How Plant Managers' Experiences and Attitudes Toward Sustainability Relate to Operational Performance

Managers are increasingly faced with pressure to think not just about profits, but also about their organization's environmental and social performance. This research provides a first examination of operational managers' experiences with and attitudes about employee well‐being and environmental issues, how these factors impact employee well‐being and environmental performance, and how the three performance measures interrelate. We use violations of Occupational Safety and Health Administration regulations and Toxic Release Inventory reports of emissions as proxies for employee well‐being and environmental performance. Our findings suggest that operational managers do not (yet) think in sustainability terms. However, employee well‐being and environmental performance do interact in a significant way with operational performance. Hence, operational managers would benefit from a more complete understanding of the relationships among the elements of the triple bottom line.     

Revenue Management vs. Newsvendor Decisions: Does Behavioral Response Mirror Normative Equivalence?

We study and compare decision‐making behavior under the newsvendor and the two‐class revenue management models, in an experimental setting. We observe that, under both problems, decision makers deviate significantly from normative benchmarks. Furthermore, revenue management decisions are consistently higher compared to the newsvendor order quantities. In the face of increasing demand variability, revenue managers increase allocations; this behavior is consistent with normative patterns when the ratio of the selling prices of the two customer segments is less than 1/2, but is its exact opposite when this ratio is greater than 1/2. Newsvendors' behavior with respect to changing demand variability, on the other hand, is consistent with normative trends. We also observe that losses due to leftovers weigh more in newsvendor decisions compared to the revenue management model; we argue that overage cost is more salient in the newsvendor problem because it is perceived as a direct loss, and propose this as the driver of the differences in behavior observed under the two problems.     

Repurposing Materials and Waste through Online Exchanges: Overcoming the Last Hurdle

Online material and waste exchanges (OMWEs) provide online channels to repurpose by‐products, unused materials and waste from industrial and commercial facilities. Unfortunately, OMWE's also have challenges. First, sellers may have access to other disposal options and, as a result, may not fully commit to the exchange. Second, buyers can face high uncertainty about the product exchanged and the transaction being undertaken. Overcoming these challenges is the “last hurdle” to making OMWEs successful. This study investigates the factors that reduce the buyers' uncertainty and increase the sellers' commitment to the OMWE. We analyze novel transaction‐level data from an online exchange (MNExchange.org) combined with other archival public records on county‐level repurposing and disposal statistics. First, we find that regional repurposing policies and alternatives have a complementary effect on sellers' commitment toward OMWEs, resulting in increased OMWE exchanges. However, regional disposal policies and alternatives have a substitution effect on sellers' commitment, resulting in reduced exchange success. Further, greater product and transaction information reduce the buyer's uncertainty and increase exchange success. Finally, the analysis shows that users' (buyers and sellers) heavily rely on their prior experience with OMWEs. Specifically, higher familiarity between the buyer–seller pair and familiarity with the OMWE system leads to higher likelihood of exchange success. This study lays the foundation for understanding OMWEs and has important implications for developing policies and operations to increase online transactions of by‐products, materials and wastes.     

How to Compete Against a Behavioral Newsvendor

We investigate newsvendor ordering behavior under competition. We present a laboratory experiment that documents the behavioral ordering regularities in competitive newsvendor environments, and an analytical model extending the standard theory of newsvendor competition by including an optimal best‐response policy for competing with a behaviorally biased newsvendor. We test the effectiveness of this policy using an out‐of‐sample experiment and find that it results in improved market share, service level and profitability.     

Bounding Optimal Expected Revenues for Assortment Optimization under Mixtures of Multinomial Logits

We consider assortment problems under a mixture of multinomial logit models. There is a fixed revenue associated with each product. There are multiple customer types. Customers of different types choose according to different multinomial logit models whose parameters depend on the type of the customer. The goal is to find a set of products to offer so as to maximize the expected revenue obtained over all customer types. This assortment problem under the multinomial logit model with multiple customer types is NP‐complete. Although there are heuristics to find good assortments, it is difficult to verify the optimality gap of the heuristics. In this study, motivated by the difficulty of finding optimal solutions and verifying the optimality gap of heuristics, we develop an approach to construct an upper bound on the optimal expected revenue. Our approach can quickly provide upper bounds and these upper bounds can be quite tight. In our computational experiments, over a large set of randomly generated problem instances, the upper bounds provided by our approach deviate from the optimal expected revenues by 0.15% on average and by less than one percent in the worst case. By using our upper bounds, we are able to verify the optimality gaps of a greedy heuristic accurately, even when optimal solutions are not available.     

