Informs Annual Meeting 2017

TA33

INFORMS Houston – 2017

3 - Steel B2b Electronic Market in China: Does it Really Matter? Wen Fang, PhD, Lecturer, Xidian University, Mailbox 106,No.266, Xifeng Road, Xi’an 710126, PR China, Xi’an, 710126, China, Ph.D.,az-moju@163.com China steel industry has emerged a typical market, which is B2B electronic market, while other countries usually have only steel futures market and spot market. Many commodities prices fluctuating followed by steel price changes. The development of steel markets plays an important role in the development of China’s commodity market as well as global commodity market. Steel electronic market is in the process of vigorous development. There are three kinds of steel price signals: forward transaction price from electronic market, futures price and spot price. Research on price discovery in steel markets has important theoretical significance and practical application value. 4 - Game Theory and Weighted Cash-to-cash Metric: Optimizing Economic Value of Seller-buyer Transaction Mazen Hammady, PhD, University of North Texas, 201 Inman St, Apt# 6305, Denton, TX, 76205, United States, mazen.hammadybrho@unt.edu, Aaron Glassburner, PhD, Wesley Randall, David Nowicki, Brian Sauser The use of joint metrics between a seller and buyer allows differences in inventory carrying cost and capital costs to be sources of economic value added (EVA). This research models seller-buyer transactions as a collaborative game with a joint weighted cash-to-cash metric as the payoff function. The model uses strategies of shifting inventory and payment to increase firm and supply chain EVA, thus it is posited as a collaboration decision tool. Also, the developed model optimizes operation and finance functions, lowers trading risk, and increases profitability without additional investment. 5 - Can We Understand the Macroscopic Behavior of the Equity Markets? Abdullah AlShelahi, University of Michigan, 2410 Leslie Circle, Ann Arbor, MI, 48105, United States, shelahi@umich.edu, Romesh Saigal In this research, we aim to build a market-based framework from the viewpoint of fluid dynamics and its physics. We seek to develop physical sensors made up of an algorithm in the markets that alerts regulators to unusual activities in the flow of stocks. The fluid flow in physics will be used to measure the irregularities found in the behavior of the financial markets. This marriage between physics and finance will bring greater clarity to those who run the stock markets, as well as regular investors who will no longer worry that they are trading in a losing or rigged game. 6 - Market Anomalies of Credit Rating Yen-Ju Chiang, Student, National Cheng Kung University, No.1, University Road, Tainan, 701, Taiwan, r48031016@mail.ncku.edu.tw, Shuang-Shi Chuang Our aims to examine the market anomalie of credit rating in Taiwan stock market. we test whether investors can get abnormal returns by different credit rating or not. Especially, we contribute with new knowledge about how investors choice undervalue stocks by credit rating in many situations. Furthermore, our sample includes listed firms on the Taiwan Stock Exchange during 1th of January 2000 to 31th of December 2016. Our regression model is Fama- French Five factor Model, consisting overall market, size, value, profitability and investment factor can predict future stock price. we found creding rating could predict stock return. 351B Operations/Finance Interface Contributed Session Chair: Houcai Shen, Nanjing University, Nanjing, China, hcshen@nju.edu.cn 1 - Price Delegation or Not? the Effect of Heterogenous Sales Agents under Asymmetric Information Hongyan Xu, Chongqing University, School of Economics & This study examines the impact of heterogeneous sales agents with private information about type-dependent reservation on price delegation decision. The firm prefers centralized pricing when the reservation difference is small or large, and prefers delegated pricing with moderate reservation difference. Specially, when only equilibrium pooling can be offered for two pricing schemes, delegation outperforms centralization, due to the fact that the benefit from pricing flexibility by delegation dominates the hurt from less effort incentive. TA32 Business Admin, Chongqing, 400030, China, xuhongyan@cqu.edu.cn, Jian Chen, Liming Liu

2 - Seeding Strategies for New Product Launch in the Presence of Negative WOM Fang Cui, Xi’an Jiaotong Univercity, Xi’an, China, cuifang2011@stu.xjtu.edu.cn Taking negative WOM into account, this paper examines the impact of seeding programs on firm profit and market penetration and explores the optimal seeding targets. We use the agent-based modeling method to explore performances of three seeding targets: early adopters, hubs and randomly chosen consumers and the influences of three factors, mean and variance of the probability of consumers spreading negative WOM, and consumer homophily, which represents the similarity of adjacent consumers. The findings suggest that in the presence of negative WOM, on average, seeding early adopters can generate highest profit and largest market penetration, followed by seeding hubs and then by randomly seeding. 3 - Warranty Pricing with Consumer Learning Yong Lei, Southwestern University of Finance and Economics, IELM Dept, Chengdu, 611130, China, leiyong@swufe.edu.cn, Qian Liu, Stephen Shum We consider a problem in which a firm dynamically prices a product and its warranty service over time. Consumers can learn about the reliability of products based on warranty prices. We find that warranty sales will not generate profits directly. However, offering a modest warranty still benefits the firm’s overall profits. We also show that consumers’ beliefs and the firm’s warranty policy converge in the long run. In a steady state, either a fraction of consumers will purchase a warranty or no consumer will purchase a warranty. Lastly, we note a firm benefits from consumer learning by hiding the information about the true product reliability only when the true product failure rate is relatively high. 4 - The Market Entry Strategy of Contract Manufacturers Houcai Shen, Professor, Nanjing University, Department of Management Science, and Engineering, Nanjing, 210093, China, hcshen@nju.edu.cn, Jiahui Zhou In this paper, we consider a supply chain consists of an original equipment manufacturer (OEM) who outsources its production process to a contact manufacturer (CM). The main issues we address are, should the CM enter the market with vertical differential product where the OEM sells products to. We develop two game theoretical models when CM entry the market or not, and then make comparative analysis of the equilibrium outcomes. 351C Airline Schedule Design Sponsored: Aviation Applications Sponsored Session Chair: Vikrant Vaze, Dartmouth College, Hanover, NH, 03755, United States, vikrant.s.vaze@dartmouth.edu 1 - An Approximate Dynamic Programming Approach for Aircraft Maintenance Scheduling Qichen Deng, Delft University of Technology, Delft, Netherlands, Q.Deng@tudelft.nl An approximate dynamic programming (ADP) approach is proposed to optimize the aircraft A-check and C-check schedule. It aims at minimizing the total unused flight hours of a fleet considering aircraft type, status and operational constraints. For each calendar day, the ADP approach evaluates all possible actions (no check, A-check or C-check etc.) and find the best one. This study is one of the few works optimizing both A-check and C-check schedule at the same time and presents the first application of ADP on aircraft maintenance planning. It also shows that ADP makes large scale application feasible and produces promising results in terms of computational time and solutions quality. 2 - Robust Airport Stand Allocation Bert Dijk, Beontra, Karlsruhe, Germany, dijk.bert@gmail.com, Bruno F.Santos, João P. Pita This paper presents an innovative approach to the tactical planning of aircraft remote and contact stands allocation at airports. We use the concept of recoverable robustness to test the robustness of the plans and to select the most robust allocation plan, without compromising its efficiency. This is the first work to discuss airport commercial revenues as a metric for the stand allocation problem. Six days of operations at the Guarulhos Airport (Sao Paulo) are used to test the approach. The solutions obtained show that the proposed approach outperform the solutions of a traditional robust approach. TA33

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