Informs Annual Meeting 2017

MD33

INFORMS Houston – 2017

2 - Enterprise Information Systems and Value Creation in Mergers and Acquisitions Chengxin Cao, PhD, Iowa State University, caoxx161@umn.edu This paper examines the impact of enterprise systems (ES) on the premium and the capital market reaction of mergers and acquisitions (M&A). Our results that the extensiveness and standardization of ES are significantly associated with both market value enhancement of the acquirer and target highlights the important role information systems play in the creation as well as the deployment of firm resources and capabilities that deliver competitive advantages to firms. Also, the ES capability enables the acquirers to accurately assess the unique synergy that can be realized in the acquisition, thus preventing the acquirer from overpaying for the acquisition. 3 - Tempting Fate: Social Media Posts by Firms, Customer Purchases, and the Loss ofFollowers Shuting (Ada) Wang, Temple University, Philadelphia, PA, United States, tuf49919@temple.edu, Brad Greenwood, Paul A. Pavlou In this study, we examine how a firm’s social media posts influence the propensity of its followers to purchase products and unfollow the firm, both in the short and the long term. Using a unique dataset from a fashion retailer, we find that while social media posts do increase the retailer’s sales by 5% in the short-term, they also amplify the followers’ propensity to unfollow the firm by 300%. Strikingly, results also indicate that posts cannibalize long-term cumulative sales. The negative effects of posts on unfollowing and sales are exacerbated in more crowded cities and during peak traffic hours. The study contributes to the emerging IS literature on social media and informs managerial practice on how to leverage social media posts for enhancing sales and preventing the loss of followers. 4 - Empirical Analysis on Online Job Reviews, Social Media Usage and Firm Performance Fujie Jin, Kelley School of Business, Indiana University, 1309 E.Tenth Street, H H.4100, Bloomington, IN, 47401, United States, jinf@indiana.edu In this study, we look at how employee-contributed job reviews and firm- managed social media posts jointly build up “employer brand” as an intangible asset and influence market valuation. Using a unique dataset combining job reviews, social media posts and firm performance data, we find that positive job reviews increase firm market value, particularly in labor-intensive industries, and for positions with higher employee mobility. In addition, firms can complement this effect by including more employee-related content on their social media pages. This is likely because different sources of information could jointly influence employees’ job movement decisions, and firms with stronger employer brands are likely to retain key employees for longer periods of time and save costs in recruiting. Overall, our results indicate that firms should have coordinated strategies across platforms, presenting a consistent employer brand, to maximize their market valuation.

