bluuebunny/crossref_metadata_2025 huggingface dataset:
EVALUATING THE ECONOMIC COST OF ENVIRONMENTAL MEASURES IN PLANTATION HARVESTING THROUGH THE USE OF MATHEMATICAL MODELS
Authors: CARO FELIPE , ANDALAFT RODRIGO , SILVA XIMENA , WEINTRAUB ANDRES , SAPUNAR PEDRO , CABELLO MANUEL
Published: August 2010

An important issue being discussed for Chilean pine plantation policies is the application of environmental protection measures when managing its timber areas. Typical measures, already in place in more developed countries, include imposing riparian strips and protecting fragile soils from the use of heavy machinery. While environmental protection measures have been considered vital for decades, so far there has been almost no attempt to quantify both the benefits and costs of these measures. This paper attempts to measure the costs associated with the main measures which can help both the forestry firms and the government evaluate the cost impact of the new environmental protection regulations being studied. The analysis for different environmental scenarios is carried out by modifying a mixed integer LP, currently used for tactical planning by one forestry firm.
COLLABORATION AND EVALUATION IN THE SUPPLY CHAIN: THE IMPACT ON PLANT‐LEVEL ENVIRONMENTAL INVESTMENT
Authors: KLASSEN ROBERT D. , VACHON STEPHAN
Published: August 2010

Manufacturing organizations can potentially improve environmental management both by increasing the level of investment in environmental technologies and by shifting that investment away from pollution control and toward pollution prevention. However, managers must not only consider their own manufacturing operations in isolation, but also those of others along the supply chain. This paper explores two dimensions of supply chain activities—collaboration and evaluation—that might be leveraged by plant managers to improve environmental management in their own plant. The linkages with suppliers and customers were assessed. Both customer‐ and plant‐initiated collaboration were found to have a significant effect on the level and form of investment in environmental technologies for a sample of Canadian plants. Of greatest importance, as customer‐initiated collaborative activities increased, plant‐level investment in environmental management was increasingly allocated toward pollution prevention. In contrast, only very limited evidence was found that evaluative activities influenced environmental investment.
ENVIRONMENTAL PERFORMANCE AS A DRIVER OF SUPERIOR QUALITY
Authors: PIL FRITS K. , ROTHENBERG SANDRA
Published: August 2010

We explore theoretically and empirically how efforts to enhance environmental performance may enable other types of manufacturing improvements. Drawing on a unique data set comprised of detailed surveys of 42 automotive assembly plants, associated quality metrics, and in‐depth qualitative data from 17 automotive assembly plants, we show that attaining superior environmental performance can be a significant driver of superior quality. We highlight the synergistic and reciprocal nature of environmental and broader manufacturing improvement efforts, and show that environmental improvement tools and know‐how can be an important source of competitive advantage.
THE BENEFITS OF OPTIMIZING PRICES TO MANAGE DEMAND IN HOTEL REVENUE MANAGEMENT SYSTEMS
Authors: BAKER TIMOTHY K. , COLLIER DAVID A.
Published: August 2010

We investigate the revenue impact of a new Price Setting Method (PSM) and compare it with the industry standard Bid Price Method (BPM). This comparison is performed via a simulation that was validated by a major hotel chain. In 27 out of the 32 cases, the PSM outperformed the BPM based on statistically significant tests. The PSM produces an average revenue increase of 34%, which can be thought of as an upper bound on the realistic revenue increase.
OUTPATIENT SCHEDULING IN HEALTH CARE: A REVIEW OF LITERATURE
Authors: CAYIRLI TUGBA , VERAL EMRE
Published: August 2010

This paper provides a comprehensive survey of research on appointment scheduling in outpatient services. Effective scheduling systems have the goal of matching demand with capacity so that resources are better utilized and patient waiting times are minimized. Our goal is to present general problem formulation and modeling considerations, and to provide taxonomy of methodologies used in previous literature. Current literature fails to develop generally applicable guidelines to design appointment systems, as most studies have suggested highly situation‐specific solutions. We identify future research directions that provide opportunities to expand existing knowledge and close the gap between theory and practice.
AMPLIFICATION IN SERVICE SUPPLY CHAINS: AN EXPLORATORY CASE STUDY FROM THE TELECOM INDUSTRY
Authors: AKKERMANS HENK , VOS BART
Published: August 2010

Evidence on the impact of amplification effects on supply chain performance primarily has been derived from studies in manufacturing industries. In this article we reported on a case study from the telecommunication industry and aimed to analyze relevant root causes and associated countermeasures of the amplification phenomenon in service supply chains. Our case findings confirm the occurrence of upstream amplification of workload in the service supply chain, workload being a more appropriate measure for amplification effects in service supply chains than inventory levels. Not all of the root causes for amplification effects known from research in manufacturing environments were found to apply in this particular service context, especially those related to the use of inventory.

