2016 INFORMS Annual Meeting Program

SB26

INFORMS Nashville – 2016

2 - Waste Reduction Strategies: Less Is More Luca Berchicci, Erasmus University, Rotterdam School of Business, Rotterdam, Netherlands, Berchicci @erasmus.edu Nilanjana Dutt, Will G Mitchell Manufacturing firms seek to develop and implement techniques to improve production efficiency by obtaining information from various knowledge sources. Examining a greater number of knowledge sources should help firms find a viable solution to improve production efficiency, but it also raises the costs of collecting and using new information, which may ultimately hinder performance. Due to these tradeoffs, a key initial choice is how many knowledge sources to search. Based on U.S. manufacturing facilities that seek to improve production efficiency by reducing their annual toxic waste output, our results indicate that examining one knowledge source is the best approach. 3 - Reload And Relaunch: Strategic Governance Of Platform Ecosystems Joost Rietveld, Erasmus University, Burgemeester Oudlaan 50, Mandeville (T) Building, Room 7-41, Rotterdam, 3072AP, Netherlands, rietveld@rsm.nl, Melissa A Schilling, Christiano Bellavitis Platforms have a number of levers for managing their ecosystems. However, they must use them carefully: how and by whom value is captured is shaped by the dynamics between complementors and the platform itself. We develop a framework of value creation and value capture yielding implications for whether and when platforms should selectively promote complements. We analyze data from seventh generation video games, assessing both how games are selected for promotion, and how promotion affects sales. Platform owners do not promote best in class complements; they invest in underappreciated ones where there is more marginal value to be unlocked, and with whom the platform has greater bargaining power. 4 - Value-Based Outsourcing Joaquín Poblete, Pontificia Universidad Catolica de Chile, s, s, Chile, joaco.poblete@gmail.com, Jorge Martabit Using a value-based approach we analyze make-or-buy choices in settings in which value created by activities depend on the set of activities being performed. We show that when activities are complements, optimal make or buy choices tend to follow a common pattern, i.e., they are all insourced or outsourced, whereas firms tend to choose different governance modes when activities are substitutes. We also found that coordination advantages of insourcing are more important when activities are complements, while cost advantages of outsourcing are more important when activities are substitutes. SB25 110A-MCC Improving Efficiency of Supply Chains through Scheduling Invited: Project Management and Scheduling Invited Session Chair: Chelliah Sriskandarajah, Texas A&M University, College Station, TX, United States, chelliah@mays.tamu.edu Co-Chair: Yunxia Peter Zhu, Assistant Professor, Rider University, Sweigart Hall 358, 2083 Lawrenceville Road, Lawrenceville, NJ, 08648, United States, yuzhu@rider.edu 1 - Provider Selection Framework For Bundled Payments In Healthcare Seokjun Youn, Texas A&M University, College Station, TX, United States, syoun@mays.tamu.edu, Anupam Agrawal, Subodha Kumar, Chelliah Sriskandarajah Well-designed incentive system can lead to the successful operation of bundled payment program. Focusing on provider selection and evaluation problems, we develop a framework that aims to select better providers than existing method while balancing cost reduction, quality of care, and efficiency measures. 2 - A Framework For Analyzing The U. S. Coin Supply Chain Yiwei Huang, Visiting Assistant Professor, The Pennsylvania State University, State College, PA, United States, yuh201@psu.edu This is the first study that addresses operational issues within a Coin Supply Chain (CSC) and presents a framework, an optimal/near-optimal operating policy, and a robust planning system for the Federal Reserve System and Depository Institutions to increase their efficiency and effectiveness of coin ordering, producing, packaging, distribution, and inventory management by treating the U.S. CSC as a closed-loop supply chain from both supply and demand-side perspectives.

