2016 INFORMS Annual Meeting Program

439 / 561

INFORMS Nashville – 2016
439
WC36
205B-MCC
Economic Models in Supply Chains
Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain
Sponsored Session
Chair: Gizem Korpeoglu, University College London, Gower Street,
London, WC1E 6BT, United Kingdom,
1 - Supply Chain Expansion And Integration
C Gizem Korpeoglu, University College London,
, Ersin Korpeoglu, Soo-Haeng Cho
This paper studies expansion and integration of supply chains under uncertain
consumer demand. We show that when a supply chain expands to include more
suppliers or more retailers, the supply chain profit and efficiency increase. We
then consider the integration of two local supply chains (e.g., an economic union
such as the European Union (EU) Single Market), and show that the integration
may reduce total profit of firms in a supply chain with a smaller ratio of suppliers
to retailers. Our analysis suggests that the United Kingdom, which has a smaller
ratio of suppliers to retailers than the EU, could enjoy greater supply chain profits
after disintegrating from the EU, while the EU may incur profit losses.
2 - Pricing And Inventory Management For An Online Retailer
Rui Yin, Arizona State University,
We consider two selling mechanisms for an online retailer: price markdown and
inventory disclosure, and examine the impacts of these mechanisms on the
retailer’s sales and profits.
3 - Decentralization And Outsourcing In A Global Supply Chain Under
Arm’S Length Principle On Transfer Pricing
Kun Soo Park, KAIST, , Bosung Kim,
Seyoun Jung, Sang-Hun Park
We consider a multinational firm’s (MNF) production and procurement decisions
of global supply chain under a regulation on its transfer pricing, i.e., the arm’s
length principle. We analyze when it is beneficial for the MNF to open the local
division considering the tax rate differential. We also further consider if the local
division should seek for outsourcing from the 3rd party instead of the
manufacturing division of the MNF.
WC37
205C-MCC
Topics in Sustainable Operations
Sponsored: Manufacturing & Service Oper Mgmt,
Sustainable Operations
Sponsored Session
Chair: Vishal Agrawal, Georgetown University, Washington, DC,
United States,
Co-Chair: Isil Alev, Boston College, Boston, MA, United States,
1 - The Value Of Product Returns: Intertemporal Product
Management With Strategic Consumers
Narendra Singh, Indian School of Business, Hyderabad, India,
, Karthik Ramachandran,
Ravi Subramanian
We study the impact of consumer product returns and their potential refurbishing
on the intertemporal product strategy of a firm facing strategic consumers, who
anticipate future availability and prices of products and time their purchases to
maximize net utility. Using a two-period model, we show that returns may act as
a commitment device for a firm selling durable products and thereby mitigate the
time inconsistency problem. Specifically, a sufficiently high return rate coupled
with the firm’s incentive to refurbish the returns allows the firm to credibly
commit that the new product will be offered exclusively in the first period. As a
result, firm profit could even increase with the return rate.
2 - Lemons, Trade-ins, And Remanufacturing
Ximin Huang, Georgia Institute of Technology, 800 West Peachtree
Street, NW, Atlanta, GA, 30308, United States,
, Atalay Atasu, Beril L Toktay
Trade-in programs have been shown to partially mitigate the lemons problem in
secondary markets. In this paper, we show when and how remanufacturing
traded-in products can further improve the efficiency in secondary markets.
3 - Trade-in Remanufacturing, Customer Purchasing Behavior, And
Government Policy
Renyu Zhang, Assistant Professor of Operations Management, New
York University Shanghai, 1555 Century Ave, Shanghai, 200122,
China, , Fuqiang Zhang
We study the impact of customer purchasing behavior on the value of the widely
used trade-in remanufacturing program to the firm and the environment. We find
a brand new value of trade-in remanufacturing that helps exploit the forward-
looking behavior of strategic customers. The value of trade-in remanufacturing is
sensitive to customer purchasing behavior. Under intensive strategic customer
behavior, trade-in remanufacturing creates a tension between profitability and
sustainability: It significantly improves the firm profit but also significantly hurts
the environment. We also characterize the government policy that can induce the
social optimum under different customer behaviors.
4 - Extended Producer Responsibility (epr) And Export Bans
Isil Alev, Boston College, Chestnut Hill, MA, 02467, United States,
, Vishal Agrawal, Atalay Atasu
We focus on the ongoing global debate about the export of electronics to
developing countries for recycling under EPR-based legislation. To prevent such
practices, the US and the EU introduced partial export bans that only allow the
export of electronics with remaining useful life. We compare these bans with no
and full export ban scenarios and show that they may lead to exacerbated
environmental harm in both developing and developed countries.
WC38
206A-MCC
General Session I
Contributed Session
Chair: Hedayat Alibeiki, McGill University, 1001 Sherbrooke Street
West, Desautels Faculty of Management, Montreal, QC, H3A 1G5,
Canada,
1 - Teaching And Learning Of Decision Making In Complex Projects
Under Uncertainties
K Jo Min, Iowa State University, 3004 Black Engineering,
Department of Industrial &, Ames, IA, 50011-2164, United States,
, John Jackman, Michelle Zugg
How best to teach and learn decision making under uncertainties for complex
projects has become a critical topic in operations research and management
science education. In this paper, we show how a module in an introductory
engineering economy course and an experimental advanced course are used to
facilitate this aim. Data-driven results are analyzed and lessons will be shared.
2 - When To Introduce An Online Channel, And Offer Money Back
Guarantees And Personalized Pricing?
Jing Chen, Professor, Dalhousie University, 6100 University
Avenue, Halifax, NS, B3H 4R2, Canada, ,
Bintong Chen
Retail sales through an online channel is increasingly popular in the retailing
industry. Customers, however, cannot touch or feel a product before they
purchase online. This leads to much higher rates of customer returns in the
online channel, which in turn leads to significant costs to retailers. In this paper,
we develop a model of a dual-channel structure with an online and a retail
channels to examine when a retailer should introduce an online channel and
how it should offer returns policy for two channels.
3 - Retail Power Impacts On Assortment Decisions By
Power Retailers
Hedayat Alibeiki, McGill University, 1001 Sherbrooke Street West,
Desautels Faculty of Management, Montreal, QC, H3A 1G5,
Canada,
Using several game-theoretic models, this paper examines potential impacts of
different sources of retail power on the assortment choice of a power retailer. We
find that assortment decisions of power retailers are strongly connected to their
pricing power in the market, which suggests that pricing and assortment decisions
are two different sides of the same coin for power retailers in a competitive
market. On the other hand, product cost advantage seems to play a secondary
role in comparison with market pricing leadership. We also find that larger
market share in all scenarios amplifies the retailer’s control over the market and
can have a significant impact on pricing and assortment decisions.
WC38