Wednesday

TD69
INFORMS Charlotte 2011
4 - Multi-echelon Network Design with Direct Shipments and Lateral Transshipments Paul Bryant, The University of Alabama, 300 Alston Hall, Box 870226, Tuscaloosa, AL, 35487, United States of America, ptbryant@crimson.ua.edu, Burcu Keskin, Sharif Melouk
We analyze a multi-echelon supply chain network to determine the location and numbers of suppliers and distribution centers to serve a set of customers with deterministic, time varying demand. Multiple sourcing is allowed including direct shipments from suppliers and lateral transshipments. Two MILP formulations are presented with three- and four-index flow variables. Findings are shown for cost/network structure and shipment decisions.
Wednesday, 8:00am - 9:30am

WA01
C - Room 201A
RFID and Sourcing Decisions in Supply Chains

Sponsor: Manufacturing & Service Oper Mgmt/ Supply Chain Operations Sponsored Session
Chair: Gary Gaukler, Texas A&M University, TAMU 3131, College Station, TX, 77843, United States of America, gaukler@tamu.edu 1 - Auto-ID Technology and Store Execution John Aloysius, University of Arkansas, WCOB 204, Fayetteville, AR, United States of America, JAloysius@walton.uark.edu
Auto-ID technologies are a promising means of improving retail store execution. Our experiment in the field explores issues of managerial relevance including process conformance and on shelf availability.
TD69
W - Grand D - 2nd Floor
Closed-Loop and Sustainable Supply Chain Network Design

Sponsor: Manufacturing & Service Oper Mgmt/ Sustainable Operations Sponsored Session
Chair: Ana Muriel, University of Massachusetts Amherst, 160 Governors Drive, Amherst, United States of America, muriel@ecs.umass.edu Co-Chair: Elif Akcali, Associate Professor, University of Florida, 303 Weil Hall, Gainesville, FL, 32611, United States of America, akcali@ise.ufl.edu 1 - Robust Design of a CLSC Network for Uncertain Carbon Regulations and Random Product Flows Nan Gao, Iowa State University, 3004 Black Engineering, Ames, United States of America, nangao@iastate.edu, Sarah Ryan
We combine robust optimization with stochastic programming to solve a multiperiod capacitated closed-loop supply chain (CLSC) network design problem considering carbon emissions caused by transportation. Uncertain carbon regulations may take the form of either tax or cap-and-trade, while demands and returns are characterized by probability distributions. Results from a detailed case study reveal implications for network configuration, product allocation, and transportation flows.
2 - Order Expediting Based on Pipeline Visibility Gary Gaukler, Texas A&M University, TAMU 3131, College Station, TX, 77843, United States of America, gaukler@tamu.edu
In this paper we discuss the potential impact of order tracking updates on inventory replenishment decisions. We examine a stylized global supply chain, in which a retailer faces stochastic lead times for order fulfillment from a distant supplier. The retailer may opt to expedite orders in response to information about the status of her resupply pipeline. We study the performance of the expediting policy for varying supply chain configurations.
3 - Global Sourcing Replenishments Face to Demand Forecasting Uncertainty Hubert Thibault, Ecole Centrale Paris, Grande voie des Vignes, Chtenay Malabry, 92290, France, thibault.hubert@ecp.fr
Nowadays, firms have to look for farther suppliers and manage the increasingly complex SC in Global Sourcing. The literature tends to show that the suppliers temporal distances impact the performance of the SC due to the variability in SCM. This paper proposes solutions to limit inventory level while maintaining a high service level in GS, by taking into account the forecasts and the demand variability. We show that our model works better than classical policies on a real case study.
2 - A Closed-loop Supply Chain Network Design Problem under Demand and Return Uncertainty Sung Ook Hwang, Texas A&M University, 241 Zachry, 3131 TAMU, College Station, TX, 77840, United States of America, hwang1227@neo.tamu.edu, Halit Uster
We consider the design of a multi-product closed-loop supply chain network under new and return product demand uncertainty. The problem is modeled as stochastic mixed integer linear program and a Benders decomposition based approach is developed. An analysis and computational results illustrating the efficieny of the approach are presented.
4 - Sourcing under Supply Risks: Quantity Commitment and Dual Sourcing Options Zhuping Liu, University of Connecticut, 2100 Hillside Road, OPIM, Storrs, CT, 06269, United States of America, liuzhuping03@gmail.com, Cuihong Li
We consider a buyer who has the option to source from one single supplier or from two suppliers. Each supplier faces supply risks but can endogenously choose his supply reliability. To encourage the supplier(s) to choose a suitable reliability level, the buyer may offer its supplier(s) quantity commitment as an incentive. We examine how the buyer may use quantity commitment and the dual sourcing option in her sourcing strategy concerning supply risks.
