2016 INFORMS Annual Meeting Program

WC38

INFORMS Nashville – 2016

WC36 205B-MCC Economic Models in Supply Chains Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain Sponsored Session Chair: Gizem Korpeoglu, University College London, Gower Street, London, WC1E 6BT, United Kingdom, c.korpeoglu@ucl.ac.uk 1 - Supply Chain Expansion And Integration C Gizem Korpeoglu, University College London, c.korpeoglu@ucl.ac.uk, Ersin Korpeoglu, Soo-Haeng Cho This paper studies expansion and integration of supply chains under uncertain consumer demand. We show that when a supply chain expands to include more suppliers or more retailers, the supply chain profit and efficiency increase. We then consider the integration of two local supply chains (e.g., an economic union such as the European Union (EU) Single Market), and show that the integration may reduce total profit of firms in a supply chain with a smaller ratio of suppliers to retailers. Our analysis suggests that the United Kingdom, which has a smaller ratio of suppliers to retailers than the EU, could enjoy greater supply chain profits after disintegrating from the EU, while the EU may incur profit losses. 2 - Pricing And Inventory Management For An Online Retailer Rui Yin, Arizona State University, ryin@anderson.ucla.edu We consider two selling mechanisms for an online retailer: price markdown and inventory disclosure, and examine the impacts of these mechanisms on the retailer’s sales and profits. 3 - Decentralization And Outsourcing In A Global Supply Chain Under Arm’S Length Principle On Transfer Pricing Kun Soo Park, KAIST, kunsoo@kaist.ac.kr, Bosung Kim, Seyoun Jung, Sang-Hun Park We consider a multinational firm’s (MNF) production and procurement decisions of global supply chain under a regulation on its transfer pricing, i.e., the arm’s length principle. We analyze when it is beneficial for the MNF to open the local division considering the tax rate differential. We also further consider if the local division should seek for outsourcing from the 3rd party instead of the manufacturing division of the MNF. WC37 205C-MCC Topics in Sustainable Operations Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Vishal Agrawal, Georgetown University, Washington, DC, United States, Vishal.Agrawal@georgetown.edu Co-Chair: Isil Alev, Boston College, Boston, MA, United States, isil.alev@bc.edu 1 - The Value Of Product Returns: Intertemporal Product Management With Strategic Consumers Narendra Singh, Indian School of Business, Hyderabad, India, narendra_singh@isb.edu, Karthik Ramachandran, Ravi Subramanian We study the impact of consumer product returns and their potential refurbishing on the intertemporal product strategy of a firm facing strategic consumers, who anticipate future availability and prices of products and time their purchases to maximize net utility. Using a two-period model, we show that returns may act as a commitment device for a firm selling durable products and thereby mitigate the time inconsistency problem. Specifically, a sufficiently high return rate coupled with the firm’s incentive to refurbish the returns allows the firm to credibly commit that the new product will be offered exclusively in the first period. As a result, firm profit could even increase with the return rate. 2 - Lemons, Trade-ins, And Remanufacturing Ximin Huang, Georgia Institute of Technology, 800 West Peachtree Street, NW, Atlanta, GA, 30308, United States, ximin.huang@scheller.gatech.edu, Atalay Atasu, Beril L Toktay Trade-in programs have been shown to partially mitigate the lemons problem in secondary markets. In this paper, we show when and how remanufacturing traded-in products can further improve the efficiency in secondary markets.

3 - Trade-in Remanufacturing, Customer Purchasing Behavior, And Government Policy Renyu Zhang, Assistant Professor of Operations Management, New York University Shanghai, 1555 Century Ave, Shanghai, 200122, China, renyu.zhang@nyu.edu, Fuqiang Zhang We study the impact of customer purchasing behavior on the value of the widely used trade-in remanufacturing program to the firm and the environment. We find a brand new value of trade-in remanufacturing that helps exploit the forward- looking behavior of strategic customers. The value of trade-in remanufacturing is sensitive to customer purchasing behavior. Under intensive strategic customer behavior, trade-in remanufacturing creates a tension between profitability and sustainability: It significantly improves the firm profit but also significantly hurts the environment. We also characterize the government policy that can induce the social optimum under different customer behaviors. 4 - Extended Producer Responsibility (epr) And Export Bans Isil Alev, Boston College, Chestnut Hill, MA, 02467, United States, isil.alev@bc.edu, Vishal Agrawal, Atalay Atasu We focus on the ongoing global debate about the export of electronics to developing countries for recycling under EPR-based legislation. To prevent such practices, the US and the EU introduced partial export bans that only allow the export of electronics with remaining useful life. We compare these bans with no and full export ban scenarios and show that they may lead to exacerbated environmental harm in both developing and developed countries. Chair: Hedayat Alibeiki, McGill University, 1001 Sherbrooke Street West, Desautels Faculty of Management, Montreal, QC, H3A 1G5, Canada, hedayat.alibeiki@mail.mcgill.ca 1 - Teaching And Learning Of Decision Making In Complex Projects Under Uncertainties K Jo Min, Iowa State University, 3004 Black Engineering, Department of Industrial &, Ames, IA, 50011-2164, United States, jomin@iastate.edu, John Jackman, Michelle Zugg How best to teach and learn decision making under uncertainties for complex projects has become a critical topic in operations research and management science education. In this paper, we show how a module in an introductory engineering economy course and an experimental advanced course are used to facilitate this aim. Data-driven results are analyzed and lessons will be shared. 2 - When To Introduce An Online Channel, And Offer Money Back Guarantees And Personalized Pricing? Jing Chen, Professor, Dalhousie University, 6100 University Avenue, Halifax, NS, B3H 4R2, Canada, JChen@dal.ca, Bintong Chen Retail sales through an online channel is increasingly popular in the retailing industry. Customers, however, cannot touch or feel a product before they purchase online. This leads to much higher rates of customer returns in the online channel, which in turn leads to significant costs to retailers. In this paper, we develop a model of a dual-channel structure with an online and a retail channels to examine when a retailer should introduce an online channel and how it should offer returns policy for two channels. 3 - Retail Power Impacts On Assortment Decisions By Power Retailers Hedayat Alibeiki, McGill University, 1001 Sherbrooke Street West, Desautels Faculty of Management, Montreal, QC, H3A 1G5, Canada, hedayat.alibeiki@mail.mcgill.ca Using several game-theoretic models, this paper examines potential impacts of different sources of retail power on the assortment choice of a power retailer. We find that assortment decisions of power retailers are strongly connected to their pricing power in the market, which suggests that pricing and assortment decisions are two different sides of the same coin for power retailers in a competitive market. On the other hand, product cost advantage seems to play a secondary role in comparison with market pricing leadership. We also find that larger market share in all scenarios amplifies the retailer’s control over the market and can have a significant impact on pricing and assortment decisions. WC38 206A-MCC General Session I Contributed Session

439