Informs Annual Meeting Phoenix 2018

INFORMS Phoenix – 2018

WA16

2 - Randomized Product Display (Ranking), Pricing, and Order Fulfillment for E-commerce Retailers Yanzhe Lei, Queen’s University, Kingston, ON, Canada, Stefanus Jasin, Joline Uichanco, Andrew Vakhutinsky We consider an etailer selling multiple products stored in multiple warehouses to customers from multiple regions. For each customer, etailer may customize the pricing decision, the product display decision (i.e. which products to display in what order on the website), and the fulfillment decision (i.e., where to dispatch individual items from). We propose a tractable LP formulation and then construct a novel randomization scheme that translates the solutions to the LP into control parameters. We test the performance of the proposed control in large-scale Tarek Abdallah, Kellogg School of Management, Northwestern University, 2211 Campus Dr, Evanston, IL, 60208, United States, Joshua Reed, Arash Asadpour We study the impact of operational levers such as limited inventory and short selling horizons on the optimal bundling strategy. We incorporate the bundling problem into a classical network revenue management problem and go beyond the classical fluid regime. In particular, in our problem there are three main parameters that can be scaled: (1) the arrival rate, (2) the inventory, and (3) the number of product types. By considering the different ways these parameters can be scaled, we can capture different dynamics of the problem that correspond to different market properties. Our preliminary results reveal an interesting interplay between the operational parameters and the optimal selling strategy. Joint Session MSOM/Practice Curated: Waste Issues Sponsored: Manufacturing & Service Oper Mgmt/Sustainable Operations Sponsored Session Chair: Arzum E. Akkas, Boston University, Cambridge, MA, 02142, United States Co-Chair: Dorothee Honhon, University of Texas at Dallas, Richardson, TX, 75080, United States 1 - Package Size and Pricing Decisions with a Bulk Sale Option Dorothee Honhon, University of Texas at Dallas, 800 West Campbell Road, SM30, Richardson, TX, 75080, United States, Ismail Kirci, Alp Muharremoglu We investigate the package size and pricing decisions of a retailer selling a perishable product to a population of heterogeneous customers who choose between buying the product in packages of a fixed pre-set size or buying the product in bulk, which allows them to buy the exact quantity which maximizes their expected net utility. We show that, contrary to popular beliefs, the existence of a bulk sale option at the retailer’s may not always be environmentally beneficial as it may, in some cases, lead to more waste at the consumer level. 2 - Reducing Carbon Footprint of Grocery Retailing Elena Belavina, SC Johnson College of Business, Cornell University, Ithaca, NY, 14853, United States, Ekaterina Astashkina, Simone Marinesi This paper studies how e-retailing of perishables impacts market emissions. With low online adoption, inventory decentralization (due to extra stocking location of an e-retailer) is harmful and increases emissions (the result that is in line with conventional wisdom). However, with high enough adoption, the e-retailer gains enough scale, rendering decentralization, surprisingly, beneficial to the environment. Interestingly, equal demand split among retail locations leads to the worst environmental outcome. That is, we find that traditional models consider the worst kind of inventory decentralization. 3 - Implications of Eliminating Aesthetic Grading in Agricultural Supply Chains Karthik Murali, University of Alabama, 351 Alston Hall, Tuscaloosa, AL, 35487, United States, Isil Alev The grading of produce based on aesthetics is among the biggest contributors to food waste. Using a stylized model, we explore how crop yield and consumer preferences shape the economic and environmental consequences of eliminating grading in the agricultural supply chain by introducing aesthetically differentiated produce at the retail level. numerical experiments with real retail data. 3 - Revenue Management with Bundles n WA16 North Bldg 127B

n WA14 North Bldg 126C Emerging Topics in Service Operations Sponsored: Manufacturing & Service Oper Mgmt/Service Operations Sponsored Session Chair: Yuqian Xu, University of Illinois at Urbana-Champaign, Champaign, IL, 61820, United States 1 - Evolution of Ride Services Daehoon Noh, University of Maryland, College Park, MD, 20742, United States, Tunay Tunca, Yi Xu Ride services bring together drivers and customers in two-sided matching markets. As these services mature multiple competing operational models emerge. In this paper, we utilize a multi-stage multi-firm model to analyze the competition between different ride service models. We study the market equilibrium and identify the factors that determine pricing and shaping of market segmentation. 2 - Information and Coordination in Supply Chain Management: A Case of Fast Food Restaurant Chain Jiahua Wu, Imperial College Business School, Imperial College London, London, SW7 2AZ, United Kingdom, Ming Hu, Peng Luo Our study is based on a data set from a fast-food restaurant chain. During the observation window, this restaurant chain switched from third-party POS systems to their own system, which allows them to gather real-time sales information from stores. We study store managers’ adjustment of operational decisions in response to this change, as well as the resulting impact on customer satisfactions. Surprisingly, customer satisfaction deteriorates as a result of this change. We show that mis-coordination between supply and system update is the reason for that. 3 - The Impact of Bike Sharing on Environment Shuai Hao, University of Illinois Urbana-Champaign, Champaign, IL, United States, Yuqian Xu, Anindya Ghose Bike sharing is becoming more and more popular across the world and has drawn increasing attention from the operations management and other research community. However, so far as we know, limited work has been done on quantifying the environmental impact of bike sharing. This work aims to quantify the impact of bike sharing on air quality and estimate the causal effects. Also, we want to take one step further to understand the mechanism behind this impact through analyzing the public transportation data. 4 - A Model of Network Formation with Heterogeneous Players Lingjiong Zhu, Florida State University, 1017 Academic Way, Room 208, Tallahassee, FL, 32306, United States, Angelo Mele We study an equilibrium model of sequential network formation with heterogeneous players. The payoffs depend on the number and composition of direct connections, but also the number of indirect links. We show that the network formation process is a potential game and in the long run the model converges to an exponential random graph (ERGM). Since standard simulation- based inference methods for ERGMs could have exponentially slow convergence, we propose an alternative deterministic method, based on a variational approximation of the likelihood. n WA15 North Bldg 127A Advances in Service Operations Sponsored: Manufacturing & Service Oper Mgmt/Service Operations Sponsored Session Chair: Tarek Abdallah, New York University, New York, NY, 10029, United States 1 - Nudging Flexible Workforce: Empirical Evidence from Online Cleaning Services Platform Ruslan Momot, HEC Paris, 1 Rue de la Libération, Jouy-en-Josas, 78350, France, Ekaterina Astashkina, Marat Salikhov This study focuses on platforms that facilitate matching of heterogeneous customers (tasks) with heterogeneous contractors. Centralized platforms (e.g. Uber) rigidly assign contractors to customers, while decentralized platforms (e.g. TaskRabbit) let contractors choose tasks they prefer. We compose the right personalized assortment of tasks that hybrid platforms should offer to its contractors. We build an econometric model of contractors’ choice, which we estimate on a proprietary dataset of the cleaning platform (similar to HomeJoy). We then formulate platform’s online optimization problem of assortment personalization and identify policies that achieve near-optimal performance.

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