3 - Sustainable Supply Chains Network Design: Balancing Trade-Offs To Optimize Efficiencies Amin Chaabane, Professor, Ecole de Technologie Suprieure, 1100 Notre Dame Street Ouest, Montreal, Qc, H3C1K3, Canada, Amin.Chaabane@etsmtl.ca, Marc Paquet
This research addresses the design of sustainable supply chains in the presence of environmental regulations that impose product recycling and carbon emissions reduction. The design task is formulated as a multi-objective optimization model that accounts for cost and carbon reduction, achieves a good service level and maintains good quality for products. The capability of the model is illustrated through a case study for which a set of Pareto optimal and efficient solutions are obtained.
WA02
C - Room 201B
Pricing I
Contributed Session
Chair: Jing Zhou, Assistant Professor, UNC Charlotte, 9201 University City Blvd, Charlotte, NC, 28223, United States of America, jzhou7@uncc.edu 1 - Pricing of Successive Product Releases: The Impact of Prior Versions with Strategic Customers Michael Pangburn, Associate Professor, University of Oregon, Lundquist College of Business, Eugene, OR, 97403, United States of America, pangburn@uoregon.edu, Shubin Xu
We consider a firm offering successive versions of a (software) product. The firm decides the interval between releases and price, to maximize profits. We permit consumers to be strategic when deciding whether to purchase or wait for a later version. In this context, we show that with a regular frequency of introductions, the firm optimally waits years between product releases, even with a continuously improving technology and no fixed cost of version releases.
4 - Design of the Reverse Logistics Network for Electric Vehicle Batteries Ana Muriel, University of Massachusetts Amherst, 160 Governors Drive, Amherst, United States of America, muriel@ecs.umass.edu, Tilman Schnellenpfeil, Stephan Biller, Guoxian Xiao
We develop a profit model that includes the major factors driving costs and revenues in the handling and remanufacturing of failed electric vehicle batteries. Using this model we study alternative reverse logistics network designs and identify under what conditions each of them would be optimal.
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2 - Advanced Selling and Price Discrimination Using Gift Cards in Service Supply Chains Jing Zhou, Assistant Professor, UNC Charlotte, 9201 University City Blvd, Charlotte, NC, 28223, United States of America, jzhou7@uncc.edu, Moutaz Khouja
Services offered by a service provider (SP) can be paid for in cash or gift cards. The SP can sell gift cards exclusively and/or through an independent retailer. We examine the conditions under which it is optimal for the SP to offer gift cards at an independent retailer and identify the optimal discount from the SP to the retailer. The SP is a Stackelberg leader determining the wholesale price per $1 of gift card and the retailer follows determining the price per $1 of gift card to consumers.
WA05
5 - Static-Dynamic Uncertainty Strategy for a Single-Item Stochastic Inventory Control Problem Mustafa K. Dogru, Researcher, Alcatel-Lucent Bell Labs, 600 Mountain Avenue, Murray Hill, NJ, 07974, United States of America, mustafa.dogru@alcatel-lucent.com, Ulas Ozen, Armagan Tarim
We consider an inventory system facing non-stationary stochastic demand in a finite planning horizon. The replenishment times are determined and frozen once and for all the beginning while decision on the exact replenishment quantities can be deferred until the replenishment time (static-dynamic inventory policy). We consider dynamic fixed-ordering and holding costs, as well as dynamic penalty costs, or service levels. We characterize the optimal policy, and develop and test two heuristics.
WA03
C - Room 202A
WA04
C - Room 202B
Stochastic Demands
Contributed Session
Chair: Mustafa K. Dogru, Researcher, Alcatel-Lucent Bell Labs, 600 Mountain Avenue, Murray Hill, NJ, 07974, United States of America, mustafa.dogru@alcatel-lucent.com 1 - A Stochastic Inventory Model with Price Quotation Kyoung-Kuk Kim, Assistant Professor, KAIST, 291 Daehak-ro, Yuseong-gu, Daejeon, 305-701, Korea, Republic of, catenoid@kaist.ac.kr, Chi-Guhn Lee, Jun Liu
We study a single item periodic review inventory management problem with stochastic demand, random price and quotation cost. At the beginning of each period, a decision is made whether to pay the quotation cost to get the price information, and if so, then how many units to order. In particular, (r,S1,S2) policies are considered. We look at the total cost functions and derive structural properties that are useful in devising an efficient optimization algorithm.