In addition, our telecom case study highlighted a new root cause for amplification: interactions of high workloads and reduced process quality that start reinforcing each other once workloads pass a certain threshold. In this particular case, many of the known countermeasures to eliminate amplification did not apply, because of the specific characteristics of the service process, or yielded only limited results. A potentially very powerful countermeasure identified was to implement quality improvements throughout the service chain. This quality dimension links our research to the literature on service management in general, where service quality is on top of the research agenda.
APPOINTMENT POLICIES IN SERVICE OPERATIONS: A CRITICAL ANALYSIS OF THE ECONOMIC FRAMEWORK
Authors: MONDSCHEIN SUSANA V. , WEINTRAUB GABRIEL Y.
Published: August 2010

In this paper we review the literature on appointment policies, specifically in terms of the objective function commonly used and the assumptions made about the behavior of demand. First, we provide an economic framework to analyze the problem. Based on this framework we make a critical analysis of the objective functions used in the literature. We also question the validity of the assumption made throughout the literature that demand is exogenous and independent of customers' waiting times. We conclude that the objective functions used in the literature are appropriate only in the case of a central planner facing a demand that is unresponsive to waiting time. For other scenarios, such as a private server facing a demand that does react to waiting time, these objective functions are only shortcuts for the real objective functions that must be used. A more general model is then proposed that fits these scenarios well. Finally, we determine the impact of using the literature's objective functions on optimal appointment policies.
Distributed Decision‐Making in Supply Chains and Private E‐Marketplaces
Authors: Poundarikapuram Sricharan , Veeramani Dharmaraj
Published: August 2010

This paper develops a distributed decision‐making framework for the players in a supply chain or a private e‐marketplace to collaboratively arrive at a global Pareto‐optimal solution. In this model, no player has complete knowledge about all the costs and constraints of the other players. The decision‐making framework employs an iterative procedure, based on the Integer L‐shaped method, in which a master problem is solved to propose global solutions, and each player uses his local problems to construct feasibility and optimality cuts on the master problem. The master problem is modeled as a mixed‐integer program, and the players' local problems are formulated as linear programs. Collaborative planning scenarios in private e‐marketplaces and in supply chains were formulated and solved for test data. The results show that this distributed model is able to achieve near‐optimal solutions considerably faster than the traditional centralized approach.
Performance Improvement Paths in the U.S. Airline Industry:Linking Trade‐offs to Asset Frontiers
Authors: Lapré Michael A. , Scudder Gary D.
Published: August 2010

Several articles have been written during the past few years examining performance improvement paths and various forms of efficiency frontiers in operations strategy. These articles focus primarily on defining and describing these frontiers and raise questions concerning how to improve operations. In this paper, we provide one of the first empirical studies aimed at validating these earlier studies. Using a database on the 10 largest U.S. airlines for a period of 11 years, we test and validate some of the models presented in the operations literature. The 10 major airlines are separated into 2 groups for analysis: geographic specialists and geographic generalists. Our analysis shows that better performing airlines (in terms of cost‐quality position) in both groups confirm the predictions of the sand cone model when operating further away from their asset frontiers, although trade‐offs do occur when operating close to asset frontiers.
Coordination of Supply Chains with Risk‐Averse Agents
Authors: Gan Xianghua , Sethi Suresh P. , Yan Houmin
Published: August 2010

The extant supply chain management literature has not addressed the issue of coordination in supply chains involving risk‐averse agents. We take up this issue and begin with defining a coordinating contract as one that results in a Pareto‐optimal solution acceptable to each agent. Our definition generalizes the standard one in the risk‐neutral case. We then develop coordinating contracts in three specific cases: (i) the supplier is risk neutral and the retailer maximizes his expected profit subject to a downside risk constraint; (ii) the supplier and the retailer each maximizes his own mean‐variance trade‐off; and (iii) the supplier and the retailer each maximizes his own expected utility. Moreover, in case (iii), we show that our contract yields the Nash Bargaining solution. In each case, we show how we can find the set of Pareto‐optimal solutions, and then design a contract to achieve the solutions. We also exhibit a case in which we obtain Pareto‐optimal sharing rules explicitly, and outline a procedure to obtain Pareto‐optimal solutions.
Fit, Flexibility and Performance in Manufacturing: Coping with Dynamic Environments
Authors: Anand Gopesh , Ward Peter T.
Published: August 2010

This research develops the notion of environmental fit and flexibility and illustrates the importance of such fit empirically using survey data from 101 manufacturing firms. Two dimensions of environmental dynamism are identified and the fit between them and different approaches to flexibility are assessed. Hierarchical regressions provide evidence that flexibility is a stronger predictor of performance in more dynamic environments. Specifically, presence of the unpredictability or the volatility aspects of environmental dynamism each warrant the use of different types of manufacturing flexibility strategies. Statistical results are interpreted with the caveat that while implemented capability must be used to study performance effects, this study uses perceived importance scales for flexibility.
Practical Implications of Preference‐Based Conference Scheduling
Authors: Sampson Scott E.
Published: August 2010

