2016 INFORMS Annual Meeting Program

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INFORMS Nashville – 2016
352
2 - Fair Competition Of Brand Name Drugs Under Rebate
Arrangements
Hui Zhang, Faculty of Business Administration, Lakehead
University,
When new drugs are listed for a third-party payer’s coverage, they are often
required to sign rebate arrangements to reduce payers’ financial risk. In this
paper, we consider two forms of rebate arrangements. 1, the new drug is paid at
its original price if its sale is under a volume threshold and then is paid at the old
drug’s price otherwise. 2, a volume threshold is specified for all drugs. If the total
sales of all drugs exceed the threshold, each drug is required to pay a rebate
according to its market share. We investigate the optimal decisions of the payer
and the drug manufacturers and identify the impact of the rebate on the fairness
of competition.
TD55
Music Row 3- Omni
Inventory Management VI
Contributed Session
1 - Dynamic Pricing, Hedging, And Inventory Management In A Two-
product Monopoly Under Cost And Demand Risk
Max F Schoene, Doctoral Student, WHU - Otto Beisheim School of
Management, Reinhold-Friedrichs-Str. 49, Muenster, 48151,
Germany, Stefan Spinler, John R Birge
We study the joint inventory management, dynamic pricing, and financial
hedging problem of a risk-averse, two-product monopolist facing cost and
demand risk. These risks can be correlated across markets and customers may
view the two products as substitutes or complements creating demand
interdependencies. We provide an analytic solution to the firm’s multi-period
decision problem and characterize the implications of operating in several
interdependent markets for integrated policy making.
2 - A Newsvendor Analysis Of Binomial Yield Production Process
Sungyong Choi, Assistant Professor of Supply Chain Management,
Yonsei University, 1 Yoneseidae-gil, College of Government and
Business, Wonju, 26493, Korea, Republic of,
Sumin Jeon, Jinmin Kim,
Kwangtae Park
We study a Binomial yield production process with a newsvendor approach. We
provide a reformulation of the original model to convert the discrete exact model
to the continuous approximate model by Normal approximation. We conduct
comparative static analysis for model parameters in the approximate model and
derive monotone properties to the optimal solution. All the analytical results are
consistent with our insights and supported by economic explanations. Our
numerical examples by sample-based optimization show that the approximate
model is sufficiently close to the exact model. Finally, all the results of sensitivity
analysis in model parameters are also confirmed numerically.
3 - Onshore And Offshore Procurement: Global Sourcing Strategies
Zhe Liu, PhD Candidate, Columbia University, 511 W 112th Street,
Apt 24C, New York, NY, 10025, United States,
, Awi Federgruen, Lijian Lu
This paper studies a finite horizon, single product, periodic review inventory
system with two supply sources, which originates from real world global sourcing
firms facing onshore and offshore procurement problems. Supply sources are
differentiated by their fixed and variable ordering costs, delivery lead times, as
well as constraints on the order sizes. Excess inventories may be salvaged at the
end of each period with a fixed cost and variable revenue, or be carried over to
the next period. We derive structural results for the optimal solution, based on
which we are able to characterize the optimal sourcing and salvaging decisions.
4 - Evaluating The Potential Of Additive Manufacturing For Spare
Parts Supply
Rob Basten, Assistant professor, Eindhoven University of
Technology, PO Box 513, IE&IS - OPAC, Eindhoven, 5600MB,
Netherlands, , Bram Westerweel,
Geert-Jan Van Houtum
We investigate the decision of whether or not to replace a regularly produced
spare part with an alternative produced via additive manufacturing (AM), also
called 3D printing. Such a transition requires a one-time investment and changes
characteristics such as procurement lead time, production costs and component
reliability. We consider the entire product lifecycle and take into account
performance benefits and design, inventory, maintenance and downtime costs.
We derive analytical properties of the required reliability and production costs of
the AM part such that its lifecycle costs break even with that of its regular
counterpart.
TD56
Music Row 4- Omni
Online Crowdfunding
Sponsored: EBusiness
Sponsored Session
Chair: Zaiyan Wei, Purdue University, West Lafayette, IN, United States,
1 - Users’ Resilience To Kickstarter Scam
Xue Tan, University of Washington, Yingda Lu,
Yong Tan
Users’ expected quality of crowdfunding projects is an important determinant of
their backing choice. Users who have experienced scam or unsuccessful projects
may update their belief in the quality of projects over the platform to a lower
level. In this study, we analyze how users learn from their past experience of
unsuccessful or scam projects. We use longitudinal backing history of Kickstarter
backers, and adopt text mining technique to analyze project failure types. By
categorizing the unsuccessful delivery of products into several types, we examine
the impacts of different types of project failures. Our work contributes to the
policy design of crowdfunding platforms.
2 - Institutional Investors In Online Crowdfunding
Zaiyan Wei, Purdue University, West Lafayette, IN, 47907, United
States, , Mingfeng Lin, Richard Sias
The “crowd” in online crowdfunding is no longer only comprised of retail
investors; in fact, debt-based crowdfunding has long attracted the interest of
institutional investors. We study whether they are indeed better able to screen
borrowers than, and have any impacts on the behaviors of, retail investors. We
find that although institutional investors indeed behave differently, overall their
portfolios do not outperform those of retail investors. Their bids have significant
impacts on the behavior of retail investors, as well as funding outcomes. We find
that this effect is driven by the designation of “institutional investors” rather than
just the portfolio size.
3 - Effects Of Charitable Giving In Crowdfunding: Crowds Fund Our
Kids
Qiang Gao, University of Arizona, Tucson, AZ, 85721, United
States, , Paulo B Goes, Mingfeng Lin
We investigate how crowdfunding contributes to public goods by exploring the
geographical expansion of a donation-based crowdfunding funding platform for
educational purpose. Our initial results show that the emergence of crowdfunding
as a viable financial source actually affects classroom activities and that crowd
donation contributes to the improvement of education. We also find that the
impact vary among different projects. Our findings help promote the awareness of
such opportunities not documented in literature and benefit society as a whole.
4 - Information Disclosure And Crowdfunding
Keongtae Kim, City University of Hong Kong,
, Jooyoung Park
Several strategies in crowdfunding have been introduced to dampen information
asymmetry between funders and creators. This study examines one such possible
mechanism, namely a platform-wide rule to require the disclosure of project risk,
implemented in a crowdfunding platform during our study period. We find that
the new disclosure policy led to a decrease in the creation of new projects, even
successful ones. Our additional analyses show a stronger effect on creators
bearing a larger burden from the disclosure requirement. We further find that the
decrease is partly driven by the negative perceptions of funders about the risk
information disclosed.
TD57
Music Row 5- Omni
Emerging Behavioral Work by Doctoral students
Sponsored: Behavioral Operations Management
Sponsored Session
Chair: Julie Niederhoff, Syracuse University, 721 University Ave,
WSOM 500, Syracuse, NY, 13244, United States,
1 - Risk And Loss Aversion In Information Security Investment:
Theory And Experiments
Jie Zhang, The University of Texas at Arlington, 701 S Nedderman
Dr, Arlington, TX, 76019, United States, ,
Kay-Yut Chen, Jingguo Wang
Information security has gained much attention in the information systems
literature. In this paper, we study how organization should decide the proper
levels of investment to reduce the chances of loss, under different risk and loss
TD55