Advances in Network Optimization

Contributed Session
Chair: Rene Janssen, Netherlands Defence Academy, Het Nieuwe Diep 8, Den Helder, 1781 AC, Netherlands, RHP.Janssen@nlda.nl 1 - A Network Simplex Algorithm for the Equal Flow Problem on a Generalized Network David Morrison, Student, University of Illinois, 201 N. Goodwin Avenue, Siebel Center Department of Computer Science, Urbana, IL, 61801-2302, United States of America, morris50@illinois.edu, Jason Sauppe, Sheldon Jacobson
A network simplex algorithm is described for the minimum-cost flow problem on a generalized network with additional constraints that there exist sets of arcs which carry equal amounts of flow. Due to the LP structure, it is possible to solve the problem by operating directly on the network. This algorithm shows improved asymptotic performance per iteration over the standard simplex algorithm, as long as the number of side constraints is small.
2 - Strategies for the Stochastic Lot Sizing Problem A Nervousness Perspective Huseyin Tunc, Mississippi State University, Department of Industrial and Systems Eng, Mississippi State University P.O. Box 9542, Mississippi State, MS, 39759, United States of America, ht100@msstate.edu, Armagan Tarim, Burak Eksioglu, Onur Alper Kilic
A well-known problem in coordinating supply chain inventories is known as system nervousness. It is widely accepted that cost of nervousness is difficult to measure. We argue that cost of nervousness can be evaluated by means of three well-established inventory control strategies: static uncertainty, dynamic uncertainty, and static-dynamic uncertainty. By this means, our results provide a simple yet objective measure to assess the cost of system nervousness.
2 - Solving Nonlinear Network Problems through Piecewise Linear Approximations Grisselle Centeno, Associate Professor, University of South Florida, 4202 E. Fowler Avenue ENB118, Tampa, FL, 33620, United States of America, gcenteno@usf.edu, Aldo Fabregas
In some network problems arc costs are modeled as nonlinear increasing functions of the arc flow. When this nonlinear network lies at the core of a more complex large-scale decision model, it is desirable to simplify it without a major loss of generalization. This work shows that the resulting piece-wise linear approximation can be expressed as the maximum of k affine functions under certain conditions. The simplified linear problems generated are then approached using conventional LP solvers.
3 - A Stochastic Production-inventory Control Problem with Infinite Horizon Average Cost Criterion Jingchen Wu, University of Michigan, 2074 East Hall, 530 Church Street, Ann Arbor, MI, 48109, United States of America, wjch@umich.edu, Joseph Conlon, Xiuli Chao
We model a stochastic production-inventory control problem by diffusion processes. Assume the evolution of the inventory has two modes and the mode is the control variable. A fixed cost is incurred when the mode is changed and the holding cost is assumed to be a convex. The objective is to minimize the infinite horizon average cost. Both lost-sale and backlogging cases are considered. We show that the optimal (s,S) policy is optimal non-anticipating policies under mild assumptions.
3 - Stable Networks of Uncovered Nodes Rene Janssen, Netherlands Defence Academy, Het Nieuwe Diep 8, Den Helder, 1781 AC, Netherlands, RHP.Janssen@nlda.nl, Herman Monsuur
For a node the notion of covering captures the idea of being outperformed by another node in terms of, for example, information gathering. Networks where these subdued network positions do not exist will be called (minimal) stable. These optimal networks, which often have `bubble-like structures, will be characterized.
4 - (R,S) Inventory Policies with Non-stationary Stochastic Demand and Heterogeneous Suppliers Burak Eksioglu, Mississippi State University, Department of Industrial and Systems Eng, Mississippi State University P.O. Box 9542, Mississippi State, United States of America, beksioglu@ise.msstate.edu, Huseyin Tunc, Onur Alper Kilic, Armagan Tarim
We consider stochastic dynamic lot-sizing problems with heterogeneous suppliers differentiated by their fixed and variable costs. We present two mixed integer programming formulations both of which determine replenishment periods and corresponding order-up-to levels for each supplier. The first model minimizes total expected inventory holding, ordering, and unit costs under service level constraints. The second model assumes a linear shortage cost is incurred for each unit of backordered demand.