Conference scheduling involves organizing presentations into sessions which are assigned to time periods and rooms. This includes assuring a feasible utilization of time periods and rooms, and avoiding individual schedule conflicts. The problem increases in complexity by considering the preferences of presenters: for time periods, for rooms, etc. A greater level of complexity comes from considering the preferences of conference attendees, which we define as preference‐based conference scheduling (PBCS). This article provides a structure on which PBCS problems are founded, including empirical demonstration of solution techniques. In addition, real‐world strategic planning issues of flexibility and preference detail are explored.
Adoption of e‐Processes by Service Firms: An Empirical Study of Antecedents
Authors: Tsikriktsis Nikos , Lanzolla Gianvito , Frohlich Mark
Published: August 2010

This paper investigates empirically antecedents of the adoption of web‐based processes (e‐processes) by service providers. We examine whether rational efficiency (expressed by expected performance benefits and access to new markets), the bandwagon effect (expressed by external pressure), and barriers (both internal and customer related) influence Internet use for transactions (e‐transactions) and/or to extend the relationships between service providers and their customers (e‐CRM). The findings, based on a sample of 338 service firms, show that rational efficiency and the bandwagon effect drive both types of e‐processes. Conversely, only internal barriers have a negative impact on adoption of e‐processes, while barriers related to customers do not have a significant impact. These findings have important academic and managerial implications, given the limited evidence regarding the implementation of e‐processes in services.
Managing Demand Risk in Tactical Supply Chain Planning for a Global Consumer Electronics Company
Authors: Sodhi ManMohan S.
Published: August 2010

We consider the problem of managing demand risk in tactical supply chain planning for a particular global consumer electronics company. The company follows a deterministic replenishment‐and‐planning process despite considerable demand uncertainty. As a possible way to formally address uncertainty, we provide two risk measures, “demand‐at‐risk” (DaR) and “inventory‐at‐risk” (IaR) and two linear programming models to help manage demand uncertainty. The first model is deterministic and can be used to allocate the replenishment schedule from the plants among the customers as per the existing process. The other model is stochastic and can be used to determine the “ideal” replenishment request from the plants under demand uncertainty. The gap between the output of the two models as regards requested replenishment and the values of the risk measures can be used by the company to reallocate capacity among different products and to thus manage demand/inventory risk.
Industry Clockspeed and the Pace of New Product Development
Authors: Carrillo Janice E.
Published: August 2010

Recent empirical literature describes an industry's clockspeed as a measure of the evolutionary life cycle, which captures the dynamic nature of the industry. Among other factors, the rate of new product development is found to be associated with an industry's clockspeed. Yet the notion of an industry clockspeed and the essential factors driving suitable decision making in this area have remained relatively unexplored. We develop a simple definition and a corresponding analytic model which explains the interdependent relationship between a firm's own new product development activities and an industry clockspeed. Results from the single firm model show the conditions under which particular firms have an incentive to accelerate their new product development activities. Moreover, we link the single firm's NPD clockspeed decisions to the industry level by creating appropriate metrics which characterize different types of industries. Examples from high‐tech industries such as the personal computer and aerospace industries are included to illustrate our findings. Our intention is not only to offer analytical insights into factors driving the clockspeed for these industries, but also to establish a fundamental structured decision making approach, thereby stimulating future research on this important topic.
Managing High‐Tech Capacity Expansion via Reservation Contracts
Authors: Erkoc Murat , Wu S. David
Published: August 2010

We study capacity reservation contracts between a high‐tech manufacturer (supplier) and her OEM customer (buyer). The supplier and the buyer are partners who enter a ‘design‐win” agreement to develop the product, and who share the stochastic demand information. To encourage the supplier for more aggressive capacity expansion, the buyer reserves capacity upfront by paying a deductible fee. As capacity expansion demonstrates diseconomy of scale in this context, we assume convex capacity costs. We show that as the buyer's revenue margin decreases, the supplier faces a sequence of four profit scenarios with decreasing desirability. We examine the effects of market size and demand variability to the contract conditions. We propose two channel coordination contracts, and discuss how such contracts can be tailored for situations where the supplier has the option of not complying with the contract, and when the buyer's demand information is only partially updated during the supplier's capacity lead‐time.
A Hierarchical Product Development Planning Framework
Authors: Anderson Edward G. , Joglekar Nitin R.
Published: August 2010

