2016 INFORMS Annual Meeting Program

TB36

INFORMS Nashville – 2016

4 - Pricing In A Two-sided Market With Time-sensitive Customers And Suppliers Mustafa Akan, Tepper School of Business, Carnegie Mellon University, Pittsburgh, PA, United States, akan@andrew.cmu.edu, Philipp Afeche We consider a firm that matches stochastically arriving and time-sensitive customers and suppliers. We characterize the structure and performance of the profit-maximizing and socially optimal pricing policies. TB36 205B-MCC Pricing and Supply Chain Management in Healthcare Industry Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain Sponsored Session Chair: Mehmet Sekip Altug, George Washington University, maltug@gwu.edu 1 - Contracts For Referral Healthcare Services Fernanda Bravo, Assistant Professor, UCLA, Los Angeles, CA, United States, fernanda.bravo@anderson.ucla.edu, Elodie Adida This work focuses on the B2B interaction between a service requester and a service provider in a healthcare environment. The requester is responsible for managing the health of a population of patients, and refers the patient to a provider for advanced care needs. The requester may exert effort to reduce the volume of referrals and the provider may exert effort to reduce the chance of treatment failure. We analyze a variety of payment systems between the two firms and study how to coordinate the effort decisions with either the system optimum or the social optimum. 2 - Drug Pricing For Competing Pharmaceutical Manufacturers Distributing Through A Common PBM Nan Yang, University of Miami, Coral Gables, FL, United States, yangn@wustl.edu, Panos Kouvelis, Yixuan Xiao We study the price competition among multiple branded drug manufacturers when their drugs are distributed through a common Pharmacy Benefit Manager (PBM). We characterize the downstream PBM’s optimal copayment and pricing decisions, and establish conditions for the equilibrium analysis of the price competition among the branded drug manufacturers. In particular, we provide a sufficient condition for the uniqueness of the equilibrium, and characterize the unique equilibrium in closed form. We apply our model to study the strategic implications of vertical integration between a branded drug manufacturer and the PBM. 3 - Policy And Product Launch Implications Of Parallel Imports In Pharmaceutical Industry Mehmet Altug, George Washington University, maltug@gwu.edu, Ozge Sahin While it may be socially optimal to introduce a new drug all over the world at the same time, doing so may have adverse implications for drug developers, such as the emergence of parallel imports. We study a pharmaceutical firm that already introduced a pioneering drug in its home country, where the product is protected by patent rules. The firm has to decide whether to launch in a second country in the same region, where parallel import between these two countries is feasible and if so how to price it. We characterize the joint equilibrium pricing and product launch decision of the firm. We discuss how these decisions are a ected by various parameters, including insurance, patient populations and negotiation. Sustainability Issues in Supply Chains II Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Karthik Natarajan, University of Minnesota, University of Minnesota, Edina, MN, Please fill in, United States, knataraj@umn.edu 1 - Optimal Contracts For Recycling And Refurbishment In The Reverse Supply Chain Aditya Vedantam, State University of New York at Buffalo, Buffalo, NY, United States, adityave@buffalo.edu, Ananth Iyer Several companies contract with third parties to dispose end-of use electronics involving recycling and refurbishment with subsequent resale. We present examples of contracts currently used in the IT Asset Disposition industry, provide TB37 205C-MCC

insights on the profit and environmental impact and show how a customer can optimally set contract parameters under uncertainty in condition of incoming units. We parameterize our model to data from a third party e-waste recycler. 2 - Environmental Benefits Of Internet-enabled C2c Surplus Chains Suvrat Dhanorkar, Pennsylvania State University, 120 Kenley Court, State College, PA, United States, ssd14@psu.edu Recently, online matching platforms (e.g. Craigslist, FreeCycle, Gumtree) have enabled consumers to directly connect with each other to buy/sell surplus consumer goods (electronics, furniture etc.), which would have otherwise ended up in the waste stream. Such matching platforms can facilitate the creation of C2C “surplus chains” for used goods, which can enhance product reuse and limit reliance on recycling and disposal alternatives. We estimate the environmental benefits of internet-enabled surplus chains. 3 - The Implications Of Eliminating Grading In Food Supply Chains Karthik Murali, University of Alabama, kmurali@cba.ua.edu, Isil Alev Aside from imprudent consumer behavior, food grading based on aesthetics is the biggest contributor to food waste in the U.S. This study explores the implications of eliminating food grading in the agri-supply chain by considering the introduction of differentiated produce at the retail level and its impact on profitability, waste, and farmed acreage when consumers are heterogeneous and produce quality is uncertain. 4 - Investigating The Impact Of Supply-chain Factors on Counterfeit Parts Vidya Mani, Pennsylvania State University, State College, PA, United States, vmani@psu.edu, Jayashankar Swaminathan In this paper we investigate the relationship between supply chain factors and risk of counterfeit parts. We quantify the effectiveness of inventory positioning, distribution network, and information sharing through an empirical study of counterfeit parts in the electronic parts supply chain. TB38 206A-MCC Reliability I Contributed Session Chair: Hui Wang, Florida State University, Tallahassee, FL, United States, hw11b@my.fsu.edu 1 - Dynamic Reliability Modeling Of Software Errors John G Wilson, Professor, Ivey School of Business, London, ON, N6G ON1, United States, jwilson@ivey.ca, Dov Te’eni New errors can be dynamically introduced as new devices are produced and are found to be incompatible with software that is perfectly good for other devices. We provide a procedure for finding maximum likelihood estimators of key parameters where the number of errors and the number of users can change. This methodology is particularly apt for big data applications. 2 - Condition-Based Maintenance Policies Under The Gamma Degradation Process David Han, University of Texas at San Antonio, One UTSA Circle, San Antonio, TX, 78249-0632, United States, david.han@utsa.edu Condition-based maintenance is an effective method to reduce unexpected failures as well as the O&M costs. This talk discusses the condition-based maintenance policy with optimal inspection points under the gamma degradation process. A random effect parameter is used to account for population heterogeneities and its distribution is continuously updated at each inspection epoch. The observed degradation level along with the system age is utilized for making the optimal maintenance decision, and the structure of the optimal policy is examined. 3 - A Combined Repair-replacement Warranty Policy Considering Heterogeneous Usage Rate And Customer Error

Guozhen Xiong, graduate Student, Tsinghua University, Department of Industrial Engineering, Tsinghua University, Beijing, China, Beijing, 100084, China, xgz14@mails.tsinghua.edu.cn

Warranty has been widely used as a means of sales promotion. However, the warranty services usually result in considerable cost and hurt a company’s profitability. It is not uncommon that some failures within warranty period are caused by customers’ improper use, which should not be covered by the warranty service. Therefore, in order to minimize the total cost, this research studies the integration of maintenance strategies with appropriate testing strategies to identify failures that are out of warranty. Heterogeneous usage rate is also considered. Numerical experiments are conducted to illustrate the influence of different combinations of testing and maintenance strategies on warranty cost.

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