Informs Annual Meeting 2017

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INFORMS Houston – 2017

3 - An Unpaired Pickup and Delivery Problem with Time-Dependent Assignment Costs Farshid Azadian, Embry-Riddle University, 600 S Clyde Morris Blvd., College of Business, Daytona Beach, FL, 32114, United States, azadianf@erau.edu, Alper E. Murat, Ratna Babu Chinnam This study considers a freight forwarder’s operational implementation of alternative access airport policy in a multi-airport region for cargo transportation. Given a set of heterogeneous air cargo customers, the forwarder’s problem is to simultaneously select air cargo flight itineraries and schedule the pickup and delivery of customer loads to the airport(s). This problem is formulated as a novel pickup and delivery problem, where the delivery cost is both destination and time dependent. A mixed-integer linear model in presented and an efficient solution method based on decomposition is developed. The performance of the solution algorithm is evaluated by computational experimental study. 4 - A Comprehensive Approach to Understanding the Future of Air France KLM’s CDG Hub Richard Solene, Air France/KLM, Paris, France, na/nasorichard2@airfrance.fr Scheduling and Operations have always been fighting over the hub. Should the hub be peaked in banks of activity to improve the intrinsic connectivity of the network and its attractiveness, at the risk of driving up the costs of operations? Or should we flatten the hub activity to lower the costs of operations, while reducing connectivity opportunities for passengers in the meantime? With state-of-the-art machine learning and operations research techniques, we were able to develop a comprehensive two-sided tool, one side for computing the potential revenue of flight schedules, and one side for estimating their total cost of operations. Best practices and recommendations emerging from this tool helps Air France KLM in the building of the perfect schedule. 351D Military Applications Awards Sponsored: Military Applications Sponsored Session Chair: Andrew Oscar Hall, United States Military Academy, West Point, NY, 10996, United States, andrew.hall@usma.edu Chair: Francisco R Baez, US Army, US Army, Woodbridge, VA, 22193, United States, francisco.r.baez.mil@mail.mil 1 - Koopman Award Winner Jun Zhuang, University at Buffalo, SUNY, 317 Bell Hall, Buffalo, NY, 14260, United States, jzhuang@buffalo.edu Abstract not available. 351E Supply Chain Management Contributed Session Chair: Ryan Sanders, University of Arkansas, Cave City, AR, United States, rpsander@uark.edu 1 - A Decision Model to Examine the Impact of Flexibility and Agility on Mitigating Supply Chain Disruptions Mansoor Shekarian, Graduate Student, North Carolina A&T.State University, 3100 N Elm St., Apt #22L, Greensboro, NC, 27408, United States, mshekarian@aggies.ncat.edu, Mahour Parast, Seyed Vahid Reza Nooraie This paper examines the effect of flexibility and agility on improving supply chain responsiveness. We examine a multi-site, multi-period, multi-transportation channel, and multi-product planning in a supply chain under supply risk and demand risk. We determine the relationship between three objective functions related to responsiveness, risk, and cost, and discuss the impact of agility and flexibility on mitigating supply chain disruptions. 2 - Disruption Risk Management for Two-echelon Supply Chains: Early Commitment to Finished Goods Florian Lücker, Kellogg School of Management, Evanston, IL, United States, florian.lucker@kellogg.northwestern.edu Florian Lücker, Swiss Federal Institute of Technology EPFL, Lausanne, Switzerland, florian.lucker@kellogg.northwestern.edu, Sunil Chopra, Ralf W. Seifert We consider the two-echelon inventory problem for different supply chain topologies (serial, assembly and distribution) in the presence of disruption risk and stochastic demand. For the assembly supply chain we show that in the presence of disruption risk downstream inventory is larger in the assembly supply MD34 MD35

