Traditional stochastic inventory models assume full knowledge of the demand probability distribution. However, in practice, it is often difficult to completely characterize distribution, especially fast-changing markets. In this paper, we study newsvendor problem with partial information about distribution (e.g., mean, variance, symmetry, unimodality). particular, derive order quantities that minimize newsvendor's maximum regret not acting optimally. Most our solutions are tractable, which...

In this paper, we analyze the contracting issues that arise in collaborative services, such as consulting, financial planning, and information technology outsourcing. particular, investigate how choice of contract type—among fixed-fee, time-and-materials, performance-based contracts—is driven by service environment characteristics. We find fixed-fee contracts contingent on performance are preferred when output is more sensitive to vendor's effort, time-and-materials optimal buyer's dominate...

In this paper, we quantify the efficiency of decentralized supply chains that use price-only contracts. With a contract, buyer and seller agree only on constant transaction price, without specifying amount will be transferred. It is well known these contracts do not provide incentives to parties coordinate their inventory/capacity decisions. We measure with price anarchy (PoA), defined as largest ratio profits between integrated chain (that is, fully coordinated) chain. characterize various...

In this paper, we study how social planners should exploit comparisons to pursue their objectives. We consider two modes of comparison, referred as behind-averse and ahead-seeking behaviors, depending on whether individuals experience a utility loss from underperforming or gain overperforming relative peers. Modeling comparison game between players, find that behavior leads output polarization, whereas clustering. A planner can mitigate these effects in ways: (i) by providing the full...

In services, customers provide significant inputs into the production process. particular, these may be themselves participating in service delivery. Although many firms have explored different ways of involving their process, there is no clear guideline for design such coproductive systems. this paper, we develop an analytical model joint between a provider and customer characterize how firm should its system. We show that, as task becomes more standard, it desirable to decrease degree...

For many consumer-intensive (i.e., business-to-consumer) services, delivering memorable customer experiences is a source of competitive advantage. Yet there are few guidelines available for designing service encounters with focus on satisfaction. In this paper, we show how experiential services should be sequenced and timed to maximize the satisfaction customers who subject memory decay acclimation. We find that favors positioning highest level near end, whereas acclimation maximizing...

Revenue management models traditionally assume that future demand is unknown but can be described by a stochastic process or probability distribution. Demand is, however, often difficult to characterize, especially in new nonstationary markets. In this paper, we develop robust formulations for the capacity allocation problem revenue using maximin and minimax regret criteria under general polyhedral uncertainty sets. Our approach encompasses following open-loop controls: partitioned booking...

In recent years, the competition for shelf space has intensified, as more products now compete a retail that remained roughly constant. this paper, we analyze dynamics of in multi‐supplier point. Assuming sales are dependent, consider retailer optimizes its allocation among different based on their level and profit margins. context, product manufacturers set wholesale prices so to obtain larger allocations but at same time keep margins high possible. We equilibrium situation supply chain,...

In some strategic alliances, a firm shares its manufacturing capacity with another, and the latter distribution former. Even though such bidirectional alliances have become more common, they remain challenging to manage because of frequent disputes over allocation, especially when demand is uncertain. this paper, we investigate whether there exists contractual mechanism that can mitigate extent these while improving profits all participating firms. We consider two types contracts, namely, ex...

Many knowledge‐intensive projects such as new product and software design, research, high technology development have flexible scope involve co‐production between a client vendor. In projects, it is often challenging to estimate how much progress can be achieved within certain time window or may needed achieve degree of progress, especially because the vendor adjust their efforts function project's until deadline, incentives in place. Effective contracts should therefore foster...

In knowledge-intensive projects, one of the challenges project team leaders often face is how to combine their roles direction and contribution. this paper, we propose a game-theoretic model leadership coproductive projects study should directing contributing efforts depending on characteristics. Our analysis reveals that two types approaches arise in equilibrium, namely, “participatory” leadership, under which leader gives members full discretion choice effort, “directive” demands exert...

Strategic Behavior in Queues

As the nature of work has become more service oriented, knowledge intensive, and rapidly changing, people—be they workers or customers—have central to operational processes have impacted outcomes in novel perhaps fundamental ways. Research people-centric operations (PCO) studies how people affect performance processes. In this OM Forum, we define PCO as an area study, offer a categorization scheme take stock where field allocated its attention date, our thoughts on promising directions for...

Although services are often defined as co-productive of value, the concept value is difficult to measure. Yet measuring not necessarily a prerequisite for service process improvement. In this paper, we propose general framework modeling and analysis with co-production. The identifies three major stages: (i) production stage, which involves co-production, (ii) output sharing (iii) consumption stage. Value realization distribution depends on all stages. Using our framework, argue that...

Problem definition: Contrary to traditional queueing theory, recent field studies in B2C services indicate that pooled queues may be less efficient than dedicated queues. Methodology/results: We use two online experiments the healthcare delivery context replicate this finding and assess interplay of servers’ customer ownership queue length awareness as potential underlying mechanisms. operationalize extent which servers feel toward their customers are able accurately quantify number...

For many entrepreneurs, time is a key constraint. They need to invest achieve growth, but also lose because of recurring crises. We develop simple stochastic dynamic program model how an entrepreneur should prioritize between improving processes reduce crises versus harvesting revenue or ensuring future growth. show that it initially optimal process improvement: strive for high quality early in the venture’s growth process. numerically analyze heuristic derived from this policy and identify...

In urban transportation planning, it has become critical (1) to determine the travel time of a traveler and how is affected by congestion, (2) understand traffic distributes in network. first part this paper, we derive an analytical function time, based on theory kinematic waves. This travel-time integrates dynamics as well effects shocks. Numerical examples demonstrate quality function, comparison with simulated times. second incorporate model within dynamic user equilibrium (DUE) setting....

Revenue management models traditionally assume that future demand is unknown but can be described by a stochastic process or probability distribution. Demand is, however, often difficult to characterize, especially in new nonstationary markets. In this paper, we develop robust formulations for the capacity allocation problem revenue using maximin and minimax regret criteria under general polyhedral uncertainty sets. Our approach encompasses following open-loop controls: partitioned booking...

For many early-stage entrepreneurs, hiring the first employee is a critical step in firm’s growth. Doing so often requires significant time and monetary investments. To understand trade-offs involved deciding when to hire how differs entrepreneurial settings from more established firm settings, we present simple growth model that depends on two inputs for revenue generation: entrepreneur’s money. We show without hiring, eventually becomes valuable than money contributing In context, value of...

Despite their idiosyncrasies, motor and cognitive learning endurance sports training have in common that they involve repeated practice. While considerable research has been devoted to the effect of practice on performance, little is known about optimal strategies. In this paper, we model process for both skill acquisition retention, optimize its profile maximize performance a predefined date. For acquisition, find involves multiple phases increase decrease, yielding U-shaped effort...

Workers in knowledge-intensive industries often complain of having too many meetings, but organizations still give little thought to deciding when or how meet. We investigate the efficiency and robustness various coordination scheduling rules. consider workers who are engaged a common activity (e.g., software programming) that can be divided into largely independent, parallel production tasks, necessitates periodic coordination. Coordination enables address issues they have encountered their...