Strategic Design Responsiveness: An Empirical Analysis of US Retail Store Networks

This study uses a service operations management (SOM) strategy lens to investigate chain store retailers' strategic design responsiveness (SDR)—a term that captures the degree to which retailers dynamically coordinate investments in human and structural capital with the complexity of their service and product offerings. Labor force and physical capital are respectively used as proxies for investments in human capital and structural capital, whereas gross margins are proxies for product/service offering complexity. Consequently, SDR broadly reflects three salient complementary choices of SOM design strategy. We test the effects of “brick and mortar” chain store retailers' SDR on current and future firm performance using publically available panel data collected from Compustat and the University of Michigan American Customer Satisfaction Index databases for the period 1996–2011. We find that retailers that fail to keep pace with investments in both structural and human capital exhibit short‐term financial benefits, but have worse ongoing operational performance. These findings corroborate the importance of managers strategically maintaining the complementarity of design‐related choices for improving and maintaining business performance.     

管理科学与工程理论与方法突破若干重点前沿领域

管理科学与工程学科“十四五”战略规划课题组在国家自然科学基金委管理科学部的指导和资助下,通过调研和多轮专家评审归纳总结出“十四五”期间管理科学与工程学科层面的重点前沿领域。本文从运筹学和商务数据两个层面,汇报了亟需取得理论与方法突破的若干重点前沿领域。     

Pool‐Point Distribution of Zero‐Inventory Products

We study zero‐inventory production‐distribution systems under pool‐point delivery. The zero‐inventory production and distribution paradigm is supported in a variety of industries in which a product cannot be inventoried because of its short shelf life. The advantages of pool‐point (or hub‐and‐spoke) distribution, explored extensively in the literature, include the efficient use of transportation resources and effective day‐to‐day management of operations. The setting of our analysis is as follows: A production facility (plant) with a finite production rate distributes its single product, which cannot be inventoried, to several pool points. Each pool point may require multiple truckloads to satisfy its customers' demand. A third‐party logistics provider then transports the product to individual customers surrounding each pool point. The production rate can be increased up to a certain limit by incurring additional cost. The delivery of the product is done by identical trucks, each having limited capacity and non‐negligible traveling time between the plant and the pool points. Our objective is to coordinate the production and transportation operations so that the total cost of production and distribution is minimized, while respecting the product lifetime and the delivery capacity constraints. This study attempts to develop intuition into zero‐inventory production‐distribution systems under pool‐point delivery by considering several variants of the above setting. These include multiple trucks, a modifiable production rate, and alternative objectives. Using a combination of theoretical analysis and computational experiments, we gain insights into optimizing the total cost of a production‐delivery plan by understanding the trade‐off between production and transportation.     

Performance Effects Related to the Sequence of Integration of Healthcare Technologies

There is a natural order to most events in life: Everything from learning to read to DNA sequences in molecular biology follows some predetermined, structured methodology that has been refined to yield improved results. Likewise, it would seem that firms could benefit by adopting and implementing technologies in some logical way so as to increase their overall performance. In this study of 555 hospitals, we investigate the order in which medical technologies are transformed into information technologies through a process of converting them from stand‐alone technologies to interoperable, integrated information systems and whether certain configurations of sequences of integration yield additional value. We find that sequence does matter and that hospitals that integrated foundational technologies first—which in this case are known to be more complex—tend to perform better. Theoretical and practical implications of this finding and others are discussed.     

Cost Allocation in Manufacturing–Remanufacturing Operations

For firms remanufacturing their products, the total life‐cycle costs and revenues from new and remanufactured products determine their profitability. In many firms, manufacturing/sales and remanufacturing/remarketing operations are carried out in different divisions. Each division is responsible for only part of the product's life cycle. Practices regarding transfer pricing across divisions vary significantly among companies, affecting the life‐cycle profit performance of the product. In this research, we identify characteristics of transfer prices that achieve the firm‐wide optimal solution. To this end, we consider a manufacturer who also undertakes remanufacturing operations and we focus on price (quantity) decisions. We determine that a cost allocation mechanism that allocates a portion of the initial production cost to each of the two stages of the product life cycle should be used. We also conclude that cost allocation should be implemented as a fixed cost allocation, where charges to the remanufacturing division should be determined independently of the actual quantity of units remanufactured.