Uncertainty in new product development (NPD) planning embraces market, creative, technological, and process dimensions to a much greater extent than in non‐NPD project planning. Yet, NPD management is becoming increasingly decentralized, both within the firm and across the supply chain. Hence, planning for NPD uncertainty often results in path‐dependent scenarios cutting across the strategic, tactical, and operational levels of planning. To coordinate this resulting complexity, we propose a stochastic hierarchical product development planning framework with multiple recourses, i. e., corrective actions, to maximize performance across a firm's entire NPD program. We also argue the necessity for a fourth planning level, the infrastructural, that reestablishes norms for market projections, technological forecasts, scheduling, and requirements as latent uncertainty in the environment is continually revealed. An illustration from the automotive industry is presented to demonstrate a deployment of our framework. We additionally discuss the applicability of this framework for managing NPD capabilities over time.
In‐Store Experiments to Determine the Impact of Price on Sales
Authors: Gaur Vishal , Fisher Marshall L.
Published: August 2010

This paper describes an experimentation methodology to measure how demand varies with price and the results of its application at a toy retailer. The same product is assigned different price‐points in different store panels and the resulting sales are used to estimate a demand curve. We use a variant of the k‐median problem to form store panels that control for differences between stores and produce results that are representative of the entire chain. We use the estimated demand curve to find a price that maximizes profit. Our experiment yielded the unexpected result that demand increases with price in some cases. We present likely reasons for this finding from our discussions with retail managers. Our methodology can be used to analyze the effect of several marketing and promotional levers employed in a retail store besides pricing.
Manufacturing Operations Manuscripts Published in the First 52 Issues of POM: Review, Trends, and Opportunities
Authors: Kouvelis Panos , Chambers Chester , Yu Dennis Z.
Published: August 2010

We review the manuscripts accepted for publication by the Manufacturing Operations Department of Production and Operations Management ( POM) over 13 years (1992–2004). The manuscripts managed by this department deal with topics including scheduling, manufacturing systems management, inventory control and capacity management, maintenance management, and teaching and applications. In the process of this review, we highlight the significant contribution of POM to the field of operations management and illustrate how this body of work has served to further the mission of the journal and department. We then offer comments regarding characterizations of these manuscripts and a few ideas on how to expand this body of work in the future to further the mission of the journal.
Sustainable Operations Management
Authors: Kleindorfer Paul R. , Singhal Kalyan , VanWassenhove Luk N.
Published: August 2010

Operations management researchers and practitioners face new challenges in integrating issues of sustainability with their traditional areas of interest. During the past 20 years, there has been growing pressure on businesses to pay more attention to the environmental and resource consequences of the products and services they offer and the processes they deploy. One symptom of this pressure is the movement towards triple bottom line reporting (3BL) concerning the relationship of profit, people, and the planet. The resulting challenges include integrating environmental, health, and safety concerns with green‐product design, lean and green operations, and closed‐loop supply chains. We review these and other “sustainability” themes covered in the first 50 issues of Production and Operations Management and conclude with some thoughts on future research challenges in sustainable operations management.
Closed‐Loop Supply Chains: An Introduction to the Feature Issue (Part 2)
Authors: Guide V. Daniel R. , Wassenhove Luk N. Van
Published: August 2010

Closed‐loop supply chain management is the design, control and operation of a system to maximize value creation over the entire life‐cycle of a product with dynamic recovery of value from different types and volumes of returns over time. The research in this feature issue furthers our understanding of this rich area and serves as a starting point for another round of research which continues to dig deeper still into relevant industry issues.
A Framework to Analyze Cash Supply Chains
Authors: Rajamani Divakar , Geismar H. Neil , Sriskandarajah Chelliah
Published: August 2010

The Federal Reserve System of the United States is making changes to its cash recirculation policy to reduce depository institutions' (banks') overuse of its cash processing services. These changes will affect operating policies and costs at many institutions having large cash businesses and, in turn, impact cash transportation and logistics providers. This study provides the framework to study the cash supply chain structure and analyzes it as a closed‐loop supply chain. Additionally, it describes the cash flow management system used by banks in the U.S.
Elwood Buffa's Pioneering Contributions to Production and Operations Management
Authors: Gupta Sushil , Starr Martin K.
Published: August 2010

Elwood Spencer Buffa, a pioneer in production and operations management (P/OM), passed away in the summer of 2005, leaving his legacy behind. During his academic career Buffa made lasting contributions to teaching and research of P/OM. We review those contributions and their impact on the evolution of the P/OM discipline.
The Impact of Capacity Costs on Product Differentiation in Delivery Time, Delivery Reliability, and Price
Authors: Boyaci Tamer , Ray Saibal
Published: August 2010

