Informs Annual Meeting 2017

SC14

INFORMS Houston – 2017

SC14

We study channel encroachment by a supplier privately informed of its cost of direct selling. The supplier’s direct selling capability may positively or negatively affect the supplier’s and buyer’s profits due to signaling. Both firms and consumers may be worse off from the buyer’s acquisition of private cost information. 2 - Managing Opportunistic Consumer Returns in Retail Operations Mehmet Sekip Altug, George Washington University, 2201 G.Street NW, Funger 415, Washington, DC, 20052, United States, maltug@gwu.edu, Tolga Aydinliyim, Aditya Jain Although lenient return policies are prominently used in retail, such policies may induce opportunistic return behavior, i.e., short-term purchases with no intention to keep the product, which essentially creates two distinct market segments. In this study, we investigate three state-of-the-art retail strategies: i) Uniform ii) Targeted (enabled by data analytics) iii) Menu of choice return policies. We consider a price-setting newsvendor who also chooses an optimal refund to study the three aforementioned settings and provide insights on when retailers can justify investing in analytics-driven decision making and when they can afford to use traditional approaches to return management. 3 - Improving Supply Quality using Retailer-initiated Returns Hao-Wei Chen, University of Toledo, Toledo, OH, United States, haowei.chen@utoledo.edu, Wen-Ya Wang With retailer-initiated returns, customers are encouraged to return purchased items for refunds regardless of their satisfaction level. We investigate how such a strategy affects the supply chain partners’ profits and the quality of the product from the supplier through stochastic models. We also discuss the timing for initiating the returns. 332F Inventory Management Contributed Session Chair: Qiang Wang, University of Science and Technology of China, Hefei, China, qiangwan@mail.ustc.edu.cn 1 - Self-reservation Policy to Deal with Fixed and Variable Stockout Costs Boray Huang, Eindhoven University of Technology, P.O. Box 513, School of Industrial Engineering, Eindhoven, 5600MB, Netherlands, b.huang@tue.nl, Andy Wu We consider a make-to-stock system to satisfy bulk demand with an exponential inter-arrival time. A key issue in this system is the non-convex shortage cost consisting of fixed and variable expenditures when the demand is not fully satisfied. We propose a type of self-reservation policy by a Markov Decision Process. Our numerical examples indicate the optimal policy may reduce the total average cost by 47% on average. 2 - Simple Modeling Techniques for Base-stock Inventory Systems with State Dependent Demand Rates Fredrik Olsson, Dr., Lund University, Ole Römers väg 1, Lund, 221 00, Sweden, fredrik.olsson@iml.lth.se In this paper new modeling techniques of (S-1,S) inventory systems with state dependent demand rates are proposed. Examples of single-location (S-1,S) inventory systems where the demand, experienced by the system, varies due to the state of the system are, e.g., inventory models with partial backorders, lost sales, perishable items, emergency replenishments etc. Instead of, as in the related literature, using partial differential equations we suggest considerably simpler techniques which are based on elementary theory of queueing and renewal processes. 3 - Inventory Models with Service Differentiation Through Response Time Guarantees Adriana Gabor, Assistant Professor, United Arab Emirates University, Al Ain, United Arab Emirates, adriana.gabor@uaeu.ac.ae, Lars van Vianen, Guangyuan Yang, Sven B.Axsater Service providers often differentiate their customers through their response time guarantee. Most of the inventory models however, use the fill rate as measure of differentiation. In this paper we incorporate response time guarantees into a (S- 1,S,K) model with two customer classes, in which low priority customers are served only if the inventory level is above K. We employ lattice paths combinatorics to derive the exact distribution of the response time for the lower priority class and provide a simple approximation for the response time of the high priority class. We study the impact of response time guarantee on inventory levels as opposed to fill rates. SC16

332D Emerging Trends in Healthcare Policy Sponsored: Manufacturing & Service Oper Mgmt, Healthcare Operations Sponsored Session Chair: Hamed Mamani, University of Washington, Seattle, WA, 98195- 3226, United States, hmamani@uw.edu Co-Chair: Shima Nassiri, University of Washington/Foster School of Business, Seattle, WA, 98195, United States, shiman@uw.edu 1 - Contracts for Healthcare Referral Services Fernanda Bravo, UCLA Anderson School of Management, 110 Westwood Plaza, B4.11, Los Angeles, CA, 90024, United States, fernanda.bravo@anderson.ucla.edu, Elodie Adida This work focuses on the B2B interaction between a service requester and a service provider in a healthcare environment. The requester is responsible for managing the health of a population of patients, and refers the patient to a provider for advanced care needs. The requester may exert effort to reduce the volume of referrals and the provider may exert effort to reduce the chance of treatment failure. We analyze a variety of payment systems between the two firms and study how to coordinate the effort decisions with either the system optimum or the social optimum. 2 - Longer Quality-adjusted Life Years with Less Cost? – Yes, the Mobile Clinic Operation Can Help Fang Liu, Nanyang Technological University, S3-B2a-13, 50 In this paper, we consider a discrete-time mobile clinic (MC) delivery model and study the optimal MC implementation from the viewpoint of the government. Specifically, we consider the following three objectives: (1) cost reduction, (2) improving the quality of the adjusted life years (QALYs) of the remote population, and (3) a bi-objective optimization defined as a weighted average of the above two performance measures. We then characterize the corresponding optimal MC delivery policy under each objective, and investigate how disease characteristics affect the MC operation. 3 - Empirical Queues for Health Policy Evaluation Donald Lee, Yale School of Management, 165 Whitney Ave, Box 208200, New Haven, CT, 06520, United States, donald.lee@yale.edu A range of health policy questions, from end-of-life care initiation to organ transplant allocation, can be modelled as stochastic networks. The transition dynamics of customers in these networks may depend not only on the network node, but also on the customer’s characteristics which may be time-varying. We introduce a new approach for estimating such transition dynamics from data, in order to facilitate the simulation of high resolution counterfactuals. We use the approach to revisit a question concerning the impact of workload on service speed in emergency departments. Based partly on joint works with Ningyuan Chen and with Edieal Pinker. 4 - Reference Pricing for Healthcare Services Shima Nassiri, University of Michigan - Ross School of Business, Ann Arbor, MI, United States, snassiri@umich.edu, Hamed Mamani, Elodie Adida The traditional payment system between an insurer and hospitals does not incentivize hospitals to limit their prices and patients to choose less expensive providers, hence contributing to high insurer costs. Reference pricing (RP) has been proposed as a way to better align incentives and control costs. Under RP, the patient may be responsible for part of the cost if they select a high-price hospital. We propose a model to analyze the RP payment scheme that incorporates an insurer, competing hospitals, and patients with the goal of understanding how RP compares with the current payment system. Nanyang Avenue, Singapore, 639798, Singapore, liu_fang@ntu.edu.sg, Yulan Wang, Pengfei Guo 332E Retail Supply Chains Sponsored: Manufacturing & Service Oper Mgmt, Supply Chain Sponsored Session Chair: Hao-Wei Chen, University of Toledo, Toledo, OH, 43606, United States, hao-wei.chen@sjsu.edu 1 - Supplier Encroachment with Private Selling Cost Information Haresh B. Gurnani, Wake Forest University, 319 Farrell Hall, School of Business, 1834 Wake Forest Road, Winston Salem, NC, 27106, United States, gurnanih@wfu.edu, Huiqi Guan, Zhibin (Ben) Yang SC15

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