3 - Recent Results In Scheduling Dual Gripper Robotics Cells Kyung Sung Jung, University of Florida, ksjung@ufl.edu, Harry Neil Geismar, Michael L Pinedo, Chelliah Sriskandarajah We focus on the problem of finding 1-unit cyclic sequence of robot movements in dual-gripper buffer-less robotic cells designed to produce identical parts under the free-pickup criterion. We establish conditions where the problem of finding an optimal cycle is NP-hard. The remaining cases can be shown to be polynomial solvable. 4 - Cross-dock Terminal Scheduling Yunxia Zhu, Rider University, yuzhu@rider.edu Harry Neil Geismar, Chelliah Sriskandarajah, Inna Drobouchevitch We study various scheduling problems encountered in cross-dock terminals. In a general cross-dock scheduling problem, a set of inbound trucks are assigned to a fixed number of unload docks. Items are first unloaded from these trucks then are transferred to outbound trucks to be dispatched to customers. The typical objective is to minimize the total time spent to perform such unloading and loading operations for a planning horizon. We also study other objective functions under various cross-dock terminal environments (e.g., with no-wait processing and with the presence of temporary storage). Invited: Auctions Invited Session Chair: Martin Bichler, Technische Universitat Munchen, Munich, Germany, bichler@in.tum.de 1 - Trust In Procurement Interactions Nicolas Fugger, ZEW Mannheim, L7, 1, Mannheim, 68161, Germany, nicolas.fugger@zew.de, Elena Katok We investigate the observation that auctions in procurement can be detrimental to the buyer-seller relationship. Poor relationship can result in a decrease in trust by the buyer during the sourcing and an increase in opportunistic behavior by the supplier after the sourcing. We consider a setting in which the winning supplier decides on the level of costly quality to provide to the buyer, and compare a standard reverse auction and a buyer-determined reverse auction in the laboratory. We find that buyer-determined auctions result in higher prices but also improve cooperation between the buyer and the selected supplier. 2 - An Optimal Procurement Mechanism With Post-auction Cost-reduction Investigations Qi (George) Chen, University of Michigan, Ann Arbor, MI, United States, georgeqc@umich.edu, Damian Beil, Izak Duenyas This paper studies the optimal mechanism design problem of a buyer who needs to procure from a pool of qualified suppliers in a setting where she can choose to investigate the suppliers to identify cost-reduction opportunities which reduce their costs after the bids are collected, and then awards the contract. We fully characterize the optimal mechanisms and show that for symmetric suppliers, our mechanisms create ex ante win-win situations for everyone compared to the optimal mechanism without investigations. The win-win situation may break down when suppliers are sufficiently asymmetric, but no supplier has the incentive to unilaterally block investigation. 3 - Linear Pricing In Large-scale Combinatorial Exchanges Vladimir Fux, Technical University of Munich, vladimir.fux@tum.de, Martin Bichler Linear and anonymous competitive equilibrium prices are desirable in multi- object auctions, but unfortunately such prices typically do not exist in combinatorial exchanges. We discuss the market design of a large-scale combinatorial exchange for fishery access rights where linear and anonymous prices is a requirement and minor efficiency loss can be tolerated. We analyze the trade-offs of different payment rules relevant for an auction designer, in particular with respect to the welfare loss they incur. Via analytical models and numerical simulations, we show that these losses can be up to 100% in worst-case scenarios, but that these losses are small on average in larger markets. 4 - Equilibrium Bidding Strategies In Ex-post Split-award Auctions With Diseconomies Of Scale Gian-Marco Kokott, Technical University of Munich, Munich, Germany, gian.marco@dss.in.tum.de, Martin Bichler, Per Paulsen Ex-post split-award auctions are a wide-spread form of combinatorial procurement auctions. We focus on markets with diseconomies of scale, which is practically relevant and strategically challenging, since bidders have to coordinate on the efficient outcome. We show that the first-price sealed-bid and the Dutch ex-post split-award auction are not strategically equivalent. The first-price sealed- bid format exhibits a coordination problem for bidders, whereas the Dutch has a unique and efficient equilibrium. We also analyze a combination of both formats and compare all three auctions with respect to efficiency and costs. In lab experiments, we find support for the theoretical results. SB26 110B-MCC Procurement Auctions

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