We develop an analytical framework for studying the role capacity costs play in shaping the optimal differentiation strategy in terms of prices, delivery times, and delivery reliabilities of a profit‐maximizing firm selling two variants (express and regular) of a product in a capacitated environment. We first investigate three special cases. The first is an existing model of price and delivery time differentiation with exogenous reliabilities, which we only review. The second focuses on time‐based (i.e., length and reliability) differentiation with exogenous prices. The third deals with deciding on all features for an express variant when a regular product already exists in the marketplace. We subsequently address the integrative framework of time‐ and‐price‐based differentiation for both products in a numerical study. Our results shed light on the role that customer preferences towards delivery times, reliabilities and prices, and the capacity costs (absolute and relative) have on the firm's optimal product positioning policy.
Elaborating the Contingency Theory of Organizations: The Case of Manufacturing Flexibility Strategies
Authors: Ketokivi Mikko
Published: August 2010

What determines which manufacturing flexibility strategies are feasible and which are not? In this paper, I build both theoretical and empirical understanding of task‐environmental contingencies that may either enable or constrain the selection of various flexibility strategies. The special emphasis is on the various plant‐level actions that are used to seek manufacturing flexibility. Demand uncertainty and variability, technology, and competitive strategy emerge as the most important contingencies, although not in ways that are immediately apparent. Finally, managerial implications at both the corporate as well as manufacturing unit levels are discussed.
Stochastic Optimal Control for Staffing and Backlog Policies in a Two‐Stage Customized Service Supply Chain
Authors: Anderson Edward G. , Morrice Douglas J. , Lundeen Gary
Published: August 2010

Motivated by an oilfield services industry case study, we investigate the dynamic behavior of customized service supply chains by developing a two‐stage serial staffing model. Each stage holds no finished goods inventory, but rather only backlogs that can be managed by adjusting staffing levels. We develop optimal control policies to balance backlog costs against hiring and firing personnel costs'assuming shared backlog information—under both centralized and decentralized control. We examine when there is sufficient economic incentive for two completely decentralized stages to begin: (1) to share backlog information without centralizing control, or (2) to completely centralize control. These switching points are determined by the relative service and personnel costs of the two stages. From these results, we show that decentralizing control in many cases does not materially worsen performance, so long as information is shared. Moreover, in some cases, even sharing information is of only marginal benefit.
Heuristic Coordination of Decentralized Inventory Systems Using Induced Backorder Costs
Authors: Berling Peter , Marklund Johan
Published: August 2010

In this paper, we investigate a one‐warehouse multiple‐retailer system, where the inventory control decisions are coordinated using a near optimal induced backorder cost, β*. All installations use continuous review installation‐stock ( R, Q) policies. The analysis builds on an approximation model where the stochastic warehouse delays are replaced by their correct averages. The contributions include insights as to how β* is influenced by system parameters, and the determination of simple closed form β* estimates. The latter offering a practical means to achieve coordinated control of large size systems.
The Effect of Competition on Recovery Strategies
Authors: Ferguson Mark E. , Toktay L. Beril
Published: August 2010

Manufacturers often face a choice of whether to recover the value in their end‐of‐life products through remanufacturing. In many cases, firms choose not to remanufacture, as they are (rightly) concerned that the remanufactured product will cannibalize sales of the higher‐margin new product. However, such a strategy may backfire for manufacturers operating in industries where their end‐of‐life products (cell phones, tires, computers, automotive parts, etc.) are attractive to third‐party remanufacturers, who may seriously cannibalize sales of the original manufacturer. In this paper, we develop models to support a manufacturer's recovery strategy in the face of a competitive threat on the remanufactured product market. We first analyze the competition between new and remanufactured products produced by a monopolist manufacturer and identify conditions under which the firm would choose not to remanufacture its products. We then characterize the potential profit loss due to external remanufacturing competition and analyze two entry‐deterrent strategies: remanufacturing and preemptive collection. We find that a firm may choose to remanufacture or preemptively collect its used products to deter entry, even when the firm would not have chosen to do so under a pure monopoly environment. Finally, we discuss conditions under which each strategy is more beneficial.
Optimal Order Quantities with Remanufacturing Across New Product Generations
Authors: Bhattacharya Shantanu , Guide V. Daniel R. , VanWassenhove Luk N.
Published: August 2010

We address the problem of determining the optimal retailer order quantities from a manufacturer who makes new products in conjunction with ordering remanufactured products from a remanufacturer using used and unsold products from the previous product generation. Specifically, we determine the optimal order quantity by the retailer for four systems of decision‐making: (a) the three firms make their decisions in a coordinated fashion, (b) the retailer acts independently while the manufacturer and remanufacturer coordinate their decisions, (c) the remanufacturer acts independently while the retailer and manufacturer coordinate their decisions, and (d) all three firms act independently. We model the four options described above as centralized or decentralized decision‐making systems with the manufacturer being the Stackelberg leader and provide insights into the optimal order quantities. Coordination mechanisms are then provided which enable the different players to achieve jointly the equivalent profits in a coordinated channel.
Unlocking the Value of RFID
Authors: Lee Hau , Özer Özalp
Published: August 2010

