2016 INFORMS Annual Meeting Program

SC27

INFORMS Nashville – 2016

SC27 201A-MCC Panel: Emerging Themes in Innovative Operations Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Moderator: Nitin Joglekar, Boston University School of Management, 595 Comm Ave, Boston, MA, 02215, United States, joglekar@bu.edu Co-Moderator: Stylianos Kavadias, University of Cambridge, Trumpington Street, Cambridge, CB2 1AG, United Kingdom, s.kavadias@jbs.cam.ac.uk 1 - Innovative Operations Nitin Joglekar, Boston University School of Management, joglekar@bu.edu We draw upon an expert panel to discuss emerging innovation research themes in the manufacturing and service operations context by raising the following “when, what and how” questions: (i) Are operations essential for creating innovation (e.g. in terms of product and services)? (ii) Are operations essential to compete in innovative ways (e.g. through business model innovations and/or through supply chain innovations)? (iii) Are operations based innovations critical in establishing new businesses (e.g. through entrepreneurship)? 2 - Panelist Saif Benjaafar, University of Minnesota, saif@umn.edu 3 - Panelist Raul Chao, University of Virginia, ChaoR@darden.virginia.edu 4 - Panelist Sanjiv Erat, University of California-San Diego, serat@ucsd.edu 5 - Panelist Karan Girotra, INSEAD, karan.girotra@insead.edu 6 - Panelist Guillaume Roels, UCLA, groels@anderson.ucla.edu 7 - Panelist Manuel Sosa, INSEAD, manuel.sosa@insead.edu SC28 201B-MCC Empirical Research in Operations Management Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Nathan C. Craig, Ohio State University, 630 Fisher Hall 2100 Neil Avenue, Columbus, OH, 43210, United States, craig.186@osu.edu 1 - Dynamic Optimization Of Multichannel Advertising Campaigns In An Online Advertising Supply Chain Changseung Yoo, The University of Texas at Austin, Austin, TX, United States, csyoo@utexas.edu, Anitesh Barua, Genaro Gutierrez We examine channel structures and pricing models in an online advertising supply chain using a proprietary dataset. The supply chain consists of two channels - a network and an exchange - from which an ad agency buys advertising inventory and sells them to an advertiser. We design a nonlinear Kalman filter to estimate an extension of the Sethi advertising model and derive the optimal closed-loop strategies for the advertising agency. We then compare them to the approximate solutions based on the Nerlove-Arrow model and derive managerial insights. Our analyses furnish strong support for the synergy effects between the channel structures due to strategic complementarities between the channels. 2 - Variability In Labor Schedules: Effects On Store Performance And Employee Turnover

3 - Reference Points In Replacement Purchases Mahdi Mahmoudzadeh, Georgia Institute of Technology, mahdi.mzh@scheller.gatech.edu We study reference-points in replacement purchases, trade-ins and upgrades, wherein customers replace their in-use product with its newer version. Through an experimental study, we find that with trade-ins, irrespective of the new version’s innovation level, the secondary market price is the reference-point. With upgrades, however, depending on the innovation level and the manufacturer’s decision on co-production of successive versions, the new version’s price, the current selling price the old version, or the original price of the old version is the reference-point. We also find that the manufacturer can always frame a replacement purchase to induce the same reference-point as in buy- backs. 4 - Rewarding Service And Serving Rewards: Strategic Complications To Order Management Somak Paul, Doctoral Student, The Ohio State University, 600 Fisher Hall, 2100 Neil Avenue, Columbus, OH, 43202, United States, Paul.865@osu.edu, Nathan C. Craig, Elliot Bendoly We conduct laboratory experiments to identify how order complexities including strategic-level factor relating to demand management affect the ordering behavior of those in purchasing management roles and thus induce variation in upstream orders. We further investigate how the backorder and surplus cost structure moderates the relationship between the service-dependent demand and order variation. We finally recommend strategic directions for the purchasing manager and suggest personality traits to look for while choosing purchasing managers. SC29 202A-MCC MSOM Energy and Sustainability Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Yangfang Zhou, Singapore Management University, Singapore, Singapore, helenzhou@smu.edu.sg 1 - Strategic Forward Trading And Technology Heikki Peura, London Business School, hpeura@london.edu, Derek W Bunn We analyze how operational factors of production, such as its flexibility and reliability, can influence market prices indirectly through altering the balance of spot and forward trading. As a result, increasing the capacity of intermittent renewable electricity generation, despite its lower marginal cost, may not necessarily reduce prices. 2 - Repositioning Operations In One-way Vehicle Sharing Systems Long He, National University of Singapore, longhe@nus.edu.sg Zhenyu Hu, Meilin Zhang We study the repositioning problem in one-way vehicle sharing systems, in order to balance the fleet and meet the demands. We formulate the problem as a dynamic program and also discuss the optimal policy. 3 - Merchant Operations Of An Aluminium Smelter Selvaprabu Nadarajah, College of Business, University of Illinois at Chicago, Chicago, IL, United States, selvan@uic.edu, Stein-Erik Fleten, Denis Mazieres, David Pisinger, Alessio Trivella Motivated by an Aluminium producer, we consider the merchant operations of a smelter facing predictable Aluminium demand and volatile electricity prices. This smelter endows a merchant with flexibility to (i) choose between the production, mothballs, and shutdown operating states; and (ii) procure electricity needed for operations using forward contracts with different maturities and underlying currencies. We formulate the management of these flexibilities as a stochastic optimization problem. We overcome the intractability in computing optimal operating and sourcing policies by combining least squares Monte Carlo with stochastic programming. Preliminary findings will be discussed.

Hyun Seok Lee, University of North Carolina at Chapel Hill, Chapel Hill, NC, United States, Hyunseok_Lee@kenan- flagler.unc.edu, Saravanan Kesavan, Camelia Kuhnen

Millions of employees face work schedules that are changed frequently by firms trying to match labor to demand. Prior work has shown that unstable schedules have negative consequences on worker life quality. Here, using detailed personnel records from the retail industry, we find that variability in labor schedule negatively affects store performance metrics such as sales, number of transactions, and employee turnover.

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