Informs Annual Meeting 2017

TE48

INFORMS Houston – 2017

TE48

6 - Assignment Model Solution for Common Challenges in Complex Service Systems Miguel A.Ruiz, Student, University of Puerto Rico at Mayaguez, Mayaguez, PR, United States, miguel.ruiz6@upr.edu, Betzabe Rodriguez Our research tailors the assignment model to account for common challenges faced by service organizations such as detrimental benefit of fulfilling tasks with unfit resources, myriad of tasks and diverse personnel profile. The proposed model uses as a test bed the Puerto Rico Agricultural Extension Service. 360F Recent Advances in Energy Storage and Others Invited: Energy Systems Management Invited Session Chair: Xiaojie Wang, University of Florida, UFL, Gainesville, FL, 4, United States, xwang828@ufl.edu 1 - Optimal Battery Charging in Smart Grids with Price Forecasts Sandjai Bhulai, Vrije Universiteit Amsterdam, Department of Mathematics, De Boelelaan 1081a, Amsterdam, 1081 HV, Netherlands, s.bhulai@vu.nl, Sven van der Kooij, Pia Kempker, Hans van den Berg We consider a residential cluster in which some of the households own home batteries. The battery owners have forecasts of future prices for optimally utilizing the long-term flexibility of the battery. These forecasts become increasingly uncertain the further we look into the future. The home batteries are individually too small to influence prices; collectively however, they have enough capacity to have an influence. We formulate an algorithm based on stochastic dynamic programming to optimize individual/collective/cluster profits. Through simulation, we find that this solution performs well when incentives are put in place to promote the right use of storage in the future grid. 2 - Valuation of Oil Tank in Combustion Turbine under Uncertain Gas Network Shu Tu, Lehigh University, 200 West Packer Avenue, Bethlehem, PA, 18015, United States, sht213@lehigh.edu The interdependency of gas and electricity is very high as 83% of electricity produced in 2005 is from gas and that percentage will still be over 70% in 2020. This fact brings a potential threat to the safety of the electricity network. In order to satisfy the electricity network security constraints, fuel flexibility is a good choice. In this paper, we consider the valuation of a combustion turbine which can use both natural gas and oil to produce power under a vulnerable gas network assumption. We solve this problem by developing a finite horizon Markov Decision Process model to determine the optimal policy of generating power with two kinds of fuels and provide reasonable results to support adding oil tank. 3 - Robust Optimal Control of Wind Farm with PHEVS Participating in Energy Market Xiaojie Wang, University of Florida, Gainesville, FL, 32603, Gainesville, FL, 32603, United States, United States, xwang828@ufl.edu We consider a wind farm with plug-in hybrid electric vehicles as storage devices participating an energy market by submitting their commitments. This new model gives a robust solution considering price and renewable generation uncertainties. Our numerical results show the advantages of our proposed model. 4 - Strong Formulation for Unit Commitment Considering Storage Yanan Yu, University of Florida, 321 University Village, Apt 3, Gainesville, FL, 32603, United States, yuyn@ufl.edu, Kai Pan, Yongpei Guan In this talk, we present a polyhedral structure of integrated minimum-up/-down time and ramping polytope, considering the storage characteristics in the traditional Unit Commitment problems. By exploring its specialized structures, we derive strong valid inequalities and convex hull description. The computational studies show the effectiveness of the proposed strong valid inequalities. TE47

361A Behavioral Issues in Supply Chains Sponsored: Behavioral Operations Management Sponsored Session Chair: Mirko Kremer, Frankfurt School of Finance and Management gGmbh, Frankfurt, 60314, Germany, m.kremer@fs.de 1 - Increasing Retailer Preferences for New Products with Buyback Contracts Anna Devlin, Assistant Professor, University of Alabama, Huntsville, 301 Sparkman Drive NW, Huntsville, AL, 35801, United States, anna.g.devlin@gmail.com, Wedad Jasmine Elmaghraby, Rebecca Hamilton We study the ability of buyback contacts to increase retailer preferences for new products in a series of laboratory studies. New products are shrouded with demand uncertainty, decreasing the likelihood they gain market entry. We find that buyback contracts decrease an individual’s level of ambiguity aversion and increase preferences for new products in a one time period game. In an extended game, we find that because buyback contracts encourage earlier experimentation with the new product, participants learn faster and converge to selecting the most profitable product faster when offered a buyback back contract rather than a wholesale price contract. 2 - Inventory Decisions in the Presence of Strategic Customers: Theory and Behavioral Evidence Benny Mantin, University of Luxembourg, 162A, Avenue de la We study the inventory decisions of a retailer facing a mix of myopic and strategic consumers in a two-period selling horizon with pre-announced markdowns. Testing our theoretical model via lab experiments, we find that while retailer subjects exhibit the pull-to-center bias, as observed in standard newsvendor experiments, their orders may be pulled below the mean demand in the presence of strategic customers (referred to as pull-below-center bias). We develop a behavioral model based on reference dependence and fit it to our data, which explains the pull-below-center phenomenon, as well as the presence and asymmetry of the generalized pull-to-center effect observed in our experiment. 3 - An Experimental Investigation of Transshipment and Local Decision Making Kay-Yut Chen, University of Texas at Arlington, 511 Pine Island Circle, Mansfield, TX, 76063, United States, kychen@uta.edu, Shan Li When a retailer has surplus stock and another has a supply shortage, it is desirable to transfer surplus stock from the former to the latter. We experimentally examine how transshipments between two independent retailers affect local decisions of inventory and transfer price. We found that transfer prices and inventory decisions are dependent on whether the prices are set before or after inventory decisions and the realization of the demand. We construct a behavioral model, incorporating bounded rationality, fairness and psychological pain of excess supply to explain the findings. 4 - Trusting the Forecast: the Role of Numeracy Tobias Stangl, University of Cologne, Cologne, 50923, Germany, tobias.stangl@uni-koeln.de, Gary Bolton, Elena Katok In a controlled study of decision making in a simple take-the-risk or take-the-cost decision game, we examine compliance rates (trust) for forecast guidance provided as probabilities as well as recommendations. Most strikingly, and contrary to our initial expectation, low numerate subjects exhibit less trust in recommendation forecasts than do high numerates. While we find a positive relationship between subject numeracy and trust in probability forecasts, this relationship is overshadowed by the fact that even high numerate subjects use the probabilities inefficiently. Faïencerie, Luxembourg City, L-1511, Luxembourg, benny.mantin@uni.lu, Yang Zhang, Yaozhong Wu

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