RFID (Radio‐Frequency Identification) technology has shown itself to be a promising technology to track movements of goods in a supply chain. As such, it can give unprecedented visibility to the supply chain. Such visibility can save labor cost, improve supply chain coordination, reduce inventory and increase product availability. Industry reports and white papers are now filled with estimates and proclamations of the benefits and quantified values of RFID. Early adopters are now rallying more and more followers. However, most such claims are educated guesses at best and are not substantiated, that is, they are not based on detailed, model‐based analysis. This paper argues that there is a huge credibility gap of the value of RFID, and that a void exists in showing how the proclaimed values are arrived at, and how those values can be realized. The paper shows that this credibility gap must be filled with solid model analysis, and therefore presents a great opportunity for the Production and Operations Management (POM) research community. The paper reviews some of the ongoing research efforts that attempt to close the credibility gap, and suggests additional directions for further strengthening the POM's contribution to help industry realize the full potentials of RFID.
Optimal Ordering Policies for Inventory Problems With Dynamic Information Delays
Authors: Bensoussan Alain , Çakanyildirim Metin , Sethi Suresh P.
Published: August 2010

Information delays exist when the most recent inventory information available to the Inventory Manager (IM) is dated. In other words, the IM observes only the inventory level that belongs to an earlier period. Such situations are not uncommon, and they arise when it takes a while to process the demand data and pass the results to the IM. We introduce dynamic information delays as a Markov process into the standard multiperiod stochastic inventory problem with backorders. We develop the concept of a reference inventory position. We show that this position along with the magnitude of the latest observed delay and the age of this observation are sufficient statistics for finding the optimal order quantities. Furthermore, we establish that the optimal ordering policy is of state‐dependent base‐stock type with respect to the reference inventory position (or state‐dependent ( s, S) type if there is a fixed ordering cost). The optimal base stock and ( s, S) levels depend on the magnitude of the latest observed delay and the age of this observation. Finally, we study the sensitivity of the optimal base stock and the optimal cost with respect to the sufficient statistics.
A Periodic Inventory Model for Stocking Modular Components
Authors: Thomas Douglas J. , Warsing Donald P.
Published: August 2010

We study the benefit obtained by exploiting modular product design in fulfilling exogenous demand for both a complete assembly and its components in a service parts inventory system. Our goal is to reduce overall service system costs by allowing assembly and/or disassembly (A/D) to occur at some unit cost per A/D action. In an extensive set of computational experiments, we compare a naïve stocking and operating policy that treats all items independently and ignores the modular product structure and related A/D capability to the optimal base stock policy, and to a policy that allows A/D from the naïve stocking levels. While extensive computational analysis shows that the optimal base stock policy improves the system cost between 3 to 26% over the naïve approach, simply allowing A/D from the naïve stocking levels captures a significant portion (an average of 67%) of the naïve–optimal gap. Our computational results demonstrate that the optimization shifts the component‐assembly mix from the naïve levels and that limiting A/D capacity affects this mix. Limiting A/D capacity can actually increase the expected number of A/D actions (versus the uncapacitated case), since the optimization shifts stocking levels to reduce the probability that “too many” actions will be required.
A Single‐Period Assortment Optimization Model
Authors: Li Zhaolin
Published: August 2010

This paper studies a single‐period assortment optimization problem with unequal cost parameters. The consumer choice process is characterized by a Multinomial Logit (MNL) model. When the store traffic is a continuous random variable, we explicitly derive the structure of the optimal assortment. Our approach is to use a comprehensive measure–profit rate to evaluate the profitability of each variant and then determine which product should be offered. We demonstrate that the optimal assortment contains the few items that have the highest profit rate. When the store traffic is discrete, the optimal solution is difficult to obtain. We propose a “profit rate” heuristic, which is inspired by the result for the case of continuous store traffic. In a special case with equal cost parameters and normal demand distribution, the profit rate heuristic is indeed optimal. Using randomly generated data, we test the effectiveness of the heuristic and find that the average percentage error is less than 0.1% and that the hit rate is above 90%. Our research provides managerial insights on assortment planning and accentuates the importance of measuring the profitability of each product when the demand is random and cannibalization among different products exists.
On E‐Auctions for Procurement Operations
Authors: Rothkopf Michael H. , Whinston Andrew B.
Published: August 2010

Electronic auctions have revolutionized procurement in the last decade. In many situations, they have replaced negotiations for supplier selection and price setting. While they have often greatly reduced transaction costs and increased competition, they have also encountered problems and resistance from suppliers resenting their intrusion on cooperative supplier/buyer relationships. In response to these issues, procurement auctions have evolved in radical new directions. Buyers use business rules to limit adverse changes. Some procurement auctions allow bidders to offer variants in the specifications of products to be supplied. Most important, some suppliers are allowing bidders to bid on packages of items, not just individual items. This tends to change procurement auctions from zero‐sum fights over supplier profit margins to win‐win searches for synergies.

