Informs Annual Meeting 2017

SA04

INFORMS Houston – 2017

SA04

4 - Dynamic Pricing in High-dimensions Adel Javanmard, USC Marshall School of Business, 300A Bridge Hall, University of Southern California, Los Angeles, CA, 90089, United States, ajavanma@marshall.usc.edu, Hamid Nazerzadeh We study the pricing problem where a firm sells a large number of products, described via a wide range of features, to customers that arrive over time. The firm is oblivious to market values of products. However, it can gain information about valuations based on previous binary feedbacks on whether products were sold at the posted prices. This setting is motivated in part by the prevalence of online marketplaces that allow for real-time pricing. We propose a dynamic policy (RMLP) that leverages the sparsity structure of the demand space and provably achieves an asymptotically optimal revenue. Customer and Server Behavior in Queues Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Mirko Kremer, Frankfurt School of Finance and Management gGmbh, Frankfurt, 60314, Germany, m.kremer@fs.de 1 - Mismanaging the Quality-speed Tradeoff in Congested Environments Mirko Kremer, Frankfurt School of Finance and Management, Frankfurt, 60314, Germany, m.kremer@fs.de, Francis de Véricourt The tradeoff between diagnostic accuracy and speed permeates many manufac- turing and service settings. We present the results from a set of controlled labora- tory experiments designed to test the predictions of a formal sequential testing model that captures this tradeoff in a setting where the gathering of additional information (i.e., diagnostic testing) is likely to improve diagnostic judgments, but may also increase congestion in the system. We find that decision makers are insufficiently sensitive to congestion, with an aversion to stopping a diagnostic process in the face of increasing system congestion. On the other hand, decision makers are overly sensitive to diagnostic signals, with a tendency to stop a diag- nostic process immediately after the first test result, even at low congestion levels that render additional testing inexpensive. As a result of these behavioral pat- terns, besides substantial heterogeneity in how they trade off quality and speed, the majority of decision makers manage their system with both lower-than- optimal diagnostic accuracy and higher-than-optimal congestion cost. 2 - The Effects of Discrete Work Shifts on Non-terminating Queues Robert Batt, University of Wisconsin-Madison, Madison, WI, 53706, United States, bob.batt@wisc.edu, Diwas S.KC, Bradley R. Staats, Brian Patterson We study an emergency department to see how the finite-length shift structure impacts productivity and quality. Using simulation, we show that policies thatprohibit starting new patients near the end of the shift can lead to improved system throughput. 3 - An Empirical Study of Customer Spillover Learning about Service Quality Andres I. Musalem, Universidad de Chile, Beauchef 851, Santiago, 8370456, Chile, amusalem@duke.edu We study social learning in a multi-arm bandit setting where each of a sequence of arriving customers chooses between alternative service providers with uncertain quality, observing only the outcomes from other customers’ service experiences. In a series of experiments, we test the key theoretical prediction that the social learning process results in insufficient exploration, relative to a ,,centralized“ benchmark regime where customers learn about the providers’ quality from their own (previous) choices. SA03C Grand Ballroom C

320A Sustainable and Socially Responsible Operations Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Can Zhang, Georgia Institute of Technology, Atlanta, GA, 30309, United States, czhang2012@gatech.edu Co-Chair: Atalay Atasu, Georgia Institute of Technology, Atlanta, GA, 30308, United States, atalay.atasu@scheller.gatech.edu 1 - Agricultural Support Prices in Developing Economies: Operational Analysis and its use in Policy Making Tharanga Kumudini Rajapakshe, University of Florida, 10287, SW. 37th Place, Gainesville, FL, 32608, United States, tharanga@ufl.edu In this paper, we offer analytically-supported insights on several fundamental aspects of the Guarenteed Support Price scheme by analyzing a Stackelberg game between a homogenous population of small farmers and a social planner. To understand the welfare implications of the GSP scheme on its main stakeholders, we characterizethe equilibrium operational decisions of the farmers and the equilibrium value of the GSP. 2 - The Value of Strategic Farmers, Social Entrepreneurs and For-profit Firms in Crop Planting Decisions Wenbin Wang, Shanghai University of Finance and Economics, Shanghai, China, wang.wenbin@mail.shufe.edu.cn, Ming Hu, Yan Liu We study how farmers of heterogeneous production costs make crop-planting decisions over time to maximize their incomes. We consider both strategic farmers, who rationally anticipate the near-future prices and naive farmers, who shortsightedly react to recent crop prices. We find self-interested behavior of strategic farmers alone can reduce price volatility and benefit all farmers. In the absence of strategic farmers, an optimally-designed pre-season procurement contract, offered by a social entrepreneur or for-profit firm, also brings benefit to farmers as well as to the firm itself. However, a poorly designed contract may distort the market and drive non-contract farmers out of business. 3 - Inter-dependency among Mitigation, Preparedness, and Response Decisions in Disaster Management Cycle Shabnam Rezapour, Florida International University, Miami, FL, United States, srezapou@fiu.edu, Reza Zanjirani Farahani, Alfonso J. Pedraza Martinez This research explores the interdependency between the stages of mitigation (fortifying stocks), preparedness (locating stocks), and response (distributing stocks timely) in disaster management cycle. Using a stochastic model, the focus is on minimizing the total logistics costs. We show that controlled decentralization, centralization, and decentralization are the best locating strategy to minimize logistics costs for expensive goods, for cheap goods, and in relief networks with high transportation cost. Stock fortification (in mitigation stage) makes it possible to have short response intervals (in response stage) and fulfill demand with less number of stocks (in preparedness stage). 4 - Perishable Inventory Sharing in a Two-location System Can Zhang, Georgia Institute of Technology, 499 Northside Circle NW, Apt 315, Atlanta, GA, 30309, United States, czhang2012@gatech.edu, Turgay Ayer, Chelsea C. White Motivated by a platelet inventory management problem in a local hospital network, we study an inventory sharing problem for perishable products in a two-location system. We derive structural properties of the optimal policy and present managerial insights that are significantly different from those in existing studies for traditional non-perishable products.

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