depend on the output of farms. To protect farmers’ income, the
U.S. government offers two subsidy programs to farmers: the PLC program which
pays farmers a subsidy when the market price of a crop falls below a reference
price, and the ARC program which pays a subsidy when a farmer’s revenue is
below a guaranteed level. We develop models to analyze the effects of these
programs on consumers, farmers, and the government. We calibrate our model
with USDA data and provide insights about the effects of crop characteristics and
market characteristics on the relative performance of PLC and ARC.
MB31
202C-MCC
Operations and Finance Interface
Sponsored: Manufacturing & Service Oper Mgmt, iFORM
Sponsored Session
Chair: Fehmi Tanrisever, Bilkent University, 6800 Bilkent,
Ankara, Turkey,
tanrisever@bilkent.edu.tr1 - Mitigating Disruption Risks In Delivery Supply Chains To Serve
Contracted Customers
Mert Hakan Hekimoglu, Rensselaer Polytechnic Institute, Troy, NY,
United States,
hekimm@rpi.edu, John H Park, Burak Kazaz
Motivated by an implementation in a Fortune 150 company, this paper helps a
firm determine its capacity expansion decisions as a mitigation strategy against
disruptions in a delivery supply chain. We formulate the firm’s capacity planning
problem using a two-stage stochastic model. While risk aversion generally leads to
an increase in capacity investment, we find a surprising result that capacity may
decrease with risk aversion. Our capacity expansion model is projected to make a
48% savings in the total expected operating costs stemming from disruptions
under risk aversion.
2 - Competitiveness Of Supply Chains: A Financial
Market Perspective
Gerd J. Hahn, German Graduate School of Management and Law,
Heilbronn, Germany,
gerd.hahn@ggs.de, Jochen Becker
In this paper, we analyze supply chain performance across various industries
using financial statement and stock market data. By this means, we identify
relevant value drivers from a supply chain perspective and show their impact on
market valuation.
3 - Managing Price And Demand Risk In Flour Milling
Fehmi Tanrisever, Bilkent University, Bilkent University,
Merkez Kampus Lojmanlari 80/5, Ankara, 06800, Turkey,
tanrisever@bilkent.edu.tr, Junchi Tan, Zumbul Atan
We explore the value of downward substitution under stochastically evolving
exogenous prices. In particular, we consider a multi-period inventory problem, in
which a firm procures two kinds of substitutable inputs to be blended at a certain
ratio to produce and sell a final output whose demand and price are uncertain. In
this setup, we establish the conditions for the optimality of a base-stock policy
and derive the optimal myopic policy for a firm’s procurement and substitution
decisions.
MB29