Informs Annual Meeting 2017

MC15

INFORMS Houston – 2017

MC16

4 - An Instrumental Variable Tree Approach for Detecting Heterogeneous Treatment Effects in Observational Studies Guihua Wang, Ross School of Business, University of Michigan, 1209 McIntyre Drive, Ann Arbor, MI, 48105, United States, guihuaw@umich.edu, Jun Li, Wallace J. 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. 332E Sustainable Supply Chains Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain Sponsored Session Chair: Suresh Muthulingam, Pennsylvania State University, University Park, PA, 16803, United States, suresh@psu.edu 1 - Diversity vs. Efficiency: A Policy to Service and Survive Mahyar Eftekhar, Arizona State University, BA 433, Main Campus, P.O. Box 874706, Tempe, AZ, 85287, United States, eftekhar@asu.edu, Iman Parsa, Charles J.Corbett Nonprofit firms are resource-dependent entities whose existence relies on donations they collect. This research empirically examines which factors impact nonprofits’ income, and discusses whether nonprofits can develop a sustainable policy to fulfill their mandates efficiently while maximizing their income. Our data contains information of 120 organizations over 15 years. 2 - Recycling as a Strategic Supply Source Gilvan Souza, Indiana University, Kelley School of Business, 1309 E.10th St, Bloomington, IN, 47405, United States, gsouza@indiana.edu, Gal Raz We investigate how recycling can be used as a strategic source of supply in the presence of competition and a powerful material supplier. We examine the economic and environmental impact of a manufacturer’s decision to recycle its products and the implications for its customers, supplier, and society. We show that the result depends on the type of recycling the manufacturer does as well as on the market dynamics and price of recycling. 3 - The Impact of Spill and Pollution Controversies on Firm Environmental Activity Rick Hardcopf, University of Minnesota, 321-19th Avenue S, The adoption of environmental management practices (EMPs) intended to reduce a firm’s environmental footprint has increased steadily over the years. EMPs are also positively related to superior environmental, financial, and operational performance. Yet, no empirical research has evaluated how a negative environmental event, such as an environmental spill or pollution controversy, impacts a firm’s on-going pattern of EMP adoption. Does the controversy accelerate, decelerate or have no impact on adoption? We evaluate this relationship using a novel secondary dataset derived from 10k filings, sustainability reports, and other public sources. 4 - Predicting Outcomes of Carbon Abatement Opportunities using Textual Analysis Christian Blanco, Ohio State University, Columbus, OH, United States, blanco.58@osu.edu Managers need to predict the outcome of carbon abatement opportunities before they can decide to implement them. Are there features of a project that can predict the monetary savings and carbon emissions reduction outcome of these opportunities? We explore this question using textual analysis on 45,554 carbon abatement opportunities reported to CDP (formerly the Carbon Disclosure Project) from 2011-2016. MC15 Suite 3-150, Minneapolis, MN, 55455, United States, hardc001@umn.edu, Rachna Shah, Suvrat Dhanorkar

332F Inventory Management Contributed Session Chair: Yossiri Adulyasak, HEC Montreal, Montreal, QC, Canada, yossiri.adulyasak@hec.ca 1 - A Statistical Analysis Study to Optimize Working Capital from Product Inventories in a Steel Manufacturing Company Mohammed Almethen, Alfaisal University, Riyadh, Saudi Arabia, methenma@gmail.com The success of a product in today’s global marketplace depends on capabilities of firms in the product’s supply chain. Among these capabilities, effective working capital management is a capability necessary to lead in the global marketplace. The purpose of this research is to investigate the working capital reduction opportunities by analyzing the safety stock of product inventories in the Arabian Gulf Steel Industry. A history of high profit margins had created a culture where relatively little attention was paid to cash, benchmark shows that SMC (Steel Manufacturing Company) to be less efficient than its peers with a huge working capital value of around $1 billion against sales of $0.365 billion. That is nearly twice as much working capital investment for every $1 billion as the top Steel Industry performers. Experiential learning was applied in an MBA course to find opportunities in the Gulf environment for innovative working capital management approaches with particular focus on inventory management. A Bottom-up approach is taken to Identify opportunities of reducing inventories per SKU (Stock Keeping Unit) i.e. +1000 SKU by calculating the SS (safety stock) and CS (cycle stock) by using a mathematical model. Data to be analyzed includes historical sales/inventory/supply/consumption to calculate variabilities. The findings were inventory reduction opportunity by $22.1MM from FP, $107MM from LP and $103MM from row materials. A total of $232.1MM. The DIOH (Days Inventory on Hand) will be reduced by 25 Days. Working capital optimization techniques from product inventories vary between industries. This research can significantly ease the optimization using scientific methods with agreed bases. This analysis can reduce working capital in this SMC if top management endorsed these opportunities and execute it. 2 - Joint Pricing and Inventory Optimization under Min-max Regret Chengzhang Li, Purdue University, 403 W. State Street, west lafayette, IN, 47906, United States, li1392@purdue.edu, Mengshi Lu We study a robust pricing newsvendor problem under the min-max regret framework where the firm only knows the interval in which the random factor lies with high confidence in the demand model. We characterize the optimal decisions with a general demand model and further study the impact of inventory risk by comparing the optimal price and the risk-free price. We also study comparative statics of the optimal price with different unit cost and degree of demand ambiguity. Finally, our approach outperforms the traditional one in a data-driven setting with small sample sizes, high demand variability, or demand model misspecification. 3 - Ordering Policy with Demand Learning for a New Product Yanzhi Li, City University of Hong Kong, Department of Management Sciences, Tat Chee Avenue Kowloon, Hong Kong, Hong Kong, yanzhili@gmail.com Consider a retailer that needs to prepare inventory for a new product. Due to the inherent demand uncertainty, the firm needs to learn the demand over time in the meanwhile of achieving an economy of scale in ordering. This paper attempts to address the trade-off faced by the retailer between business efficiency and prediction accuracy. 4 - Inventory Policies in Dual Sourcing Systems with Uncertain Yield Andrei Sleptchenko, Assistant Professor, Qatar University, Dep. of Mechanical & Industrial Engineering, P.O. Box 2713, Doha, Qatar, andrei.sleptchenko@qu.edu.qa, Adriana Gabor We study an inventory system with uncertain demand and two supply sources, one using Traditional Manufacturing processes (TM) and the other Additive Manufacturing (AM), aka 3D printing. Traditional manufacturing has lower costs, guaranteed quality, but longer lead time. Additive manufacturing has shorter lead time, but higher costs and uncertain yield due to unstable production quality. For this problem, we propose close to optimal inventory policies and study the conditions at which Additive Manufacturing can help to reduce the total costs.

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