These changes have opened up many new research areas. Researchers are trying to improve how to deal with the computational issues involved in package auctions and to analyze the new auctions forms that are evolving. In general, equilibrium incentives are not known, and dealing with ties in package auctions is an issue. Computer scientists are analyzing the use of computerized bidding agents. Mechanisms that combine auctions with fixed buy prices or with negotiations need to be analyzed.
Games and Mechanism Design in Machine Scheduling—An Introduction
Authors: Heydenreich Birgit , Müller Rudolf , Uetz Marc
Published: August 2010

We survey different models, techniques, and some recent results to tackle machine scheduling problems within a distributed setting. In traditional optimization, a central authority is asked to solve a (computationally hard) optimization problem. In contrast, in distributed settings there are several agents, possibly equipped with private information that is not publicly known, and these agents must interact to derive a solution to the problem. Usually the agents have their individual preferences, which induces them to behave strategically to manipulate the resulting solution. Nevertheless, one is often interested in the global performance of such systems. The analysis of such distributed settings requires techniques from classical optimization, game theory, and economic theory. The paper therefore briefly introduces the most important of the underlying concepts and gives a selection of typical research questions and recent results, focusing on applications to machine scheduling problems. This includes the study of the so‐called price of anarchy for settings where the agents do not possess private information, as well as the design and analysis of (truthful) mechanisms in settings where the agents do possess private information.
Do Auction Parameters Affect Buyer Surplus in E‐Auctions for Procurement?
Authors: Mithas Sunil , Jones Joni L.
Published: August 2010

Although the initial euphoria about Internet‐enabled reverse auctions has given way to a cautious but widespread use of reverse auctions in business‐to‐business (B2B) procurement, there is a limited understanding of the effect of auction design parameters on buyer surplus. In this paper, we study the effect of bidding competition, information asymmetry, reserve price, bid decrement, auction duration, and bidder type on buyer surplus. We collected field data on more than 700 online procurement auctions conducted by a leading auctioneer and involving procurement items worth millions of dollars. Consistent with the predictions of auction theory, the results indicate that bidding competition, reserve price, and information sharing affect buyer surplus. Unlike previous findings in the consumer‐to‐consumer context, we find that bid decrement and auction duration have no effect in B2B procurement auctions. Our results suggest that use of the rank‐bidding format increases buyer surplus when incumbent suppliers participate in the auction. We discuss the theoretical and managerial implications of these findings for future research and for optimal design of online procurement auctions.
Market‐Based Allocation with Indivisible Bids
Authors: Schvartzman L. Julian , Wellman Michael P.
Published: August 2010

We study multiunit double auctions accepting bids with indivisibility constraints. Modeling the auction problem as a Multiple Choice Knapsack Problem and using dynamic programming, we show that incremental computations during bid processing can speed the handling of key auction operations such as clearing and quoting. We propose different price‐quote policies and study their influence on the efficiency of market‐based allocation. Using a reconfigurable manufacturing scenario where agents trade large quantities of multiple goods, we demonstrate potential benefits of supporting indivisibility constraints in bidding. These benefits are highly sensitive to the form of price quote provided, indicating interesting tradeoffs in communication and allocation efficiency.
Radiofrequency Identification Applications in Private and Public Sector Operations: Introduction to the Special Issue
Authors: Dutta Amitava , Whang Seungjin
Published: August 2010

This special issue of the Production and Operations Management journal offers a sample of ongoing research arising from the deployment of radiofrequency identification technology in organizational operations. The articles were selected to cover a spectrum of application areas and methodologies. There is also an attempt to identify interesting open areas for further investigation.
Development of an RFID‐based Traceability System: Experiences and Lessons Learned from an Aircraft Engineering Company
Authors: Ngai E. W. T. , Cheng T. C. E. , Lai Kee‐hung , Chai P. Y. F. , Choi Y. S. , Sin R. K. Y.
Published: August 2010

This paper presents a case study of the research and development of an RFID‐based traceability system in an aircraft engineering company in Hong Kong. We report the system design and implementation, and discuss our experiences and lessons learned. The aim of the RFID system is to effectively support the tracking and tracing of aeroplane repairable items in the company. The study reveals eight critical success factors for the successful implementation of RFID systems, namely, create strong internal and external motivation for improvement, stir up desire to keep abreast of the latest technology for global competitiveness, strive for cross organizational implementation, avoid major process changes/limit process changes, start with a small RFID project scope, facilitate equipment vendor's investment, use cost‐effectiveness reusable tags, and transfer RFID skills and knowledge from university to industry. We also summarize 13 lessons learned, including three lessons concerning RFID implementation at strategic level, six lessons at management level, and four lessons at operational level resulting from carrying out this project. Given the contextual details of the study, the lessons learned can help other firms to better anticipate the hurdles they will experience, and make them aware of the possible ways to cope with such difficulties before embarking on the journey of RFID implementation.
Simulation Modeling and Analysis: A Collateral Application and Exposition of RFID Technology
Authors: Amini Mehdi , Otondo Robert F. , Janz Brian D. , Pitts Mitzi G.
Published: August 2010

