Informs Annual Meeting 2017

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INFORMS Houston – 2017

2 - Service Outsourcing Emphasis and Hospital Performance Sachin B. Modi, Wayne State University, Rm 300.07, Detroit, MI, 48202, United States, ge3918@wayne.edu, Saurabh Mishra, Peter Salzarulo Hospitals often face the decision of delivering services by relying on contracted providers versus utilizing internal resources. Such an emphasis on outsourcing to service providers can allow for better financial performance, but can also lower patient outcomes. Relying on data from US hospitals over a 14 year period, this study investigates the influence of service outsourcing emphasis of hospitals on patient length of stay and operating margins. Further, the study also highlights key boundary conditions in these relationships. The results provide important guidelines for hospital administrators, regarding their service outsourcing strategy. 3 - Managing Physician Preferred vs. General Medical Supplies – The Use of Consignment Inventory Claudia Rosales, Michigan State University, N350 N.Business Complex, East Lansing, MI, 48824, United States, Rosales@broad.msu.edu, Anand Nair In healthcare medical devices and materials represent the largest cost after labor. Hospitals spend significant resources purchasing and managing general as well as specialty medical supplies typically called physician preferred items. One of the ways hospitals seek to reduce the cost of medical supplies is by the use of inventory consignment. We analyze the impact of the use of consignment inventory for general and physician preferred medical supplies. Our models capture both the potential benefits that could be obtained with the use of consignment and the system conditions that can result in increased costs. Results are compared to real hospital data. 4 - The Effects of Health Information Technology and Communication Quality on Medical Malpractice Lawsuits Luv Sharma, University of South Carolina, Columbia, SC, United States, Luv.Sharma@moore.sc.edu, Carolyn Queenan This paper uses data from 168 acute care hospitals in Florida to study the impact of HIT and caregiver-patient communication quality on the number of medical malpractice lawsuits filed against the hospital. Results demonstrate a direct impact of communication quality and an indirect impact of HIT in influencing lawsuits. 332A Empirical Research in Service Operations Sponsored: Manufacturing & Service Oper Mgmt, Service Operations Sponsored Session Chair: Ruomeng Cui, Bloomington, IN, 47401-7739, United States, cuir@indiana.edu 1 - Impact of Unexpected and Expected Breaks on Worker Productivity Pradeep Kumar Pendem, University of North Carolina-Chapel Hill, 110 Mistywood Circle, Apt S, Chapel Hill, NC, 27514, United States, pradeep.pendem@gmail.com Using harvesting worker productivity data from a U.S based agricultural firm, we evaluate effects of two types of breaks (expected versus unexpected), and two distinct forms of unexpected breaks, and find that unexpected breaks can, under certain conditions, yield immediate post-break performance increases. We supplement our findings by a conceptual laboratory replication showing that unexpected breaks lead to increased performance when they allow people to maintain attention on the focal task. Our results have implications on design of operational systems and need for emphasis on studying the break type prior to taking any corrective action. 2 - How Local Economic Factors Affect Retail Inventory Liquidation Value Nathan C. Craig, 630 Fisher Hall, 2100 Neil Avenue, Columbus, OH, 43210, United States, craig.186@osu.edu, Ananth Raman Retailers close stores for many reasons, from changes in strategy to bankruptcy. When closing a store, most retailers liquidate the store’s inventory in place via the process of store liquidation. We collect data from an asset disposition firm about 2,000 store liquidations involving 31 retailers and $4B of inventory. We observe that inventory liquidation values vary substantially across store closings, even for a single retailer. We combine the proprietary data with store-level economic data and identify factors that significantly affect inventory liquidation value. 3 - The Importance of Operational Efficiency for Promotional Inventory Campaigns: Empirical Evidence Ioannis Stamatopoulos, University of Texas at Austin, McCombs School of Business, 2110 Speedway B6000, Austin, TX, 78705, United States, yannis.stamos@mccombs.utexas.edu We use the adoption of an innovative tracking and monitoring technology by a brick and mortar retail chain in the US to causally identify the impact of operational execution on the effectiveness of promotional inventory campaigns. MB11

Our findings suggest that the potential gains from increasing operational efficiency in this setting are economically significant. 4 - Operational Transparency Increases Trust in and Engagement with Government Ryan Buell, Harvard Business School, Morgan Hall 429, Boston, MA, 02163, United States, rbuell@hbs.edu, Ethan Porter, Michael Norton We propose that revealing the “submerged state,” by making sure that citizens can see the often-hidden work that government performs, enhances both perceptions of government and engagement with it. Three studies, comprised of original experimental and new municipal data, support this proposition. 332B Robust Optimization in Operations Management Sponsored: Manufacturing & Service Oper Mgmt, Service Operations Sponsored Session Chair: Chaithanya Bandi, Northwestern University, Evanston, IL, 60208, United States, c-bandi@kellogg.northwestern.edu 1 - Sustainable Inventory with Robust Periodic-affine Policies Eojin Han, Northwestern University, Evanston, IL, United States, EojinHan2020@u.northwestern.edu, Chaithanya Bandi, Omid Nohadani We extend the work of Van Mieghem and Rudi (2002) to multi-period settings with uncertain and correlated demands. The approach leaps beyond the distributional assumption and models uncertainties via polyhedral sets. We formulate the inventory problem as a multi-stage robust optimization problem. We then develop periodic-affine policies, which require less information about past demands. We show theoretically and numerically that our framework guarantees worst-case performance, while reducing the computation. Our results are applied to the ordering policy of a pharmaceutical retailer in India. 2 - Robust Dual Sourcing Inventory Management: Optimality of Dual Index Policies Jan Van Mieghem, Professor, Northwestern University, Evanston, IL, 60208, United States, VanMieghem@kellogg.northwestern.edu, Jiankun Sun We provide a robust optimization model for inventory management with two supply sources with general leadtimes for which we show that a dual index, dual base-stock policy is optimal, even in a non-stationary setting. In an extensive stationary simulation study, this robust dual sourcing policy performs as well as, and can even outperform each of, the best heuristics presented in the stochastic inventory literature. 3 - Pricing the Service Level Guarantees in the Amazon AWS Spot Market Chaithanya Bandi, 1987, 2001 Sheridan Rd, 566, Evanston, IL, 60208, United States, c-bandi@kellogg.northwestern.edu, Siva Theja Maguluri In this paper, we combine tools from robust queueing theory and mechanism design to design polcies for pricing spot market instances. 4 - Design of a Robust Stroke Network: Personalized Patient Transportation Policies Amir Ardestani-Jaafari, McGill University, Montreal, QC, Canada, amir.ardestanijaafari@mail.mcgill.ca, Beste Kucukyazici In the diagnosis and treatment of acute stroke, the timely medical intention is increasingly critical. However, transporting the patients to the closest hospital may not be the best solution. This often causes congestion in some hospitals, while the stroke beds are underutilized in others. We study the patient allocation and transportation protocols to optimize the coordination between emergency medical services and designated stroke hospitals. Specifically, we study the trade- off between minimizing transportation time to the hospital and minimizing the congestion experienced by the patient at the hospital using robust optimization. MB12

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