WA05
C - Room 203A
Topics in Optimization
Contributed Session
Chair: Elcin Kartal-Koc, Midde East Technical University, Institute of Applied Mathematics, Ankara, Turkey, kartalelcin@gmail.com 1 - The Equivalence and Generalization of Optimization Criteria Bill Corley, Professor, The University of Texas at Arlington, IMSE Department, Arlington, TX, 76019, United States of America, corley@uta.edu
We show that all existing optimization criteria are equivalent to the maximization of a real-valued function. Hence all existing criteria are equivalent to each other. All solutions and only solutions to an optimization problem involving one criterion can be obtained in terms of any other criterion. We then axiomatize and generalize the definition of an optimization criterion. Finally, we present a new optimization criterion and apply it to game theory.
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WA06
INFORMS Charlotte 2011 WA07

C - Room 204
2 - Restructuring Forward Stepwise Algorithm of Multivariate Adaptive Regression Splines (MARS) by Using Self-Organizing Map(SOM). Elin Kartal-Ko, Midde East Technical University, Institute of Applied Mathematics, Ankara, Turkey, kartalelcin@gmail.com, Cem Iyigun
Multivariate Adaptive Regression Splines (MARS) is a spline-based nonparametric regression method which uses a stepwise procedure for knot selection. For high dimensional datasets, the examination of large set of candidate knots becomes a computational burden. In this study, the forward stepwise algorithm is improved to increase the computational efficiency by selecting proper knot points using Self-Organizing Map.
Advances in Simulation Theory

Contributed Session
Chair: Jie Xu, George Mason University, Fairfax, VA, United States of America, jxu13@gmu.edu 1 - Simulation Visualization Rhetoric and its Practical Implications Terra Knowles Ball, Old Dominion University, 3200 Crestwood Lane, Virginia Beach, VA, United States of America, tknowles@odu.edu, Andrew Collins
Modern Modeling & Simulation (M&S) research has been focused on the underpinnings of its paradigms and its validation. While researchers dig further into the bowels of the subject, the perceptions of M&S by its users and customer have been widely ignored. This presentation will expose the community to existing research on the rhetoric of visualization, demonstrate the importance of contemplating the philosophy of visualization, and highlight current problems with simulation visualization.
3 - Stochastic Inventory Control with Deterioration and Partial Backlogging Yang Tan, FedEx Express World Headquarters, Pricing Science and Engineering Department, 3640 Hacks Cross Road, Memphis, TN, 38125, United States of America, ytan0920@gmail.com
A new deteriorating inventory model is studied under stochastic customer demand and partial backlogging. The system is under periodic review and there is no fixed order cost. Previous research has proved that a base stock policy is optimal under complete backlogging and non-deterioration. This paper hence adds a new branch to the current literature by studying the effects of deterioration and partial backlogging under stochastic demand. It is shown that the base stock policy is still optimal as long as the terminal value function is convex and second-order differentiable. The explicit base stock level is derived for a special case.
2 - Absolute Precision Stopping Rules Bahar Cavdar, School of ISyE, Georgia Tech, Atlanta, United States of America, baharca@gatech.edu, Dashi Singham, Lee Schruben, David Goldsman
Building on the work of Singham and Schruben, we discuss properties of absolute precision stopping rules for confidence intervals for simulated performance measures such as the mean. In particular, we discuss cases in which the underlying observations are are not i.i.d. normally distributed, e.g., elementary ARMA processes and i.i.d. Bernoulli random variables.
WA06
C - Room 203B
Classic Scheduling I
Contributed Session
Chair: Jeffrey Schaller, Eastern Connecticut State University, 83 Windham St., Department of Business Administration, Willimantic, CT, 06226, United States of America, schallerj@easternct.edu 1 - Scheduling Precedence-constrained Jobs on Machines to Minimize the Weighted Completion Times Rajneesh Rajneesh, Student, North Carolina State University, Operations Research, 2152 Burlington Labs, 2500 Stinson Drive, Raleigh, NC, 27695-7913, United States of America, rrajnee@ncsu.edu, Salah Elmaghraby
We studied a problem of scheduling precedence-constrained jobs on pre-specified machines with an objective to minimize the weighted completion times. Due to strong NP-hardness, even for two machines and chain-type precedence constraints with weight and processing time of jobs as 1, we propose heuristics for the case when the precedence constraints are series-parallel. We focus on design and analysis of heuristics to establish average-case, worst-case performance bounds and computing involved.
