Informs Annual Meeting Phoenix 2018

INFORMS Phoenix – 2018

MC15

2 - Sample Boxes for Retail Products: Bundling Experience Goods to Leverage Consumer Uncertainty Alireza Yazdani, University of Oregon, Eugene, OR, United States, Eren Basar Cil, Michael Pangburn Consumers often try a few varieties of an experience product before they establish their shopping routine. Sample boxes create value through helping consumers resolve their valuation uncertainties of these varieties earlier and at a lower cost. In this paper, we study how firms and consumers share this added value under different market scenarios. We show that when a firm offers a sample box, consumers obtain higher net expected surplus while the firm’s expected profit may decrease. We find that the firm can reverse the adverse effects of selling sample boxes by introducing an optimally specified future-credit. 3 - Economics of Autonomous Vehicles: Formulation and Analysis of Optimal Policies Mehdi Nourinejad, University of Toronto, Toronto, ON, L4B4G6, Canada, Opher Baron, Oded Berman Autonomous vehicles are predicted to enter the consumer market in less than a decade. However, there is no consensus on whether their presence will have a positive impact on users and society. The skeptics of automation foresee increased congestion, whereas the advocates envision smoother traffic with shorter travel times. In this paper, we study the automation controversy using supply-demand analysis. We show that a sound judgment of automation relies on the occurrence of three possible cases for which full, null, or partial automation is recommended. Moreover, although traffic increases with automation, the travel times may decrease in certain cases. 4 - Pricing Strategy and Collusion in a Market with Delay Sensitivity Noam Shamir, Tel Aviv University, Haim Levanon, Tel Aviv, 49504, Liron Navner In this paper, we study price collusion between two firms providing service to delay-sensitive customers using a discounted repeated game. The equilibrium is fully characterized along with specific conditions for the minimal discount factor that enables collusion. The effect of service value on the firm’s revenue and ability to collude is further analyzed. n MC15 North Bldg 127A Consideration Sets in Choice Modeling Sponsored: Manufacturing & Service Oper Mgmt/Service Operations Sponsored Session Chair: Gustavo J. Vulcano, Universidad Torcuato di Tella, Buenos Aires, 1428, Argentina 1 - Estimation and Assortment Optimization for a Random Consideration Set Model Anran Li, the Hong Kong University of Science and Technology, Department of IEDA, Room 5568, The HKUST, Mudd 345, Sai Kung, NY, 10027, Hong Kong Manzini and Mariotti (2014) propose a consideration set based choice model that postulates a full preference ordering as well as exogenous attention probabilities from which consideration sets are formed. The model assumes that consumers select the highest ranked product in their consideration set and the heterogeneity among choices are due to randomness in the consideration sets formation process. While Manzini and Mariotti focus on rationalizing this choice model, we look at its operations applicability by looking into the parameter estimation and assortment optimization problems. 2 - Inferring Competition Sets from Sales Transactions Data Dmitry Mitrofanov, Stern School of Business, NYU, 44 West 4th Street, 8th Floor, New York, NY, 10012, United States, Gustavo J. Vulcano, Srikanth Jagabathula We study the General Consideration Set (GCS) choice model to infer competition sets from sales transactions data. The primary question we address is whether the GCS model is identifiable. We provide necessary and sufficient conditions to assess if the sales data was generated by the model, and provide the arguments of how to infer the preference order and the probability distribution function over consideration sets from the observed choice frequencies. Our empirical results show that GCS choice model provides a very competitive choice prediction performance in comparison with state-of-the-art benchmarks, while providing the insights about competition sets. 3 - Consumer Choice Models with Consideration Set Ruxian Wang, Johns Hopkins University, Carey Business School, 100 International Dr, Baltimore, MD, 21202, United States We study the two stage consider-then-choose model under which a consumer first forms her consideration set and chooses one within it. We investigate the operations management problems and develop efficient algorithms to estimate the new choice model.

n MC13 North Bldg 126B Healthcare Operations II Sponsored: Manufacturing & Service Oper Mgmt/Healthcare Operations Sponsored Session Chair: Susan F. Lu, Purdue University,West Lafayette, IN, 47907, United States 1 - Managing with Targets in Healthcare: The Case of 4-hour Emergency Department Target Basak Bebitoglu, London Business School, London, United Kingdom, Nicos Savva, Tolga Tezcan The UK government has instigated a rule in 2010 where 95% of the patients should be seen, admitted or discharged within four hours in emergency departments. This caused a large proportion of patients (15.69%) to be processed in the last 20 minutes to the target. Therefore, this paper intends to understand the unintended consequences of this arbitrary 4-hour target with the final intention of creating a queuing model to generate counterfactuals. We fit Cox proportional hazards model using patient level data from over half million visits at a UK hospital emergency department. The results indicate that as the target gets The Case of the Hospital Readmissions Reduction Program Christopher J. Chen, London Business School, Regent’s Park, London, NW14SA, United Kingdom, Nicos Savva We study the impact of the Hospital Readmissions Reduction Program on admissions decisions. Exploiting variation in hospitals’ financial exposure to the program, we show that hospitals tried to reduce readmission rates by increasing the number of patients that were classified as admitted for “observation, which avoided potential penalties associated with a regular admissions. 3 - Distance, Quality or Relationship? Inter-hospital Transfer of Heart Attack Patients Susan F. Lu, Purdue University, Krannert 441, West Lafayette, IN, 47907, United States, Lauren Xiaoyuan Lu We empirically investigate the pattern of where heart attack patients are transferred between hospitals. Using 2011 Florida State Emergency Department and Inpatient Databases, we demonstrate the relative importance of three key factors in determining transfer destinations: hospital relationship, distance, and quality. Our conditional logit analysis shows that the relationship of being affiliated with the same multihospital system plays a dominant role in the choice of transfer destinations, compared to distance and quality. 4 - Dynamic Appointment Scheduling of Base and Surge Capacity Benjamin Grant, Kellogg School of Management, 1881 Oak Avenue, # 1307W, Evanston, IL, 60201, United States We study dynamic stochastic appointment scheduling when delaying appointments increases the risk of incurring costly failures, such as readmissions in health care or engine failures in preventative maintenance. When near-term base appointment capacity is full, the scheduler faces a trade-off between delaying an appointment at the risk of costly failures versus the additional cost of scheduling the appointment sooner using surge capacity. Economic Models in Service Environment Sponsored: Manufacturing & Service Oper Mgmt/Service Operations Sponsored Session Chair: Noam Shamir, Tel Aviv University, Tel Aviv, 49504, Israel 1 - Worker Flexibility Training and Production Autonomy Evan Barlow, Weber State University, Goddard School of Business & Economics, 1337 Edvalson St, Ogden, UT, 84408, United States, Gad Allon, Achal Bassamboo We explore the interaction between worker production autonomy and workers’ decisions on training to become flexible resources. Research on flexible resources is prevalent in the operations management literature. Human resources, however, are decision makers and have rights to decide on their own skill sets. Many firms have given workers some production autonomy to choose how to use the skills they possess. We show how workers’ training decisions are affected by the identity of the production and training decision makers. closer, it creates a speed-up effect on patient treatment times. 2 - Unintended Consequences of Hospital Regulation: n MC14 North Bldg 126C

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