2016 INFORMS Annual Meeting Program

WB76

INFORMS Nashville – 2016

WB75 Legends C- Omni Economics II Contributed Session Chair: Lorena Alexandra Berumen, Universidad Panamericana, Augusto Rodin 498, Ciudad de Mexico, Mexico, laberumen@up.edu.mx 1 - information Aggregation In Markets With Heterogenous Traders Yaarit Even, Columbia Business School, 601 W 113th Street, Apt 2k, New York, NY, 10025, United States, yeven18@gsb.columbia.edu, Alireza Tahbaz-Salehi We study a rational expectations model, consisting of heterogenous traders with private information. We show that the extent of heterogeneity in the market determines the extent of information revelation via prices and equilibrium inefficiency. In particular, we show that as the heterogeneity in trader valuations is increased, the rational expectations equilibrium would reveal less information about agents’ private information. Furthermore, this reduction in the extent of information revelation leads to more inefficient equilibria. 2 - Is The Chinese Macro Financial System More Resistant To Outside Shocks Yunfei Cao, Beijing Institute of Technology, Beijing, China, caoyunfei1986@163.com, Youzong Xu, Yi Zhang Using the flow data in the macroeconomic accounts of China’s macro-financial system from 1998 to 2012, we develop a dynamic network of the interdependent macro sectors that depicts the connections between the main financial and non- financial sectors in the Chinese economy. Based on this network, we examine the evolution and weakness of China’s macro-financial system by investigating the shock propagation processes. We find that even though by absolute value the foreign sector plays a much smaller role than all the other sectors in China’s macro-financial system, a shock to the foreign sector causes larger loss to the whole Chinese macro-financial system than shocks to other sectors do. 3 - Foreign Direct Investment In Mexico: A Spatial Approach Lorena Alexandra Berumen, Universidad Panamericana, Augusto Rodin 498, Ciudad de Mexico, Mexico, laberumen@up.edu.mx, Roldán Andrés-Rosales, Margarita Hurtado Foreign Direct Investment (FDI) has played an important role in the growth and development of the Mexican economy. The main contribution of this work is the analysis of FDI by sector and of its spillover effect in the different regions in which FDI has been concentrated. Using spatial panel data and a spatial Durbin Model to assess the direct and indirect effects of FDI, we find that in some regions there are positive or negative impacts depending on the sectors. Chair: Amod Basnet, University of North Carolina-Charlotte, 9201 University City Blvd, Fretwell, Charlotte, NC, 28262, United States, abasnet@uncc.edu 1 - Optimal Capacity Management With Limited Buffer Melda Ormeci Matoglu, University of New Hampshire, University of New Hampshire, 10, Durham, NH, 03824, United States, melda.ormecimatoglu@unh.edu We use a Brownian motion to model the problem of managing capacity and determining optimal buffer size in a BTO environment. The controller can change the processing rate as well as reject orders or idle the system. We seek a policy that minimizes long-term average cost of control and holding cost. We show that a simple control band policy is optimal and determine its parameters. 2 - Efficient Markov Chain Decomposition Algorithm Based On The Total Expectation Theorem Katsunobu Sasanuma, Assistant Professor, Stony Brook University, Stony Brook, NY, 11794, United States, katsunobu.sasanuma@stonybrook.edu, Stephen Roehrig, Robert Hampshire, Alan Scheller-Wolf We propose an efficient decomposition algorithm for solving large Markov Chains, based on the total expectation theorem (the law of total expectation) applied in a Markov Chain setting. Tests of our algorithm on several examples show that it possesses an exponential speed of convergence in terms of the number of iterations. We also discuss potential Markov chain structures that could cause a slowdown of convergence and propose the means to overcome these issues. WB76 Legends D- Omni Applied Probability II Contributed Session

2 - Hybrid Flow Shop Scheduling Problem With Parallel Lines Arshad Ali, PhD Student, University of Manitoba, Winnipeg, MB, Canada, alia@myumanitoba.ca, Yuvraj Gajpal, Tarek Y. El Mekkawy This paper considers the special case of hybrid flow shop problem where machines are arranged in parallel lines. Each line has multiple stages but the number of stages in each line are same. A job is required to go through only one of the lines to become final product. One job can be assigned to only one line. The problem involves finding job sequence for each line to minimize the total competition time of jobs. Three heuristics has been developed to solve the problem. A new benchmark problem instances has been created to evaluate the performance of the proposed heuristics. 3 - A Three-stage Intelligent Solution Approach To Order Picking Scheme For Vegetables Under B2c Direct Sale In China Xiaochun Feng, Dalian University of Technology, No.2 Linggong Road, Ganjingzi District, Dalian, 116024, China, fxc11011@126.com, Xiangpei Hu The paper focuses on the ‘farm-to-door’ order picking problem of organic vegetables in online direct sales, with the objective of enhancing the scientific, efficient and on-time processing level. Taking online order picking scheme generation as a breakthrough point, by applying the theories of fuzzy clustering artificial intelligence and operational research, this paper presents a three-stage solution approach to order picking problem that aims to significantly reduce the solution’s state space. Finally, a numerical example is used to demonstrate the efficiency of the intelligent solution approach. Chair: Jiahua Wu, Imperial College Business School, Office 382, Tanaka Building, Imperial College London, London, SW7 2AZ, United Kingdom, j.wu@imperial.ac.uk 1 - Selective Newsvendor Problem With Dependent Lead Time And Marketing Decisions Jianing Zhi, Penn State Erie The Behrend College, Eire, PA, 16509, United States, jzz5296@psu.edu, Burcu B Keskin We consider a company that experiences quantity-dependent lead times from the supplier. Due to a limited sales force and lead time issues, the company may not be able to meet all customer demands. We develop mixed integer nonlinear programming model to maximize the total expected profit by determining order quantity, demand satisfaction percentage, and agent-customer match up. We evaluate the model with varying parameters, including demand, lead time, capabilities of agents, and waiting time tolerance of customers to estimate their impacts on total expected profit, ordering policies and marketing strategies. 2 - The Impact Of Consumer Quality Target On Product Line Design Lucy Gongtao Chen, National University of Singapore, NUS Business School, Biz 1 Mochtar Riady Building, #8-60, Singapore, 119245, Singapore, bizcg@nus.edu.sg, Qingshan Kong In this paper, we study a firm’s product line design when consumers care about not only the offered product quality but also the difference between the offered quality and their target quality level. In a market where consumers have heterogeneous quality targets, we find that targets have a significant impact on the product line offering strategy. In particular, both single product line strategy and full product line strategy can be optimal and when a full product line is offered, both the downward distortion of the low quality level and the upward distortion of the high quality level can be possible. 3 - Big Data vs Small Data: Consumer Profiling With Data Requirements Jiahua Wu, Imperial College Business School, Office 382, Tanaka Building, Imperial College London, London, SW7 2AZ, United Kingdom, j.wu@imperial.ac.uk, Tommaso Valletti We consider a model where a monopolist can profile consumers in order to price discriminate among them, and consumers can take costly actions to protect their identities and make the profiling technology less effective. We show that the optimal investment level from the monopolist is closely related to the flexibility of consumers to conceal their identities as well as to data requirements.We also show that the monopolist has a tendency to invest excessively. WB74 Legends B- Omni Ops Mgt/Marketing II Contributed Session

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