2016 INFORMS Annual Meeting Program

MD30

INFORMS Nashville – 2016

MD31 202C-MCC Operations and Financing Interface Sponsored: Manufacturing & Service Oper Mgmt, iFORM Sponsored Session Chair: Guoming Lai, Univ. of Texas Austin, 2110 Speedway Stop B6500, Austin, TX, 78712, United States, laiguoming@gmail.com Co-Chair: Qi Wu, Case Western Reserve University, Cleveland, OH, 44106, United States, qxw132@case.edu 1 - Capital Structure With Asset Flexibility Qi Wu, CWRU, Cleveland, OH, United States, qxw132@case.edu, Peter Ritchken We study the impact of asset flexibility on the design of an optimal capital structure in a dynamic model in which the firm has multiple debt issues and equityholders choose the timing and financing of future growth options as well as the operating policy for assets in place. We show that, all things being equal, profitable firms with flexible assets exercise their growth options earlier, use less debt, and will typically be less leveraged than otherwise identical firms with no asset flexibility. When asset flexibility allows risk-shifting possibilities, firms exercise growth options even earlier. 2 - Operational And Financial Interactions In Supply Chain Network Structure John R Birge, University of Chicago, John.Birge@ChicagoBooth.edu 3 - Competitive Risk Management Danko Turcic, Washington Univ. in St. Louis, turcic@wustl.edu, Guang Xiao, Panos Kouvelis This paper provides a new rationale for hedging that is based, in part, on non- competitive behavior in product markets. We identify a set of conditions, which imply that a firm may want to hedge. Both operational and financial hedging strategies are considered. 4 - Inventory Operations Under The Shadow Of Company Stock Price Guoming Lai, UT-Austin, laiguoming@gmail.com Inventory management is one central problem of operations. The classical inventory theories typically focus on the operational tradeoffs to optimize the inventory decisions. In practice, however, many firms are public that often have short-term interests in their market value. Our analysis reveals that public firms may install more inventory in equilibrium to influence their earnings. We discuss the determinants of such an effect as well as the empirical evidence. MD32 203A-MCC Scheduling Contributed Session Chair: Med Labidi, Assistant professor, King Saud University, IED, Riyadh, 11421, Saudi Arabia, mlabidi@ksu.edu.sa 1 - A Mathematical Model And A Heuristic For The Capacitated Lot Sizing Problem In Process Industries Chandrasekharan Rajendran, Professor, IIT Madras, DoMS, IIT Madras, Chennai, 600036, India, crajiitm@gmail.com, Ramya Ravi, Hans Ziegler In this work, we consider the capacitated lot sizing problem (CLSP) with production carryover and setup carryover across multiple periods in process industries. This CLSP is characterized by the commencement of production immediately after the setup of the product, and without any interruption in production. Mathematical and heuristic models are specifically developed for this class of CLSP. Also, the proposed heuristic exploits the Fixed-and-Relaxed principle. The computational effectiveness of both the models are evaluated using problem instances of various sizes, and are also reported. It is possibly the first time that such a CLSP is presented. 2 - Scheduling When You Don’t Know The Number Of Machines Mingxian Zhong, Columbia University, 528 Riverside Drive, Apt 4A, New York, NY, 10027, United States, mz2325@columbia.edu, Clifford Stein We study scheduling environments in which you have to make some decisions before learning the number of machines. Specifically, we introduce a model in which you first need to group jobs into some sets, next you learn the number of machines and then you need to schedule sets of jobs on machines without separating them. We give a 9/5(1+epsilon)-approximation algorithm for minimizing makespan in this environment and show some hardness results.

4 - Drivers And Benefits Of Return Policies For Online Retailers Guangzhi Shang, Florida State University, gshang@business.fsu.edu The common retail practice of full refunds is inconsistent with the recommendations of many analyticalmodels of returns, which almost always show that a partial refund is optimal. We use data collected from eBay to analyze both the return policy drivers from the seller’s perspective and the return policy value from the consumer’s perspective, providing insights to two potential explanations for the gap between theory and practice. MD30 202B-MCC Retail Operations II Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Santiago Gallino, Dartmouth College, Hanover, NH, United States, santiago.gallino@tuck.dartmouth.edu 1 - Optimizing Customer Pick-up Locations Using An Empirical Model Chloe Kim, The Whaton School, chloekim@wharton.upenn.edu, Marshall L Fisher, Xuanming Su We empirically study the determinants of pick-up location success for an online grocery retailer. We consider various aspects of individual locations, including local competition, local consumer attributes, and the potential for cannibalizing sales from other locations. We suggest an algorithm for optimizing pick-up locations and measure its impact on revenue. 2 - Prioritizing Outbound Calls In A Sales Contact Center Marcelo Olivares, Universidad de Chile, molivares@u.uchile.cl We study an outbound call center that provides sales support to an online platform selling auto insurance. When setting priorities among which customers to contact, it is necessary to identify which calls are more likely to convert into sales. We develop an econometric approach to conduct this segmentation using detailed customer-level transaction data. A key factor in our analysis is the customer elapsed time since receiving the quote, which has a significant negative effect in sales conversion. This approach can be used to implement an automated priority system to manage outbound calls and can be adapted to other types of contact centers. 3 - Management And Effects Of In-store Promotional Displays Oguz Cetin, UNC Kenan-Flagler Business School, Oguz_Cetin@kenan-flagler.unc.edu, Adam J Mersereau, Ali Kemal Parlakturk Promoting a product via an in-store display can increase demand for it by making it more visible to customers, but it may also impact demand for other products by changing customer traffic patterns in the store. We characterize the optimal choice of product to promote in a nested multinomial logit formulation, and we examine the impact on product, category, and store profits. 4 - Spatial Competition And Preemptive Entry In The Discount Retail Industry Fanyin Zheng, Columbia Business School, fz2225@gsb.columbia.edu This paper studies how discount retailers make store location decisions by estimating a dynamic game model. It extends the empirical models of dynamic oligopoly entry by allowing for spatially interdependent entry and introducing machine learning tools to infer market divisions from data. The results suggest that preemptive incentives are important in chain stores’ location decisions and that they lead to loss of production efficiency.

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