3 - Information Sharing in Supply Chain of Durable Goods Neda Khanjari, Rutgers University, 227 Penn St, BSB 260, Camden, NJ, 08102, United States, neda.khanjari@rutgers.edu, Hyoduk Shin, Seyed Iravani We study a supply chain of a durable good product in which the retailer has advance demand information. We study how the policy of the retailer to share his information with the manufacturer depends on durability of the product. We show the retailer should share his information with the manufacturer when (i) the production cost is large and product is not very durable, or (ii) when the production cost is small and the product is very durable, or (iii) the production cost is intermediate and the durability of the product is intermediate. 4 - The Role of Market Evolution in Channel Contracting Long Gao, University of California-Riverside, 900 University Avenue, 221 Anderson Hall, AGSM, Riverside, CA, 92521, United States, long.gao@ucr.edu We study the contracting problem in a bilateral channel where the retailer has private information about evolving market conditions. We show market inertia offers a new coordination mechanism that dictates how the channel should adapt. Further, market inertia highlights the reach and limitation of existing models. We reveal that the dynamics by themselves do not preclude simple contracts; it is the nature of the dynamics—-market inertia—-that determines the contract complexity. Hence, simple contracts can arise as firms’ best response to evolving market conditions. This work advances our understanding on when and how to use dynamic private information in channel contracting. 5 - Comparing Uniform and Differential Pricing Strategies in Multichannel Retailing Jinpeng Xu, Xidian University, Xi’an, 710126, China, jinpxu@foxmail.com, Yufei Huang We consider a retailer sells a product in both online and offline channels and his rival only operates in only online channel, and investigate his pricing strategy. We suppose consumers can be divided into three types by their channel performance, i.e., offline consumers, online consumers and channel-agnostic consumers. We derive the equilibrium prices for the two retailers when the retailer adopts uniform and differential pricing strategy across channels respectively. We compare the profits and find that differential pricing strategy does not always outperform uniform pricing strategy for the retailer. We also evaluate the consumer surplus and social welfare to derive managerial insights. 351C Applied Analytics in Aviation Sponsored: Aviation Applications Sponsored Session Chair: Ehsan Nobakht, Boeing Vancouver, Advanced Analytics Group, 1146 Homer Street, Vancouver, BC, V6B 2X6, Canada, ehsan.nobakht@boeing.com 1 - Performance Based Contingency Fuel Planning Luis Mesen, United Airlines, Chicago, IL, United States, luis.mesen@gmail.com With the FAA’s revision to OpSpec B343, performance-based contingency fuel planning is now available to US operators. This revision is meant to harmonize with ICAO Annex 6, Part 1 and take advantage of air carriers’ considerable investment in fuel-planning technology. Unplanned contingency fuel can now be calculated using statistical estimation rather than using a prescriptive amount. This presentation will walk through some of the statistical, modeling, automation and validation techniques UAL used to become the first U.S. airline to fly under PBCF flight rules. 2 - Hackathons as a Vehicle for High Velocity Collaboration Between Engineers and Data Scientists Ehsan Nobakht, Boeing Vancouver, Advanced Analytics Group, Because of the vast amount of information captured by the CMC, specialized data science tools and techniques are required to work efficiently with the data. Additionally, the complex nature of modern aircraft like the C-17 requires specialized systems knowledge in order to interpret and find meaningful insights in the data. As these two skillsets are rarely possessed by the same person, it becomes imperative to create a forum that allows data scientists and systems engineers to work together when tackling big data problems.This presentation will focus on best practices for hosting concentrated working sessions, referred to as hackathons, as a means of bringing data scientists and systems engineers together. MD33 1146 Homer Street, Vancouver, BC, V6B 2X6, Canada, ehsan.nobakht@boeing.com, Dawen Nozdryn-Plotnicki

MD32

351B Operations/Economics Interface Contributed Session Chair: Jinpeng Xu, Xidian University, Xi’an, China, jinpxu@foxmail.com

1 - Optimal Ordering Policy for Defective Items under Temporary Price Discount with Inspection Errors and Investment to Increase the Screening Rate Guiyang Zhu, Xi’an Jiaotong University, 28 Xianning West Road, Xi’an, China, zhuguiyang@stu.xjtu.edu.cn, Tao Jia When a supplier offers temporary price discount for defective items, the demand would be stimulated, implying that the items screened as good may not satisfy the increased demand. Besides, the retailer’s inspection errors are often considered in the quality checking process. A straightforward solution is to increase the screening rate through investments. Thus, this paper studies an inventory model for defective items under temporary price discount with inspection errors. The three profit functions are derived to find optimal solutions. Via sensitivity analyses, a high defective probability would spur the system to invest more intensively into improving the quality checking process. 2 - Coordination of the Supply Chain with Quality Improvement and Customer Returns

Xinghao Yan, Assistant Professor, University of Toledo, 105 Howald Farm Ct., Toledo, OH, 43551, United States, yanxinghao@gmail.com

This paper studies the supply chain with both quality improvement and customer returns. We analyze the retailer’s incentives for refund price and the supplier’s incentive for quality improvement. We also design coordinating contracts for the supply chain, which is influenced by several factors, profit negotiation, first- mover right, and information asymmetry.

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