Informs Annual Meeting Phoenix 2018

INFORMS Phoenix – 2018

WC15

2 - Manufacturing Network Design in the Pharmaceutical Industry under Life-cycle Demand Gregor Blossey, German Graduate School of Management and Law, Heilbronn, 74076, Germany, Gerd J. Hahn, Achim Koberstein This research investigates the value of flexibility in manufacturing networks of the pharmaceutical industry. Pharmaceutical companies typically operate under life-cycle demand and are subject to two sources of uncertainty: demand uncertainty and product approval uncertainty. We present a two-stage stochastic programming model to determine the optimal level of capacity flexibility using multiple product allocations and outsourcing to contract manufacturing organizations. A numerical study is conducted with real-life data provided by a global pharmaceutical company. 3 - Integrated Order Acceptance, Production Planning, and Distribution Problems Utku Koc, MEF University, Huzur Mah. Ayazaga Cad No: 4, Maslak-Sariyer-Istanbul, Istanbul, 34396, Turkey We study a manufacturer’s multi-period production planning problem to produce and ship a subset of available orders from a given set, meeting due window constraints, with the maximum profit. Each potential order has a revenue, size, and a due window. The profit is calculated as the revenue minus the transportation and inventory holding costs. The manufacturer can use different type of vehicles varying in their price and availability for outbound transportation. We study three different delivery characteristics: 1) whether orders can be split or not, 2) whether they can be consolidated or not, and 3) whether their sizes are restricted to be in integer multiples of vehicle capacities or not. 4 - The Optimal Width Decision for Cardboard Used in On Demand Packaging Yihuan Yang, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong, Xiangtong Qi For packaging problem, if the box could fit the products perfectly, there would be no packing fillers waste and less corrugated cardboard is used. The box-making machine with one long continuous piece of cardboard is used to cut the right- sized box. So the main problem is how to decide the proper width of the cardboard. The framework introduced in this paper can help to make better decisions so that the material waste is minimized. Compared with other naive methods, the policy obtained by our framework has better performance, especially when the penalty of exceeding capacity is high. 5 - Learning About a New Market from Supplier Perspective Jing Luo, University of Pittsburgh, Pittsburgh, PA, 15208, United States How to learn about a new market? What information and method are important for suppliers? n WC15 North Bldg 127A Improving Services: Role of Incentives and Simple Policies Sponsored: Manufacturing & Service Oper Mgmt/Service Operations Sponsored Session Chair: Ramandeep Randhawa, University of Southern California, Los Angeles, CA, 90089, United States Chair: Achal Bassamboo 1 - Tipping for Fast Service: The Role of a Social Norm Ran Snitkovsky, Tel Aviv University, Tel Aviv, Israel, Laurens G. Debo We discuss how tipping for fast services emerges as a norm in a congested environment when after the joining and consumption phase, customers meet in a social market place where they compare each others’ tips and incur disutility when these tips differ from each other. 2 - Managing Supply in the On-demand Economy: Flexible Workers or Full-time Employees Jing Dong, Columbia University, Uris Hall 413, 3022 Broadway, New York, NY, 10027, United States, Rouba Ibrahim We study the optimal staffing problem with a blended workforce. The goal is to strike a balance between staffing cost and service quality in presence of time- varying demand, supply side flexibility, and supply side uncertainty. We consider a queueing framework, where the number of servers is random due to the supply side uncertainty, and develop appropriate approximations that provide key insights into the staffing problem. We also study the impact of supply side uncertainty on the quality of service.

3 - Revenue Loss of Simple Contracts with Price and Delay Differentiated Customers Abhishek Ghosh, Northwestern University, Evanston, IL, United States, Achal Bassamboo, Ramandeep Randhawa We analyze a service firm that caters to price and delay sensitive customers by offering a menu of price-delay pairs. We study the gap in revenue for the firm under the worst-case valuation and delay sensitivity parameters. We also characterize the asymptotically optimal contract when the number of customer classes is large and provide the optimality conditions and the associated revenue loss. 4 - Dynamic Matching in School Choice: Efficient Seat Reassignment after Late Cancellations Irene Yuan Lo, Columbia University, New York, NY, United States When assigning scarce public school seats to students, a key operational issue is how to reassign seats that are vacated after an initial round of assignment. We propose a class of reassignment mechanisms, the Permuted Lottery Deferred Acceptance (PLDA) mechanisms, which generalize the commonly used Deferred Acceptance school choice mechanism and retain its desirable incentive and efficiency properties. We find that under natural conditions on demand all PLDA mechanisms achieve equivalent allocative welfare and the PLDA based on reversing the lottery order minimizes reassignment. Empirical investigations on data from NYC high school admissions support our theoretical findings. n WC17 North Bldg 127C Tactical Assortment & Inventory Planning Sponsored: Manufacturing & Service Oper Mgmt/Supply Chain Sponsored Session Chair: Shahab Derhami, ISyE Ga Tech, Atlanta, GA, 30332, United States Co-Chair: Iman Dayarian, Georgia Institute of Technology, Atlanta, GA, 30332, United States 1 - Assortment Planning for Retailers of Substitutable High-value Products under Stochastic Demand Shahab Derhami, Georgia Tech, NW, Atlanta, GA, 30332, United States, Iman Dayarian, Benoit Montreuil We present challenges that retailers of high-value products face in determining the optimal assortment plan and inventory level decisions under stochastic demand, customer substitution, and long order lead-time constraints. We develop a scenario-based stochastic optimization model to address this problem and demonstrate the simulation results of implementing this model on the network of dealerships of a leading manufacturer of recreational vehicles in North America. 2 - Assortment Planning Under Product Substitution, Stochastic Demand, and Dealer Network Exchange Iman Dayarian, Culverhouse College of Commerce, University of Alabama, Box 870226, Tuscaloosa, AL, 35487, United States, Shahab Derhami, Benoit Montreuil We consider the context of assortment and inventory level planning of a network of dealers, offering high-value products. If a dealer is not able to meet a customer’s demand based on his current inventory, he may offer an exchange to one of the neighboring dealers who possesses a product that satisfies the customer’s demand. In such an environment, assortment recommendations to the dealers must take into account scenarios in which dealers attempt to collectively reduce the chance of lost sales in a district. We first formally describe this context, and then propose a centralized decision making procedure, which makes assortment and inventory level recommendations to the dealers within a district. 3 - Product Availability Optimization in High-value Product Retail Networks Jinyong Yim, Georgia Institute of Technology, Atlanta, GA, United States, Iman Dayarian, Shahab Derhami, Benoit Montreuil We present a model to maximize product availability under stochastic demand and fast replenishment assumption in a network of hyperconnected dealerships of vehicles. Our model considers possible on-demand inventory transshipment between retail centers to satisfy the demand for an out-of-stock product. We present the results of implementing our model on the distribution network of a manufacturer of recreational vehicles in North America.

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