RFID technology provides in‐depth, real‐time visibility into the status of assets throughout the supply chain. However, the deployment of RFID technology may have collateral value in the high‐quality data generated by these assets. This study explores the potential value of RFID data for tactical and strategic purposes and the redesign of processes within supply chain through the deployment of simulation modeling and analysis. We present a simulation study conducted at a regional hospital for which data related to trauma patient movement was collected with an RFID‐based system. We find that not only does this data serve as the basis for successful simulation modeling, but that RFID technology may address several data‐related challenges previously identified in the simulation literature.
A Field Study of RFID Deployment and Return Expectations
Authors: Whitaker Jonathan , Mithas Sunil , Krishnan M. S.
Published: August 2010

Radio Frequency Identification (RFID) technology promises to transform supply chain management. Building on previous research in information systems and supply chain management, this paper proposes a theoretical framework for RFID adoption and benefits, and tests the framework using data on u. s. firms. Our analysis suggests that there is a positive association between information technology (IT) application deployment and RFID adoption. We find that RFID implementation spending and partner mandate are associated with an expectation of early return on RFID investment, and a perceived lack of industry‐wide standards is associated with an expectation of delayed return on RFID investment. These results suggest that firms with broad IT application deployment and a critical mass of RFID implementation spending are more likely to report early returns from RFID deployments. This paper extends previous research to understand the relationship between organization characteristics and adoption and expected benefits of the emerging RFID technology.
Managing the Reverse Channel with RFID‐Enabled Negative Demand Information
Authors: Karaer Özgen , Lee Hau L.
Published: August 2010

We analyze the inventory decisions of a manufacturer who has ample production capacity and also uses returned products to satisfy customer demand. All returned items go through an evaluation process, at the end of which the decision of disposal, direct reselling, or rework is made for each unit according to a predetermined procedure. We quantify the value of information/visibility on the reverse channel for the manufacturer by making comparisons among three approaches: No information‐naive; no visibility‐enlightened; and full visibility. We find the value of visibility increases with the comparative length of the reverse channel and volume, volatility, and usability of returns. Furthermore, the smarter the manufacturer, the less benefit visibility brings to the system. By this analysis, we quantify the visibility savings of radio frequency identification (RFID) in the reverse channel as a candidate enabler technology. We also provide numerical examples to show that practical approximations in inventory management may have acceptable penalties to the manufacturer with visibility.
Surgical Suites' Operations Management
Authors: Gupta Diwakar
Published: August 2010

Surgical suites are a key driver of a hospital's costs, revenues, and utilization of postoperative resources such as beds. This article describes some commonly occurring operations management problems faced by the managers of surgical suites. For three of these problems, the article also provides preliminary models and possible solution approaches. Its goal is to identify open challenges to spur further research by the operations management community on an important class of problems that have not received adequate attention in the literature, despite their economic importance.
The Impact of Environmental Degradation on Grain Production in China, 1975–1990*
Authors: Rozelle Scott , Veeck Gregory , Huang Jikun
Published: August 2010

Abstract: The sluggish rate of growth for China's grain production during the past decade is a major concern for agricultural planners. At the national level, the average rate of production fell to 1.8 percent per year from 1985 to 1990, after an average growth rate of 4.7 percent per year from 1978 to 1984. Supplies and application rates of critical farm inputs during 1985 to 1990 reached record levels, but had a disappointing effect on both yields and gross production. We hypothesize that environmental degradation has had a major effect on grain production in many of China's agricultural areas. In this article, we introduce a nationwide fixed effect grain‐yield function which incorporates both traditional input variables and an additional set of variables that reflect trends in environmental degradation at the provincial level. The model is estimated using time‐series data for the period from 1978 to 1990. The analysis suggests that environmental degradation may have cost China as much as 5.7 million metric tons of grain per year in the late 1980s. Results also indicate that the projected losses due to environmental stress are not evenly distributed throughout China, but that regions which brought considerable amounts of marginal land into cultivation during the earliest years of the reform period now face the greatest problems. Xinjiang and Gansu in the Northwest, the Loess Plateau provinces, and Yunnan and Guizhou AR in the Southwest reported stagnant production despite significant increases in technical inputs. We conclude that this stagnation should be credited to the increasing degradation of agricultural land in these areas.