Informs Annual Meeting 2017

MD45

INFORMS Houston – 2017

MD46

4 - The Effect of Aggregated Purchasing on Promotion of Quantity Discount in Social Network Yifei Luo, PhD candidate, University of Science and Technology of China, School of Management, USTC, 96 Jinchai Road, Hefei,Anhui, 230026, China, ustclyf@foxmail.com, Yugang Yu, Jie Liu Quantity discount, a traditional marketing tool as promotion, is commonly used by single consumers to buy more goods with cheaper price. But now in web- based network era, quantity discount is frequently used by a group consumers to aggregate purchase to share the benefit of quantity discount. Communication and purchase behavior in social network is a key factor determining the optimal profit . We consider how the firm set a discount to make it the optimal profit. We solve the optimal profit function in two categories of consumers. We show that the promotion with aggregated purchasing not necessarily inferior to traditional quantity discount even if the level of communication is sufficiently high. 360D Revenue Management, Pricing Contributed Session Chair: Hasmukh Gajjar, Indian Institute of Management-Indore, Indore, India, hasmukh135@gmail.com 1 - Analyzing the Effect of Demand Cannibalization in Multi-channel Retailing Yasamin Salmani, PhD Candidate, Drexel University, 3220 Market St., Philadelphia, PA, 19104, United States, ss3858@drexel.edu Having multiple channels to sell the products has been regarded as a principal method to attract more customers. From the other side, a major concern in any multi-channel retailing is that adding a marketing channel may grab demand of other established channels to some extent. This paper investigates some fundamental reasons of this phenomenon, the so-called cannibalization, as well as propose some solutions to alleviate its effects on demand. 2 - Context-effect Models for Online Recommendations Uzma Mushtaque, Rensselaer Polytechnic Institute, 110 8th Street, Troy, NY, 12180, United States, uzmamu@rpi.edu Post filtering models are developed for online personalized assortments under a random utility framework. Four variants of MNLCE explicitly incorporate the impact of information overload by redefining item level representative utility. The models are novel as they capture the context of information overload and the notion of novelty and diversity in addition to the common goal of recommending high preference items. 3 - Should Retailers Open Outlet Malls? Xiuli He, Associate Professor, UNC-Charlotte, 9201 University City Blvd, Charlotte, NC, 28223, United States, xhe8@uncc.edu, Guiping Li We consider the manufacturer’s quality decisions for outlet stores and regular malls. 4 - Pricing Decisions with Low-carbon Responsibility and Remanufacturing Competition in Closed-loop Supply Chain Juhong Gao, Dr., Tianjin University, College of Management and Economics, 92 Weijin Road, Nankai, Tianjin, 300072, China, gaojuhong@tju.edu.cn, Zhen Huo, Mengmeng Li Under the consideration of uncertain demand and remanufacturing, introduce the low-carbon responsibility, establish the pricing models of CLSC with remanufacturing competition with the goal about the system expected profit maximization, it is concluded that the pricing strategy of CLSC. Then, considering the low-carbon responsibility factor, the numerical examples further respectively analyze the influence of the uncertain demand and remanufacturing competition to pricing strategies and expected profits of CLSC. It is concluded that the pricing strategies of CLSC are under the condition of different market demand and remanufacturing competition. 5 - Managing Product Returns in Online Retailing Hasmukh Gajjar, Associate Professor, Indian Institute of Management Indore, Rau-Pithampur Road, C-208, Prabandh Shikhar, Indore, 453331, India, hasmukh135@gmail.com, Bhavin J. Shah We study the forward and reverse supply chain for product returns in online retailing. The first part of the study investigates the prominent reasons of it and seeks to identify the improvement areas to minimize the returns. Second part discusses ways to handle the return process more efficiently and effectively. MD45

360E Scheduling and Project Management Invited: Project Management and Scheduling Invited Session Chair: Zhixin Liu, University of Michigan-Dearborn, Dearborn, MI, 48126-4100, United States, zhixin@umich.edu 1 - Production and Pricing Decisions in a Dual-channel Supply Chain under Remanufacturing Subsidy and Carbon Tax Policies Ping He, Associate Professor, South China University of Technology, A309, Shantou Alumni Building, 381 Wushan Road, Guangzhou, 510641, China, phe17@scut.edu.cn, Kaiying Cao, Zhixin Liu In recent years, governments pursue multiple policies to promote remanufacturing practice. We investigate the optimal production and pricing strategies of a manufacturer and a retailer in a dual-channel supply chain under two policies, i.e. remanufacturing subsidy policy (RSP) and carbon tax policy (CTP). We also explore which policy is better for the society by comparing the social welfares achieved under the two policies. The impacts of two policies on the production quantities of new and remanufactured products are presented. It is found that when the environmental cost coefficient is relatively low, RSP leads to greater social welfare; otherwise, CTP does. 2 - Scheduling of Continuous Slab Casters Hairong Zhao, Purdue University Northwest, 2200 169 Street, Hammond, IN, 46323, United States, hairong@pnw.edu The steel industry faces increasing competitive challenges. It is imperative for the steel manufactures to drastically cut costs while improving product quality and customer satisfaction in order to maintain their market positions. One of the tools in the drive to cut costs, increase quality and improve customer satisfaction has been improved planning and scheduling systems. This talk will describe a decision support system for the problem that is faced by a steel company. The system integrates the customer orders selection, and the planning and scheduling of continuous casters, thus makes synchronized production. 3 - Risk-adjusted NPV for Project Evaluation and Selection Zhixin Liu, University of Michigan-Dearborn, 19000 Hubbard We consider a company that schedules the tasks of its projects to maximize project net present value (NPV) under risk, and also selects from among its available projects using this measure. We model decreasing project risk by removing from the discount rate the risk factor associated with each task when it is completed. We formulate and solve the resulting problem of maximizing the risk-adjusted NPV of a project. We validate our contribution using two computational studies: the first demonstrates a significant increase in maximum project NPV from improved project scheduling; and the second demonstrates a significant increase in total project portfolio value from improved project selection. 360F Theoretical Studies in Economics of Information Systems Sponsored: EBusiness Sponsored Session Chair: Lin Hao, University of Notre Dame, Notre Dame, IN, 46556, United States, lhao@nd.edu 1 - Reward Scheme Design Decision under the Multinomial Logit Model in Online Reward-based Crowdfunding Market Tongxin Zhou, University of Washington, 3927 Adams Lane NE, Seattle, WA, 98105, United States, txzhou5@uw.edu, Shengsheng Xiao We study the reward scheme design decision for projects in reward-based crowdfunding market. Backers’ reward item selection behavior follows the Multinomial Logit choice model with general utility function. Our basic reward design model shows that creators’ modified profit margins from each reward item are the same at the optimal backing prices. We also extend the basic model by considering crowdfunding participants’ behavior such as backers’ altruism, heterogeneous beliefs on project’s success probability and creators’ reward updating, and derive similar quantitative properties to guide the optimal design decision. Finally, we provide sensitivity analysis of the model parameters. Drive, Dearborn, MI, 48126-4100, United States, zhixin@umich.edu, Nicholas G.Hall, Wenhui Zhao MD47

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