2016 INFORMS Annual Meeting Program

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INFORMS Nashville – 2016
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3 - Service Systems With Coarse Priorities: The Social Cost Of
Revenue Maximization
Martin Lariviere, Northwestern University,
2001 Sheridan Rd, Evanston, IL, 60208, United States,
, Itai Gurvich, Can Ozkan
We consider how social maximization differs from revenue maximization in a
queuing system in which a continuum of customer types is mapped to a finite
number of priority classes. The decision maker controls coverage (how many
customers to serve), coarseness (how many priority levels to offer), and
classification (how types are assigned to classes). We show that both types of
decision makers provide similar coverage and coarseness. They differ in how they
split customers between classes. Relative to the social planner, the revenue
maximizer may have the highest priority class over- or undersubscribed
depending on the behavior of the distribution of customer values.
4 - Learning In Online Matching Platforms: Multi-armed Bandits With
Capacity Constraints
Vijay Kamble, Stanford University, Stanford, CA, 9, United States,
We consider the interaction between two central operational challenges for
almost any matching platform: on the one hand, new users are continuously
arriving, and the platform’s goal is to learn the attributes of these users quickly
enough to ensure satisfactory matches. On the other hand, learning these
attributes typically requires experimenting with matches and observing the
outcomes, which is difficult since the supply of entities to be matched to is
limited. In this paper we address the correct balance between these activities in
such two-sided matching platforms, in the presence of supply constraints.
TA36
205B-MCC
Operations and Supply Chains for Innovative Goods
Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain
Sponsored Session
Chair: Robert Swinney, Duke University, Durham, NC, United States,
1 - Promoting Innovative Technology In Developing Countries
Through Solution-based Contracts
Guangrui Ma, Tianjin University, Tianjin, China,
, Ying-Ju Chen, Hau Leung Lee
Limited knowledge and lack of proper skills make potential users reluctant to
purchase innovative technology, e.g., drip irrigation systems, even though it can
improve yields incredibly. We show that through solution-based service, firms can
help farmers, especially in developing countries, overcome the above knowledge
barrier of using the technology, thus leading to higher market adoption and
profitability. Besides, a yield-based payment structure can facilitate efficient
financial cost saving when farmers face financial constraint, and hence
incentivises farmers’ adoption further more.
2 - Designing Supply Chains For Substitutable Digital And
Physical Goods
Zhenhuan Lei, Duke University,
Robert Swinney
We consider a firm selling two partially substitutable goods, one digital and one
physical, e.g., a downloadable and DVD version of the same movie. The physical
good is characterized by non-zero marginal production cost, positive production
leadtime, and, potentially, a mismatch between supply and demand. The digital
good is characterized by zero marginal cost and no inventory constraints. We
consider how market and product characteristics drive the firm to price each
product, determine inventory, choose a selling strategy involving one or both
goods, and design its supply chain.
3 - Dynamic Stimulus In Crowdfunding
Longyuan Du, University of Toronto, Toronto, ON, Canada,
Ming Hu, Jiahua Wu
We study the dynamics of online crowdfunding in which a campaign would fail
unless a predetermined funding goal is achieved within a given duration. We
demonstrate empirically using KickStarter data the significant benefit of
dynamically offering stimulus. Motivated by the empirical results, we build a
theoretical model to analyze several policies, such as seeding, feature upgrade and
promotional discount, and provide the optimal timing of stimulus offerings
depending on time- and pledge-to-go. We then illustrate the stimulus policies’
benefits using failed projects from Kickstarter.
4 - Food Wastage In Commercial Kitchens
Varun Karamshetty, INSEAD, Fontainebleau, 77300, France,
Elena Belavina, Karan Girotra
Kitchens are wasting as much on food waste as they make in profits. With an
estimated $1 trillion in food being wasted every year, food waste is not only a
huge economic loss, but also has a major impact on our environment accounting
for nearly 15% of global GHG emissions. We analyze proprietary data to
understand key drivers of food wastage in commercial kitchens. We identify the
controllable factors, and quantify the impact of each of them. We then propose
changes in their operations that minimize wastage while maintaining their service
quality and bottom-line.
TA37
205C-MCC
Sustainability Issues in Supply Chains I
Sponsored: Manufacturing & Service Oper Mgmt, Sustainable
Operations
Sponsored Session
Chair: Saed Alizamir, Yale University, 165 Whitney Ave,
New Haven, CT, 06511, United States,
1 - Should Brands Tighten Certification Standards
Li Chen, Cornell University, Ithaca, NY, United States,
Shiqing Yao, Kaijie Zhu
Global brands are increasingly relying on third-party certification to screen out
low-quality suppliers. However, an unethical certifier may collude with a low-
quality supplier to produce a false certification. In this study, we investigate the
buyer’s equilibrium strategy in setting certification standard under the risk of
supplier-certifier collusion.
2 - Can Brands Claim Ignorance? Unauthorized Subcontracting In
Apparel Supply Chains
Anna Saez de Tejada Cuenca, PhD Student, UCLA Anderson
School of Management, Los Angeles, CA, United States,
, Felipe Caro
The collapse of the Rana Plaza building in Bangladesh brought into focus the poor
safety conditions faced by many workers in the apparel industry. A common way
in which safety and environmental standards are violated is through
unauthorized subcontracting. We analyze empirically some factors that can lead
suppliers to outsource their production to third parties without their retailers’
knowledge. We use data provided by a supply chain manager that consists of over
30,000 orders, including 36% of subcontracted ones. Our results provide
managerial insights to retailers on what factory and order characteristics increase
the probability of unauthorized subcontracting, and how it can be prevented.
3 - Optimal Production Planing In Agricultural Supply Chains
Utku Serhatli, PhD Student, INSEAD, Constance de le Boulevard,
Fontainebleau, 77590, France, ,
Enver Yucesan, Andre Du Pin Calmon
We model the production decisions of a corn seed manufacturer who faces supply
and demand uncertainties, product returns, and quality problems over a finite
horizon. More specifically, we build an N-period model to capture the inherent
complexities and solve the two-period scenario where we prove the optimality of
a base stock policy and show the impact of operational agility on profit. We also
investigate the impact of yield variability and return rates on the optimal
production quantities. We complement our theory using numerical results with
data from a major European agro-chemical company.
4 - Managing A Responsible Supply Chain Under Threat Of Public
Disclosure
Saed Alizamir, Yale University, , Sang Kim
We analyze a game-theoretic model in which a downstream supply chain
member (“buyer”) is penalized disproportionately due to a compliance violation
by an upstream member (“supplier”). Buyer’s ability to audit the supplier is
limited, and she faces a risk of being publicly blamed after the supplier’s violation
is caught by a third party. Supplier exerts effort to enhance compliance in each
period, but risks having his relationship terminated due to a stochastic compliance
outcome.
TA37