Technical Sessions – Monday July 11

In the context of the imminent commercial release of mass-market electric cars,
this research aims at modeling the future demand for the private use of such vehicles.
In that purpose a stated preferences survey was designed to analyze
individuals’ preferences between their current car and an analogous electric
model. An advanced discrete choice model will be estimated to identify sociodemographic
population segments that should be targeted with electric cars.
The impact of latent characteristics, such as individuals’ attitudes towards ecology
or new technologies, will also be investigated.
3 - A Dynamic Discrete Choice Approach for Consistent
Estimation of Route Choice Models
Emma Frejinger, KTH, Stockholm, Sweden,
emma.frejinger@abe.kth.se, Mogens Fosgerau, Anders
Karlstrom
We propose a dynamic discrete choice approach for consistently estimating
route choice model parameters based on path observations using maximum
likelihood. The approach is computationally efficient, does not require choice
set sampling and the resulting path probabilities do not exhibit the independence
from irrelevant alternatives property. If link attributes are deterministic
and the link choice is modeled with a logit model, we demonstrate that we can
efficiently compute the value functions by solving a system of linear equations.
We present results based on real data (7288 states).
� HC-04
Thursday, 13:30-15:00
Meeting Room 103
Supply Chain Inventory and Scheduling
Stream: Supply Chain Management
Invited session
Chair: Rodney Parker, Booth School of Business, University of
Chicago, 60637, Chicago, IL, United States,
rodney.parker@chicagobooth.edu
1 - Dynamic Inventory Competition with Stockout-Based
Substitution
Tava Olsen, ISOM, University of Auckland, 1142, Auckland,
New Zealand, t.olsen@auckland.ac.nz, Rodney Parker
We examine when there is a commitment value to inventory in a dynamic
duopoly under stockout-based substitution. The firms face independent direct
demand but some fraction of a firm’s lost sales will switch to the other
firm. This problem has been previously studied in the stationary infinite horizon
(open loop) setting but not in a Markov perfect (closed loop) setting. We
give conditions under which the stationary infinite horizon equilibrium is also
a Markov perfect equilibrium.
2 - Scheduling and Uncertainty
Andrew Wirth, University of Melbourne, 3010, Parkville,
Victoria, Australia, wirtha@unimelb.edu.au
Early results on uncertainty in scheduling concentrated on a probabilistic approach.
More recently researchers have considered the stability or robustness
of deterministic schedules, that is the extent to which such schedules are affected
by perturbations. Online scheduling assumes extreme uncertainty, so
that problem information is only released over time, say, and scheduling decisions
must be made without prior knowledge. This talk will report on some
of my students’ research, with examples from scheduling of batches, parallel
machines and flowshops.
3 - An Inventory Manager with Time-inconsistent Preference
Xiaobo Zhao, Industrial Engineering, Tsinghua University,
100084, Beijing, China, xbzhao@tsinghua.edu.cn, Yun Zhou,
Xie Jinxing
We consider a periodic review inventory system with a manager with timeinconsistent
preference in quasi-hyperbolic discounting rate. A laboratory experiment
exhibited low order quantities of subjects. The system is modeled as
an intra-personal sequential game, with a result of base-stock level that is lower
than the standard optimal level. An empirical study shows evidence of timeinconsistent
preference of decision makers. A dyadic channel that comprises
a perfectly rational supplier and a quasi-hyperbolic retailer is analyzed, with a
contract to coordinate the channel.
IFORS 2011 - Melbourne HC-05
4 - Competing for Shelf Space under a Buyback Contract
Rodney Parker, Booth School of Business, University of
Chicago, 60637, Chicago, IL, United States,
rodney.parker@chicagobooth.edu
We investigate how competition between upstream suppliers for a limited retailer
shelf-space affects terms in buyback and wholesale-price contracts. We
observe that such competition can endow the retailer with rents beyond those
offered with a monopolist supplier. We further examine the effects of competition
upon wholesale price contracts vis-a-vis buyback contracts, to observe the
effects upon channel efficiency.
� HC-05
Thursday, 13:30-15:00
Meeting Room 104
Retail competition, Insurance and Energy
Markets
Stream: Marketing and OM Interface
Invited session
Chair: Mabel Chou, Decision Sciences, National University of
Singapore, 1 Business Link, BIZ 1, #04-08, 117592, Singapore,
Singapore, bizchoum@nus.edu.sg
1 - Optimal Strategies for Simultaneously Determining the
Location and Design of Competitive Facilities
Li-Jiuan Huang, Graduate Institute of Logistics Management,
National Dong Hwa University, 1,Sec. 2, Da Hsueh Rd.,
Shou-Feng, 97401, Hualien, Taiwan, ived7326@yahoo.com.tw,
Tsung-Sheng Chang
This research seeks to help a retailer develop its optimal strategies for simultaneously
determining its facility location and design in a competitive environment.
The decision problem is modeled as a stochastic program. Two main
features differentiate the proposed model from others in the literature. One is
that the model simultaneously and explicitly captures the three important aspects
in real-world retailing: demand cannibalization, market expansion and
agglomeration effect. The other is that the model takes the strategies of the
retailer’s competitors into account by way of scenarios. This research also proposes
a solution algorithm to the model for solving large-scale problems.
2 - Developing Markdown Strategies to Phase-out Items in
Retail Stores
Emanuel Melachrinoudis, Mechanical and Industrial
Engineering, Northeastern University, 360 Huntington Avenue,
2115, Boston, MA, United States, emelas@coe.neu.edu, Nizar
Zaarour, Marius M. Solomon
When new items are put forward by distributors to replace similar existing
items in retail stores, the existing items have to be phased-out within a limited
time, e.g. 10 weeks. In order to clear the inventory, retail stores offer discounts.
To find an optimal markdown strategy, we collected data to determine the price
elasticity of demand for these items and developed multi-period non-linear programming
models that maximize revenue. The mathematical properties of the
models are established and efficient algorithms are developed. The models are
tested with real data provided by a retailer.
3 - Cost Efficiency and Total Factor Productivity: An Empirical
Analysis of Insurance Sector in Pakistan
Uzma Noreen, Economics Dept., International Islamic
University, sector H-10, Women Campus, 46000, Islamabad,
Pakistan, uzma.iiui@yahoo.com, Shabbir Ahmad
Data Envelopment Analysis is used to examine the efficiency and productivity
of Pakistan’s insurance sector over the period 2000-2009.The results indicate
that insurance sector is 39 percent cost inefficient, mainly due to allocative
inefficiency. However firms remain more technically efficient. Malmquist results
are also indicative of productivity growth, with significant improvement
in efficiency change. Tobit model is used to investigate the impact of firm characteristics
on performance, results illustrate that large firms are not efficient in
equating marginal products to factor prices
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