Technical Sessions – Monday July 11

FA-05 IFORS 2011 - Melbourne
2 - The Newsvendor Problem with Advertising Revenue
Wanshan Zhu, Singapore Management University, 50 Stamford
#0401, 178899, Singapore, adamzhu@smu.edu.sg
We study a modified newsvendor model in which the newsvendor obtains a
revenue from the sales to end users as well as from an advertiser paying to
obtain access to those end users. We study the optimal decisions for both a
price-taking and a price-setting newsvendor when the advertiser has private information
about its willingness to pay for advertisements. We find that the
newsvendor’s optimal policy excludes advertisers with low willingness to pay
and distorts the price and quantity from their system-efficient level to screen
the advertiser.
3 - Comparing Contract Performance through Experiments
in Dual Channel Management
Murat Kaya, Faculty of Engineering and Natural Sciences,
Sabanci University, Sabancı Universitesi, MDBF Orhanli Tuzla,
94305, Istanbul, Turkey, mkaya@sabanciuniv.edu, Aysegul
Tizer, Sevilay Gokduman
We conduct an experimental study with human decision makers on dual sales
channel contracting. We aim to determine dual channel strategies for a manufacturer
who sells its product through both its totally-owned direct online channel
and an independent retailer channel. The two channels compete in service.
We study the theoretical and experimental performance of the wholesale price
and buyback contracts between the firms. Experimental data exhibits deviations
from theoretical predictions that can be attributed to behavioral factors,
such as risk aversion.
4 - Departure Process Variability of Queues and Networks
Yoni Nazarathy, Mathematics, Swinburne University of
Technology, John Street Hawthorn, Mail H38, PO Box 218,
3122, Hawthorn, VIC, Australia,
YNAZARATHY@groupwise.swin.edu.au
Supply Chains may sometimes be roughly modelled as queuing networks
where a key performance measure is the throughput and a secondary key measure
is variability. It often occurs that the variance of the number of items
departing grows linearly with time. In this case, a natural quantity of interest is
the asymptotic variance rate: the asymptotic slope of the variance of the number
of departures. We have discovered a remarkable phenomenon: When the
service and arrival rate are equated, the asymptotic variance rate is reduced.
The impact of this on supply chains remains to be explored.
� FA-05
Friday, 9:00-10:30
Meeting Room 104
Consumer Behavior and Inventory Model
Stream: Marketing and OM Interface
Invited session
Chair: Felix Papier, Operations Management Department, ESSEC
Business School, Av. Bernard Hirsch, BP 50105, 95021,
Cergy-Pontoise Cedex, France, papier@essec.fr
1 - An Integrated Inventory Model with Price Dependent
Demand Rate under Two Levels of Storage
Shiv Raj Singh, Mathematics, D. N.(PG) College, Railway Road,
250001, Meerut, Uttar Pradesh, India, shivrajpundir@yahoo.com
a two-warehouse integrated production-inventory model from the perspectives
of both the manufacturer and the retailer with price dependent consumption
rate. The manufacturer’s stores goods in OW before RW, but clears the stocks
in RW before OW. The model considered both ameliorating and deteriorating
effects taking account of multiple deliveries, partial backordering and time
discounting. Numerical experiment and the sensitivity analysis are given to
illustrate the theory of the model.
2 - Customer Lifetime Value Measurement for an Online
Grocery Retailer
108
Evsen Korkmaz, Rotterdam School of Management, Erasmus
University, Burgemeester Oudlaan 50, 3062 PA, Rotterdam,
Netherlands, ekorkmaz@rsm.nl, Roelof Kuik
Because of limited delivery-service capacity of online retailers, it is important
for them to know how much revenue they can expect from each customer
in order to prioritize and retain the most valuable ones. In this paper we focus
on measuring the value of each customer in a non-contractual setting of a
Dutch online grocery retailer. We extend the Pareto/NBD model of Schmittlein
et al. (1987) by using a hierarchical Bayesian framework. We explain the
heterogeneity on purchase and death process parameters among customers by
industry-specific covariates (e.g. basket mix, missing item rate).
3 - ERP as a Tool for Sustainable Logistics Management
Andrejs Tambovcevs, Riga Technical University, Riga, Latvia,
ata2000@inbox.lv
In recent years, consumers and governments have been pressing companies to
reduce the environmental impact of their activities. This study aim is to investigate
the most important tools and concepts of ERP systems that help in supply
chain information sharing, cooperation and cost optimization to reduce the environmental
impact of firm’s activity. Study summarizes the results of analysis
based on literature review and case study. These results can be used to measure
the potential monetary value of such issues, and to minimize logistic system
influence on environmental performance.
4 - Advance Demand Information in Multi-Location Inventory
Allocation Settings
Felix Papier, Operations Management Department, ESSEC
Business School, Av. Bernard Hirsch, BP 50105, 95021,
Cergy-Pontoise Cedex, France, papier@essec.fr
We develop a multi-location newsvendor model in which supply is allocated before
demand realization and in which the decision maker can acquire advance
demand information (ADI). Our model is motivated by the inventory allocation
problem of a corn seed producer, which needs to allocate its annual supply to
markets which differ in price and selling season begin. The company acquires
imperfect ADI through promotions and pre-reservation tools to improve decision
making. We use dynamic programming to solve the model for revenue
maximization and to study the value of ADI in the different markets.
� FA-06
Friday, 9:00-10:30
Meeting Room 105
Maritime Routing
Stream: Transportation
Invited session
Chair: Bjørn Nygreen, Department of Industrial Economics and
Technology Management, Norwegian University of Science and
Technology, Alfred getz vei 3, NO-7491, Trondheim, Norway,
bjorn.nygreen@iot.ntnu.no
1 - A Heuristic for Maritime Inventory Routing
Oddvar Kloster, SINTEF ICT, Postboks 124 Blindern, 0314,
Oslo, Norway, okl@sintef.no, Truls Flatberg
In maritime inventory routing, a fleet of vessels is employed to transport products
that are produced and consumed in different ports, in order to keep stock
levels in each port legal. In addition, regular bookings/orders may be transported.
We describe construction and optimization heuristics that can solve a
wide range of problem variants, including pure inventory, pure tramp, mixed,
single/ multiple products, tank stowage, tank cleaning, boil-off.
2 - A Stochastic and Dynamic Maritime Pickup and Delivery
Problem
Lars Magnus Hvattum, Dept of Industrial Economics and
Technology Management, Norwegian University of Science and
Technology, Alfred Getz veg 3, Sentralbygg 1, N-7491,
Trondheim, Norway, lars.m.hvattum@iot.ntnu.no, Gregorio
Tirado, Kjetil Fagerholt, Jean-François Cordeau
Recent years have shown that static and deterministic vehicle routing problems
can be solved to near optimality with acceptable computational times using
metaheuristics. However, many real world applications are dynamic and include
stochastic aspects, such as unknown future customer requests. Explicitly
taking into account available stochastic information may yield benefits in these
cases. Here, three different heuristics are considered and evaluated in terms
of their ability to minimize transportation costs in a dynamic and stochastic
maritime planning problem.