chain compared to a serial supply chain. We call this effect early commitment as the finding is different from optimal safety inventory policies in assembly supply chains where often a delayed differentiation is optimal. In addition, we elaborate on when early commitment occurs in distribution supply chains. 3 - Differences in the Way Inventory and Reserve Capacity are Used to Deal with Supply Disruption Risk in Two-echelon Supply Chains Florian Lücker, Kellogg School of Management, Evanston, IL, United States, florian.lucker@kellogg.northwestern.edu Florian Lücker, Swiss Federal Institute of Technology EPFL, Lausanne, Switzerland, florian.lucker@kellogg.northwestern.edu This research focuses on managing supply chain disruption risks using inventory and reserve capacity in a two-echelon supply chain under stochastic demand. We show that in assembly supply chains optimal reserve capacities are higher upstream whereas optimal inventory levels are lower downstream relative to a comparable serial supply chain. We further illustrate differences in the use of reserve capacity versus inventory held to deal with supply disruption risk. 4 - Integrated Supply Chain Design and Planning: A Risk Management Perspective Nasim Nezamoddini, State University of New York-Binghamton, 222 Main Street, Apt 1, Binghamton, NY, 13905, United States, nasim.nezam@gmail.com This research proposes an optimization framework to manage internal and external risks during strategic, tactical, and operational level decisions. The proposed model addresses uncertainties associated with demands, disruptions, delays, and failures. The structural design and communications plans between different centers are determined based on the risk perspective of the decision maker. A modified genetic algorithm is designed to solve the model. The experimental results show that increasing the backup paths and capacities makes the supply chain more robust against the potential risks. 5 - Cash to Cash and the Zone of Concern Joyaditya Laik, University of Pittsburgh, 241 Mervis Hall, Katz Business School, University of Pittsburgh, Pittsburgh, PA, 15260, United States, joyaditya.laik@pitt.edu, Prakash Mirchandani A firm which refers Cash Conversion Cycle (C2C) as a test of operational efficiency, might embark upon improvement projects which require costly investments. We contend that such steps may be uncalled for, since what is ‘inferior’ to a benchmark value, may really be an unfavorable fiscal cycle or seasonality in comparison to the benchmark firm. The effect of such idiosyncrasies limit the vision of firms to a ‘zone of concern’ which is a subset of the period of financial reconciliation, thereby rendering the firm’s actions myopic. We propose that use of C2C without ‘relevant’ business context may be precarious which managers must be observant of. 5 - Development of a Logistics Risk Assessment Tool Ryan Sanders, University of Arkansas, 2550 Sunset Ridge, Cave City, AR, 72521, United States, rpsander@uark.edu This research aims to better understand what risks are present along each point in the supply chain and to develop a way to assess those risks. By organizing findings from literature and implementing an online risk assessment tool, we hope to allow organizations to identify and quantify risks along their supply chains. This user-friendly, web-based risk assessment tool is two-fold; a gap analysis will indicate which specific area of the supply chain a company should focus on improving, and a multi-objective decision analysis will quantify the benefit of different practices a company could use. 351F Best Service Science Cluster Award Paper Competition #II of II Sponsored: Service Science Sponsored Session Chair: Robin Qiu, Pennsylvania State University, Malvern, PA, 19355, United States, robinqiu@psu.edu 1 - An Instrumental Variable Tree Approach for Detecting Heterogeneous Treatment Effects in Observational Studies Guihua Wang, University of Michigan, 1169 McIntyre Drive, Ann Arbor, MI, 48105, United States, guihuaw@umich.edu, Jun Li, Wallace Hopp We develop a new Instrumental Variable (IV) tree approach for detecting heterogeneous treatment effects in observational studies. We show that the IV tree approach effectively corrects for endogeneity issues and partitions subjects into groups such that those in the same group have similar treatment effects and those in different groups have different treatment effects. We demonstrate the practical application of the IV tree approach by using colectomy as the clinical setting to compare teaching (treatment) and non-teaching (control) hospitals and find that the outcome differences between teaching and non-teaching hospitals are heterogeneous across patient types. MD36

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