2016 INFORMS Annual Meeting Program

SD36

INFORMS Nashville – 2016

SD36 205B-MCC Economics of Operations Management Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain Sponsored Session Chair: Kenan Arifoglu, UCL, London, United Kingdom, k.arifoglu@ucl.ac.uk 1 - Money-back Guarantees When Physical And On-line Retailers Compete Hang Ren, University College London, hang.ren.13@ucl.ac.uk Tingliang Huang, Ying-Ju Chen, Christopher S Tang We study the pricing and product return policies when physical and on-line stores compete. We find that the on-line store offers money-back guarantees when its salvage advantage outweighs total return hassle. Interestingly, better service quality may hurt the on-line store. When consumers can showroom, i.e., buying online after trying the product offline, the on-line store should offer hassle-free money-back guarantees. Moreover, the showrooming behavior may benefit the physical store while harming the online store. 2 - Licensing Contracts In Conspicuous Markets Prateek Raj, University College London, p.raj.12@ucl.ac.uk, Kenan Arifoglu We study licensing decision of a brand owning firm that sells its primary product to conspicuous customers who value the brand exclusivity, and also licenses its brand name to a licensing firm. We compare efficiency of fixed-fee, royalty and mixed contracts and also explore the role of licensing under competition. Due to uncertain valuation of a new product, consumers often seek to learn more about the product before making purchasing decisions. In general, consumers can learn from the firm directly, from making an individual effort to learn, or from other consumers indirectly (through social learning). In this paper, we present a unified framework of consumer learning in the context of rational and heterogeneous consumers. Our goal is to examine, from the firm’s perspective, when and why (i) investing in firm-induced learning can be superior to variable pricing, (ii) subsidizing individual learning can be beneficial, and (iii) investing in social learning (e.g., online forums) can be harmful. 4 - Is Reshoring Better Than Offshoring Under Offshore Supply Dependence? Hu Bin, University of North Carolina, Chapel Hill, NC, United States, bin_hu@unc.edu, Li Chen We investigate offshore supply dependence’s impact on the offshoring-reshoring comparison. We find that offshore supply dependence may hamper a reshoring manufacturer’s responsiveness to demand information updates, such that reshoring may yield lower profits than offshoring in many cases, including when reshoring has no direct cost disadvantages. We then show that offshore supply dependence also affects how customs duties and shipping costs influence the offshoring-reshoring profit comparison. We further identify common-component designs as an approach to mitigate reshoring firms’ offshore supply dependence and help promote reshoring in its presence. SD37 205C-MCC Value Chain Transformations for Sustainability Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Dan Andrei Iancu, Stanford University, 655 Knight Way, Stanford, CA, 94305, United States, daniancu@stanford.edu Co-Chair: Joann de Zegher, Stanford University, Y2E2 Suite 226, Stanford, CA, 94305, United States, jfdezegher@stanford.edu 1 - Retail Clusters In Developing Countries Xuying Zhao, University of Notre Dame, Xuying.Zhao.29@nd.edu, Hong Guo, Chao Ding, Jing-Sheng Jeannette Song A retail cluster refers to a collection of horizontally differentiated retailers of a particular business sector locating in close proximity. Retail clusters are commonly seen in developing countries. In this paper, we develop a game-theoretic model to explore why the retail cluster phenomenon is so popular in developing countries and how the governments in these countries can foster retail clusters and leverage them to improve social welfare. 3 - Selling New Products Through Consumer Learning Yufei Huang, University of Bath, y.huang@bath.ac.uk, Bilal Gokpinar, Christopher S. Tang, Onesun Steve Yoo

2 - Achieving Sustainability Commitments In Commodity Supply Chains Joann Francoise de Zegher, Stanford University, Stanford, CA, United States, jfdezegher@stanford.edu, Hau Leung Lee, Dan Andrei Iancu, Erica Plambeck How can downstream companies in commodity supply chains incentivize small producers to mitigate deforestation while also improving farmer welfare? Motivated by field research in the palm oil industry, we propose an incentive based on early payments. The dynamics of this incentive are distinct from a price premium incentive, due to characteristics of small-farmer cash flow needs upstream and large discrepancies in borrowing abilities of different supply chain tiers. We build a theoretical model to analyze this setting and ground our analysis through empirical work in the complex palm oil supply chain originating in Indonesia. 3 - Effective Medical Surplus Recovery Can Zhang, Georgia Institute of Technology, Atlanta, GA, 30309, United States, czhang2012@gatech.edu, Atalay Atasu, Beril L Toktay, Wee Meng Yeo We analyze a Medical Surplus Recovery Organization (MSRO) that recovers and manages reusable medical products to fulfill the needs of under-served healthcare facilities in developing countries. Using a game theoretic analysis, we identify loss of effectiveness caused by competition among recipients in a recipient-driven model implemented by the MSRO. We then present operational mechanisms that can improve the MSRO’s total value provision and we numerically validate our results using real life data. SD38 206A-MCC Innovation and Entrepreneurship Invited: New Product Development Invited Session Chair: Raul Chao, University of Virginia, UVA, Charlottesville, VA, United States, ChaoR@darden.virginia.edu 1 - Risk Aversion And Joint Problem Solving: Experimental Evidence Marc Christiaan Jansen, Cambridge Judge Business School, Downing College, Regent Street, Cambridge, CB2 1DQ, United Kingdom, mcj32@cam.ac.uk, Nektarios Oraiopoulos, Niyazi Taneri We examine the effect of risk aversion on collaborative problem solving between two partners. We design an experiment that measures subjects’ risk aversion and allocates subjects to treatments accordingly. We show that subjects perform relatively well in sharing the risk between them, but underperform relatively to the optimal investments levels. 2 - Strategic Positioning In Global Entrepreneurship Ecosystems Hyunwoo Park, Postdoctoral Fellow, Georgia Institute of Strategic positioning is particularly critical for entrepreneurial ventures, which face a difficult trade-off in balancing legitimacy through similarity versus innovativeness through differentiation. Using a computational approach based on data mining, text analytics, and network visualization, we seek to gain an understanding of the structure of strategic positioning of nearly 60,000 companies in 35 global entrepreneurial ecosystems. 3 - Won’t Leave You At The Altar: Designing Alternative Mechanisms For Startup Supply Chain Development Emre Guzelsu, Boston University, bguzelsu@bu.edu Brad Lee, Nitin Joglekar Startup supply chain development spans two stages, early experimentation without revenue followed by production scale-up and revenue generation. Early experimentation involves single sourcing with another startup, while production offers dual sourcing opportunity. We explore alternative mechanisms for startup supplier alignment across both stages using a game theoretic framework. 4 - Optimal Supplier Allocation In Collaborative Product Development With Competing Internal Teams Svenja Sommer, HEC Paris, 1, Rue de la Liberation, Jouy-en-Josas, France, sommers@hec.fr, Timofey Shalpegin, Christian Van Delft To reduce the uncertainty inherent in development, manufacturers sometimes deploy competing internal teams, each working on a different technology or design. Often this development takes place in collaboration with key suppliers. We explore how manufacturers should allocate suppliers (with different capabilities) to these teams, considering the impact on supplier efforts. Technology, Atlanta, GA, 30332, United States, hwpark@gatech.edu, Rahul C Basole, Raul Chao

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