Informs Annual Meeting 2017

WB46

INFORMS Houston – 2017

WB46

WB47

360E Project Management Contributed Session Chair: Yigal Gerchak, Tel Aviv University, Tel-Aviv, Israel, yigal@post.tau.ac.il 1 - Moral Hazard Problem and Incentive Contract in Engineering Procurement and Construction Project Wanshan Zhu, Tsinghua University, Dept of Industrial Engineering, Shunde Building #613, Beijing, 100084, China, zhuws@tsinghua.edu.cn, Zhenzhen Chen, Pascale Crama, Xiaobo Zhao In Engineering Procurement Construction (EPC) projects, the End User contracts with the main contractor on the overall quality of the project, while the main contractor subcontracts the project to several subcontractors. The subcontracting stage may incur moral hazard problem due to the unobservable efforts of the subcontractors. We study the optimal incentive contracts between the main contractor and several sub-contractors from the main contractor’s perspective, aiming to motivate the sub-contractors to exert high efforts. As a result, the project can obtain a high overall quality, and the main contractor gains high profit. 2 - Research on Government Guarantees of Highway Public-private Partnerships Projects Zhenyao Wu, Southwest Jiaotong University, China, NO.111 North of 2nd Ring Road, Chengdu, 610031, China, zhenyao2512@163.com, Bin Shuai, Peng Hu In Public-private Partnerships (PPP) projects, government usually provides government guarantees to attract private sectors. This paper established model to value the government guarantees. The Monte Carlo simulation was adopted to simulate operating parameters in the model. Finally, the model was applied to a highway PPP project. The authors find that the impact of tariff on the net present value is greater than that of minimum traffic guarantee (MTG) in the project. In addition, the optimal option is a compound option of MTG and traffic cap. The research not only can help government develop reasonable guarantee policies but also can help private sectors to make better investment decisions. 3 - Moments and Distribution of the NPV of a Project Stefan Creemers, IESEG School of Management, Rue de la Digue 3, Lille, 59000, France, sc@cromso.com Stefan Creemers, KU. Leuven, Naamsestraat 69, Leuven, 3000, Belgium, sc@cromso.com We study the NPV of a project with multiple stages that are executed in sequence. A cash flow may be incurred at the start of each stage, and a payoff is obtained at the end of the project. The duration of a stage is a random variable with a general distribution function. For such projects, we obtain exact, closed-form expressions for the moments of the NPV, and develop a highly accurate closed-form approximation of the NPV distribution itself. Our work has direct applications in the fields of project selection, project portfolio management, and project valuation. In addition, our work is closely related to the work of CPM/PERT, however, whereas CPM/PERT deals with project completion time, we focus on NPV. 4 - A Multi-skill Approach to Property Maintenance Considering Spatial, Temporal and Resource Constraints This paper proposes the application of a novel mathematical model to aid in the scheduling and assignment of construction and maintenance tasks, considering the multi-skilled workforce. Data from a case firm was analyzed so that operational insights into the necessity of such a model could be considered. The optimization approach to multi-skilled resource allocation considers the temporal and spatial demands of a geographically dispersed property management portfolio. Generalization of this data allows a hierarchical framework of skill and task development that can be used to assign the best-capable worker to the most cost-efficient task, considering deadlines, priorities and availability. 5 - Comparison of Strategies of Assigning a Project to Agents where Activities Can Succeed or Fail Yigal Gerchak, Professor, Tel Aviv University, Department of Industrial Engineering, Ramat-Aviv, Tel-Aviv, 69978, Israel, yigal@post.tau.ac.il, Christian Schmid R&D projects consist of multiple activities which can fail, but all need to succeed for the project to succeed. Should each activity be assigned to a different agent, or all activities to one agent, where in the latter case several agents are working on the entire project in parallel, and it is sufficient if one of them succeeds? We consider the effect of advantageous specialization, of a deadline, and of heterogeneous activities. Anthony Vatterott, University of Missouri-Saint Louis, 6254 Walsh, Saint Louis, MO, 63109, United States, anthonygvatterott@gmail.com, Norman Womer, Haitao Li

360F Business Applications Contributed Session Chair: Dongdong Ge, Shanghai University of Finance and Economics, Shanghai, China, dongdong@gmail.com 1 - Fraud Detection in Sports Based on Quantitative Compliance Leif Meier, Professor, HS.Bremerhaven, An der Karlstadt 8, Bremerhaven, 27568, Germany, lmeier@hs-bremerhaven.de Compliance Management describes the management of regulations in business operations, driven by qualitative analysis in the past. A quantitative Compliance view is highly required to manage restrictions and obligations from regulations and to identify outliers in a massive number of transactions from automated and global business operations. Latest national and international business scandals and corruption in sports have led to a significant reputational and also financial damage, which could destroy industries. This work presents an OR approach for Fraud Detection in Sports from Quantitative Compliance with similar models used in Finance for Anti-Money-Laundering identification. 2 - Inventory Decision Support for a Glass Fabricator Matthew D. Dean, Associate Professor of Business Administration, University of Southern Maine, School of Business, 113 Luther Bonney Hall, Portland, ME, 04104, United States, matthew.d.dean@gmail.com We describe a project that is helping a local glass and metal fabricator improve its inventory replenishment system. Historically, it relied on a manual inventory system controlled by a single person with many years of experience. We developed a user-friendly web-based application with an embedded linear programming model that recommends purchasing decisions to the buyer. 3 - Key Performance Metrics for Successful Business Initiatives Suchitra Veera, Strategy and Analytics Consultant, Snayu Inc, 4512 Dartmoore Lane, Colleyville, TX, 76034, United States, suchitra.veera@gmail.com The objective of this session is to present the topic of the use of performance measurement and tracking metrics for successful business initiatives delivery. Various types of metrics used in measurement of project/program and initiative delivery success will be discussed including cost, schedule and scope related metrics such as earned value, CPI, SPI along with those that are used in agile and lean projects. 4 - Extending the Role of Information Technology Capability and Impact on Firm Performance using New Metrics and Industry Sector Analysis Chuan Tian, University of Oklahoma, Norman, OK, United States, chuan.tian-1@ou.edu, Radhika Santhanam, Pascal Nitiema The linkage between IT (Information Technology) capability and the firm performances remains to be an academic focus. Earlier studies revealed conflicting results. Drawing on Resource Based View (RBV) and incorporating the new features of IT application, this paper empirically investigates the impact of IT capability on firms’ performances based on data from 2008 to 2012. Further, the study finds that firms with advanced IT capability are less volatile compared with companies without. Last, the study validates the positive moderating effect of ICT intensity on the pair of relationship. The result of this study is an important enrichment and extension of the original theoretical framework. 5 - Regularized Estimation for High-dimensional Multi-block Vector Autoregressive Models and its Applications George Michailidis, University of Florida, UF Informatics Institute, 432 Newell Drive, Gainesville, FL, 32611-8545, United States, gmichail@ufl.edu Dynamical systems comprising of multiple components originate in many scientific areas. A pertinent example examines interactions between equity markets and the potential for contagion during crisis periods. We consider a multi-block system with Granger-causal ordering between blocks, wherein the blocks temporal dynamics are described by vector autoregressive processes and are influenced by blocks higher in the system hierarchy. We briefly discuss estimation and inference issues in a high-dimensional setting. We illustrate the model by examining log-returns of the S&P 100 and the Euro Stoxx 50 components stocks for the 2002-2016, to understand linkages between the two equity markets.

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