Informs Annual Meeting 2017

SB03B

INFORMS Houston – 2017

SB03C Grand Ballroom C

3 - Matching or Not Matching: Strategic Pricing in a Competitive Airline Environment Alexandre Jacquillat, Carnegie Mellon University, Pittsburgh, PA, United States, ajacquil@andrew.cmu.edu, Michael Benborhoum, Maxime Cohen A common practice in the airline industry involves matching competitors’ lead-in fares, which may lead to missed revenue opportunities. This talk presents a complete approach to assess how airlines can strategically react to competitors’ pricing decisions. We study a game-theoretic model of capacitated Bertrand competition that identifies conditions under which deliberately deviating from competitors’ prices can increase revenues. 4 - On Incomplete Learning and Certainty-equivalence Control N. Bora Keskin, Duke University, Fuqua School of Business, 100 Fuqua Drive, Durham, NC, 27708-0120, United States, bora.keskin@duke.edu, Assaf Zeevi Motivated by dynamic pricing applications, we consider a dynamic control-and- estimation problem. The decision-maker sequentially chooses controls and observes responses that depend on both the chosen controls and an unknown parameter. The decision-maker uses a certainty-equivalence policy, and we characterize the asymptotic accuracy performance of this policy. SB03B Grand Ballroom B Multi-Item and Multi-Location Revenue Management Models Sponsored: Revenue Management & Pricing Sponsored Session Chair: Candace Arai Yano, University of California-Berkeley, Berkeley, CA, 94720-1777, United States, yano@ieor.berkeley.edu 1 - Dynamic Pricing of Omnichannel Inventories Joline Uichanco, University of Michigan, Ross School of Business, 701 Tappan St, Room 4418, Ann Arbor, MI, 48109-1234, United States, jolineu@umich.edu, Pavithra Harsha, Shivaram Subramanian We develop a dynamic pricing model for omnichannel retail which accounts for cross-channel interactions in demand (channel substitution) and supply (cross- channel fulfillment). The model combines ideas from dynamic pricing and capacity control to address the novel features of an omnichannel setting. We propose two computationally tractable pricing policies based on partitioning the channel agnostic inventories. A markdown optimization system based on our models was developed and implemented at a major US retailer. Causal model analysis of the pilot data show 12% improvement due to the new system. 2 - Product Quality, Service and Pricing Ruxian Wang, The Johns Hopkins Carey Business School, Baltimore, MD, Shiliang Cu We develop a unified framework to investigate firms’ joint decisions on product quality, price and ancillary service, when they offer a line of products to con- Karthik Natarajan, Singapore University of Technology and Design, Singapore University of Technology and Design, 20 Dover Drive, Singapore, 138682, Singapore, karthik_natarajan@yahoo.com, Chung-Piaw Teo, Zhenzhen Zen, Cong Chen We develop an estimation and optimization framework for the multi-product pricing problem by exploiting properties in a new class of choice models. The pricing problem under this new choice model is a convex optimization problem when the marginal distributions of the utilities are log-concave. We develop a data-driven second order conic/linear program to estimate a robust choice model, and to find the corresponding optimal prices. Mixed Integer Linear Programming models can be used to find the prices when side constraints are present. sumers in a variety of monopolistic and competitive environments. 3 - Marginal Estimation+Price Optimization” with Robust Choice Models

M&SOM Student Paper Competition I Sponsored: Manufacturing & Service Oper Mgmt Sponsored Session Chair: Tunay Tunca, Unversity of Maryland, Silver Spring, MD, 20910, United States, ttunca@rhsmith.umd.edu 1 - Truthful Mechanisms for Medical Surplus Product Allocation Can Zhang, Georgia Institue of Technology, Atlanta, GA, czhang2012@gatech.edu 2 - An IV Tree Approach for Personalized Health Care Outcome Analysis Guihua Wang, University of Michigan, Ann Arbor, MI, guihuaw@umich.edu 3 - Risky Suppliers or Risky Supply Chains? An Empirical Analysis of Sub-tier Supply Network Structureon Firm Risk in the High-Tech Sector Yixin Wang, University of Michigan, Ann Arbor, MI, iriswang@umich.edu 320A Operational Innovations with Social and Environmental Benefits Sponsored: Manufacturing & Service Oper Mgmt, Sustainable Operations Sponsored Session Chair: Erica Plambeck, Stanford University, Stanford, CA, 94305-5015, United States, elp@stanford.edu Co-Chair: Dan Andrei Iancu, Stanford University, Stanford, CA, 94107, United States, daniancu@stanford.edu 1 - Consumer Education and Reverse Logistics in a Social Enterprise SB04 We study the problem faced by a social enterprise that distributes new life- improving technologies in a developing market. Its goal is to profitably increase the adoption of a product that is sold through a small retailer. The retailer sells to budget-constrained consumers that have an uncertain product valuation. The distributor considers two strategies: (i) improve the information accuracy provided to consumers, and (ii) improve its reverse logistics. We show that if the distributor highly values product adoptions, it prefers reverse logistics rather than improving information accuracy. 2 - Pay it Forward: A Sustainability Incentive in Smallholder Commodity Supply Chains Joann De Zegher, Stanford University, dezegher@stanford.edu, Dan Andrei Iancu, Erica Plambeck Batched payments in commodity supply chains burdens the cash flow management of small suppliers in developing economies. We formulate a dynamic model of consumption-maximizing, cash-constrained farmers to analyze the supply chain consequences of batched payments. Building on this, we propose a novel incentive and sourcing policy for buyers to achieve their no-deforestation commitments in commodity supply chains of developing economies. Our proposed incentive increases farmer welfare and buyer profits. A one-size-fits-all policy achieves no-deforestation most often, but a tailored policy minimizes deforestation. The palm oil supply chain starting in Indonesia motivates our study. 3 - Off Grid Electricity at the Bottom of the Pyramid Bhavani Shanker Uppari, INSEAD, Rowan Clarke, Serguei Netessine, Martine Visser, Ioana Popescu We report results of a large-scale randomized controlled trial in Rwanda whose goal was to understand off-grid electricity adoption at the bottom of the pyramid. We focus on different business models designed to stimulate transition from kerosene to electric lamps. These experiments demonstrate behavioral barriers to adoption of electricity and ways to overcome them. 1 Ayer Rajah Avenue, Singapore, 138676, Singapore, BhavaniShanker.Uppari@insead.edu, Manuel Barron, Andre Du Pin Calmon, INSEAD, Boulevard de Constance, Fontainebleau, 77300, France, andre.calmon@insead.edu, Gonzalo Romero

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