Informs Annual Meeting 2017

TA19

INFORMS Houston – 2017

TA19

Despite efforts to improve scheduling and resource allocation via the adoption of disparate technologies in hospitals, there is still a lack of empirical evidence that indicates where, and if, the value proposition of such investments exists. We employ regression modeling to analyze a panel of 268 hospitals. Our findings suggest which scheduling applications impact which specific measures of hospital performance. This study offers several theoretical and managerial implications, which contribute to a better understanding of the potential benefits of the use of technology applications for personnel scheduling. 2 - Optimal Investment in Support of Current Drug and Development of New Drug Zhili Tian, Florida International University, Miam, FL, 33139, United States, ztian99@gmail.com The marketing spending on the drugs is often equal to or even higher than that for developing a new drug. Despite so much investment in the new drug development, only around twenty new drugs are approved every year for the entire pharmaceutical industry. To boost their revenues, firms often emphasize marketing of the current drugs at the expense of developing new drugs. However, the source for the two competing investments is from the revenues of the existing drugs. Hence we develop models to address the investment in the existing drugs and development of new drugs. Our methods optimally allocate the fund between marketing communication and new drug development for the following three scenarios. 3 - Outsourcing Strategy for Intermediate Production Steps Yang Wang, University of California-Berkeley, Berkeley, CA, United States, yangwang0803@gmail.com, Philip Kaminsky Biopharmaceutical firms often outsource their final filling, labeling and packing operations to a third party outsourcer, leaving these firms susceptible to long and variable lead time due to queuing at the outsourcer. To address this issue, a so- called capacity reservation policy is proposed, in which means the firm reserves some fixed capacity at the outsourcer at given intervals to guarantee short and less variable lead time. We show the benefit of such a policy compared to the traditional polices when the lead time is intrinsically random, and conclude that the policy not only reduces the inventory and ordering cost at the firm, but also increases the profit of the outsourcer. 342C Joint Session PSOR/Natural Hazards: Humanitarian Assistance and Disaster Relief Invited: InvitedNatural Hazard Planning Invited Session Chair: Erica L. Gralla, Washington, DC, 20052, United States, egralla@gwu.edu Co-Chair: Keziban Rukiye Tasci, Northeastern University, MA, 02115, United States, tasci.k@husky.neu.edu Co-Chair: Ozlem Ergun, Northeastern University, Boston, MA, 02115, United States, o.ergun@neu.edu 1 - Modeling the Values of Private Sector Agents in Humanitarian Supply Chains Jarrod D. Goentzel, Massachusetts Institute of Technology, 77 Massachusetts Avenue, E38-650, Cambridge, MA, 02139, United States, goentzel@mit.edu, Corinne Carland, Gilberto Montibeller Humanitarian organizations (HOs) increasingly engage the private sector to achieve their goals but must understand the different objectives and priorities of such agents to be effective. To develop such knowledge, we formalize an approach based on multi-attribute value analysis and apply it with agents across a multi- echelon health supply chain in Uganda, with a focus on malaria rapid diagnostic tests. Our findings show that objectives are not aligned in this supply chain, but also reveal how our approach can improve private sector engagement, which may be crucial for humanitarian outcomes. 2 - The Post-disaster Debris Clearance Problem with Resource Allocation and Learning In the aftermath of a disaster, debris blocks roads and hampers critical response operations such as search-and-rescue and relief transportation, so that it needs to be cleared quickly and efficiently. However, debris management is expensive and complicated. This work, motivated by the debris clearance operations in a post- disaster situation, addresses a problem of establishing connectivity between the nodes on a disrupted network with inherent uncertainty and learning. We explore structural results on various special networks, which provide insight for the problem on more general networks. TA21 Seyma Guven-Kocak, Georgia Institute of Technology, 1235 Parkway Circle N, Atlanta, GA, 30340, United States, seymaguven@gatech.edu, Pinar Keskinocak

342A General OM-Finance Interface Sponsored: Manufacturing & Service Oper Mgmt, iFORM Sponsored Session Chair: Yuqian Xu, New York University, 44 West 4th Street, New York, NY, 10012, United States, yxu@stern.nyu.edu Co-Chair: Mike Pinedo, New York University, 44 West 4th Street, New York, NY, 10012, United States, mpinedo@stern.nyu.edu

1 - Cash Conversion Systems in Corporate Subsidiaries Weiwei Chen, Rutgers Business School - Newark and New Brunswick, Piscataway, NJ, United States, wchen@business.rutgers.edu, Benjamin Melamed, Ben Sopranzetti, Oleg Sokolinskiy

This paper models a cash conversion system in a subsidiary of a parent company, where there is an active internal capital market, but otherwise the subsidiary has no access to additional external funds. The cash conversion system implements a perpetual flow cycle, where funds convert to product and back to funds. We model this system as a discrete-state continuous-time Markov process, and compute statistics of the equilibrium cash conversion cycle. We further optimize the financial and operational designs of the system, so as to maximize its financial rate metrics. Finally, we study numerically the impact of friction in such parent- subsidiary relationship. 2 - Dynamic Financial Hedging and Inventory Management for a Storable Commodity Zhan Pang, City University of Hong Kong, Hong Kong, zhan.pang@cityu.edu.hk Managing demand and price risks for commodity inventory remains a major challenge for firms facing volatile raw material prices. Consider a firm purchasing a raw material from a spot market with the access to a financial derivative market where derivative contracts can be used to hedge the price risk. We formulate this problem as a dynamic program in the Markowitz mean-variance framework. Recognizing the time-inconsistency of the mean-variance objective, we analyze a class of time-consistent policies and identify the market conditions under which an optimal time-consistent policy can be optimal. The roles and relationship of inventory and derivatives in hedging are discussed. 3 - On a Firm’s Optimal Response to Pressure for Gender Pay Equity David Anderson, Baruch College, City University of New York, 55 Lexington Ave, Office 9-251, New York, NY, 10010, United States, DavidRybergAnderson@gmail.com, Margret V. Bjarnadottir, Cristian Dezsö, David Gaddis Ross We present a theory of how a firm would rationally respond to pressure for gender pay equity. We show that (a) employees in low-paying jobs and whose job-related traits typify men at the firm are most likely to get raises; (b) counterintuitively, some men may get raises and giving raises to certain women would increase the pay gap; (c) a firm can reduce the gender pay gap as measured by a much larger percentage than the overall increase in pay to women at the firm; and (d) “ghettoizing” women in select jobs can help a firm reduce its pay gap. 4 - Operational Risk Management of Commercial Institutions Yuanqiao Chen, Nanjing University, Nanjing City, China, ccyykalcc@163.com, Michael L.Pinedo Operational risk is the risk of losses caused by failed internal processes, people, systems or external events. We propose a process-based model to help organizations predict potential operational losses and determine capital reserves. The model enables us to use available data to predict via a probabilistic network based on process. 342B Product and Manufacturing Process Development and Innovation in Healthcare Sponsored: Technology, Innovation Management & Entrepreneurship Sponsored Session Chair: Zhili Tian, Florida International University, Weston, FL, 33327- 2444, United States, ztian99@gmail.com 1 - An Empirical Analysis of the Effects of Personnel Scheduling on Hospital Performance Bogdan C. Bichescu, The University of Tennessee, 229 Stokely Management Center, 916 Volunteer Blvd, Knoxville, TN, 37996- 0525, United States, bbichescu@utk.edu, Randy V. Bradley, John E. Bell, Joonwhan In, Wei Wu TA20

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