2016 INFORMS Annual Meeting Program

WA38

INFORMS Nashville – 2016

WA37 205C-MCC

3 - Customer Segmentation And Fairness: A Queueing Perspective Yong-Pin Zhou, Professor, Foster School of Business, University of Washington, Seattle, Seattle, WA, 98195-3226, United States, yongpin@uw.edu, Jian Liu When a service firm uses limited capacity to serve heterogeneous customers, it can employ customer segmentation and prioritization techniques to maximize profit. Customers are often assumed to be rational decision makers in choosing which service option to use. In this research, we incorporate customers’ sense of fairness and show that it can make a difference in how the firm should choose which services to offer, and how to prioritize. WA36 205B-MCC Cooperation in Supply Chain Management Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain Sponsored Session Chair: Xiangyu Gao, University of Illinois, University of Illinois at Urbana-Champaign, Champaign, IL, 61801, United States, xgao12@illinois.edu Co-Chair: Xin Chen, UIUC, UIUC, Urbana, IL, 61801, United States, xinchen@illinois.edu 1 - Population Monotonicity In Newsvendor Games Xiangyu Gao, UIUC, 104 S. Mathews, Urbana, IL, 61801, United States, xgao12@illinois.edu, Xin Chen, Zhenyu Hu, Qiong Wang We use the concept of population monotonic allocation scheme (PMAS), which requires the cost allocated to every member of a coalition to decrease as the coalition grows, to study the cooperative newsvendor game. We focus on the dual-based allocation scheme and identify conditions under which it is a PMAS. 2 - Strategic Inventories And Supplier Encroachment Xin Geng, University of Miami, Miami, FL, United States, xgeng@bus.miami.edu, Huiqi Guan, Haresh Gurnani, Yadong Luo We study the interaction between strategic inventories and supplier encroachment in a two-period model. The buyer may withhold excess inventory and the supplier can introduce a direct selling channel in the second period. We find that irrespective of the buyer’s unit holding cost, strategic withholding may occur and the supplier’s encroachment strategy is distorted. 3 - A Non-cooperative Approach To Cost Allocation In Joint Replenishment Xuan Wang, Hong Kong University of Science and Technology, Kowloon, Hong Kong, xuanwang@ust.hk, Simai He, Jay Sethuraman, Jiawei Zhang We consider the joint replenishment game in which the major setup cost is split equally among the retailers who place an order together. Each retailer pays his own holding and minor setup cost. Under this allocation rule each retailer determines his replenishment policy to minimize his own cost anticipating the other retailers’ strategy. We show that a payoff dominant Nash equilibrium exists and quantify the efficiency loss of the non-cooperative outcome relative to the social optimum. 4 - Cost-sharing Mechanism Design For Supply Chain Consolidation Wentao Zhang, University of Southern California, Los Angeles, CA, United States, wentao@usc.edu, Nelson A Uhan, Alejandro Toriello, Maged M Dessouky We design cost-sharing mechanisms to incentivize suppliers to cooperate in freight consolidation, in which suppliers have their shipping demand consolidated before sending it to the customers to benefit from lower transportation rates. The nonconvex and nonconcave cost functions resulting from multiple-truck volumes make it impossible to design a truthful and budget-balanced cost-sharing mechanism under the Moulin mechanism framework. With this in mind, we propose a truthful cost-sharing mechanism that attempts to maximize the fraction of the total cost that will be recovered from the prices charged. We also study our proposed cost-sharing mechanism from the social welfare perspective.

Sustainable Operations and Environmental Decisions Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Xin Wang, Tepper School of Business- Carnegie Mellon University, 5000 Forbes Ave, Pittsburgh, PA, 15213, United States, xinwang1@andrew.cmu.edu 1 - Remanufacturing Strategies For Oems Without Remanufacturing Capabilities We discuss two strategies for how an OEM without remanufacturing capabilities could interact with independent remanufacturers: outsourcing and relicensing. Factoring in the possibility of unauthorized remanufacturing and the resultant participations concern, we solve for the equilibrium strategies and discuss how the problem fundamentals impact the resultant solution. In addition to the analytical results we also present numerical illustrations with behaviorally- estimated parameters for North American and Chinese consumers and highlight how the equilibrium solution depends on the consumer behavior and market characteristics. 2 - Design And Technology Choice For Recycling: Collective Versus Individual Implementation Morvarid Rahmani, Georgia Tech, Atlanta, GA, United States, Morvarid.Rahmani@scheller.gatech.edu, Luyi Gui, Atalay Atasu Efficient and effective treatment of end-of-life products requires not only product design improvements but also advancement in recycling technologies. In this paper, we study how the complementarity between product design and recycling technology affects the efficiency of collective and individual recycling implementations. 3 - Green Technology Development And Adoption: Competition, Regulation, And Uncertainty – A Global Game Approach Xin Wang, Assistant Professor, Hong Kong University of Science and Technology, IELM, HKUST, Clear Water Bay, 15213, Hong Kong, xinwang@ust.hk, Soo-Haeng Cho, Alan Scheller-Wolf When a government is considering tightening a standard on a pollutant, their decision often is influenced by the number of firms being able to meet the tightened standard, because a higher number indicates a more feasible standard. We study how such regulation may affect a firm’s incentive to develop a new technology to reduce a pollutant. To analyze this problem, we use the global game framework recently developed in economics. We find that regulation that considers industry capability, compared with regulation that ignores it, can more effectively motivate development of a new green technology. Surprisingly, uncertainty in the payoff can also help promote development of a new green technology. Zhou Yu, Chongqing University, Chongqing, China, cquyuzhou@163.com, Anton Ovchinnikov, Yu Xiong

WA38 206A-MCC Opt, Robust Contributed Session

Chair: Abhilasha Aswal, Phd Candidate, International Institute of Information Technology, Bangalore, 26 Willow drive, Apt 8B, Ocean, 7712, India, abhilasha.aswal@iiitb.ac.in 1 - Efficient Methods For Stronger Performance Bounds On Two-stage Adaptive Optimization Models

Frans de Ruiter, PhD Candidate, Tilburg University, Warandelaan 2, Tilburg, 5037AB, Netherlands, f.j.c.t.deruiter@tilburguniversity.edu, Dimitris Bertsimas

Many efficient methods have been developed to find suboptimal solutions to two- stage adaptive linear optimization problems. Although these solutions appear to perform very well in practice, bounds on the performance of these solutions are often far off. We present new efficient methods to obtain stronger performance bounds. We show numerically that our method can obtain bounds quickly and improve upon existing techniques.

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