3 - Small Sample Behavior for Importance Sampling Estimators Jihye Choi, Stanford University, Huang Engineering Center, Stanford, United States of America, jichoi@stanford.edu, Peter Glynn
Importance sampling (IS) is a widely used simulation method for computing rare event probabilities, but suffers from the defect that the sample variance can sometimes be wildly misleading as a measure of estimator accuracy. In this talk, we study the small sample behavior of IS estimators using large deviations. This work suggests new diagnostics for IS rare event simulation, and reveals new insights into asymptotic efficiency and static vs dynamic IS.
4 - A Combined Ranking and Selection Procedure for Selection of the k-Best Andrew Kiekhaefer, University of Iowa, 2025 North Ridge Dr, Iowa City, IA, 52241, United States of America, andrew.kiekhaefer@gmail.com, Yong Chen
We present a ranking and selection procedure for the problem of selecting the kbest systems, where system means and variances are unknown and unequal. This procedure is an extension and generalization of earlier work regarding the selection of the single best system and reduces to the single best equivalent when k=1. We present the proofs associated with the theoretical guarantees as well as empirical results on the probability of correct selection and comparisons with alternative methods.
2 - Scheduling Wafer Lots on Parallel Dedicated Machines in a Semiconductor Fabrication Sangoh Shim, Hanbat National University, Deokmyung-Dong 16-1, Daejeon, Korea, Republic of, soshim@hanbat.ac.kr
In this research, scheduling wafer lots on workstations composed of parallel dedicated machines, each of which can process a set of specific product families is addressed. A setup operation is required between processings of wafer lots of different product families. To minimize makespan, heuristic algorithms are presented. A series of computational experiments are performed and results show that the suggested algorithms give good solutions in a reasonable amount of computation time.
5 - Non-uniform Sampling Distribution for Discrete Optimization via Simulation Jie Xu, George Mason University, Fairfax, VA, United States of America, jxu13@gmu.edu
Locally convergent random search (LCRS) algorithms are an important class of discrete optimization via simulation algorithms that combine convergence with competitive performance. LCRS algorithms require a sampling distribution to randomly generate solutions. We investigate the use of non-uniform sampling distributions and show through numerical experiments the improvement attainable by switching from a uniform sampling distribution to a proper nonuniform sampling distribution.
3 - Scheduling Groups of Jobs on Parallel Machines to Minimize Total Earliness and Tardiness Jeffrey Schaller, Eastern Connecticut State University, 83 Windham St., Department of Business Administration, Willimantic, CT, 06226, United States of America, schallerj@easternct.edu
This paper considers the problem of scheduling identical parallel machines with family setups when the objective is to minimize total earliness and tardiness. Heuristic procedures including a simulated annealing procedure and a genetic algorithm are proposed. These procedures are tested on a variety of randomly generated problem sets.
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C - Room 205
WA12
pedestrians, vehicles, or trains and take advantage of their pre-coded behavior to create models faster than ever before.
Dynamic Issues in Production and Inventory

Contributed Session
Chair: Srinivasa Puranam, Assistant Professor, Ithaca College, 37 Uptown Rd, Ithaca, 14850, United States of America, kartys.here@gmail.com 1 - Dynamic Capacity Planning under Uncertainty Considering the Constraint of Budget Hongyan Chen, Missouri University of Science and Technology, 600 W. 14TH ST, 223 EMGT Building, ROLLA, MO, 65409, United States of America, hcqk3@mail.mst.edu, Ruwen Qin
Budget restricts the capacity that can be built. In addition, adding capacity needs to consider the operation or maintenance costs over time after the initial investment. This paper considers the constraint of budget in dynamic capacity planning, and solves the problem using dynamic programming and finite difference method respectively.
WA11
C - Room 207A
Stochastic Networks
Sponsor: Applied Probability Sponsored Session
Chair: Mark S. Squillante, IBM T.J. Watson Research Center, 1101 Kitchawan Road, Rt. 134 / P.O. Box 218, Yorktown Heights, NY, 10598, United States of America, mss@us.ibm.com 1 - On the Steady-state Probability of Delay in the Halfin-Whitt Regime David Goldberg, Professor, Georgia Institute of Technology, 765 Ferst Drive, Atlanta, GA, United States of America, dag3141@mit.edu
We study the FCFS GI/GI/n queue in the Halfin-Whitt regime. We prove the first non-trivial bounds for the steady-state probability that an arriving customer has to wait for service. Our main proof technique is the derivation of new and simple bounds for the FCFS GI/GI/n queue. We further illustrate the utility of this methodology by deriving the first non-trivial bounds for the steady-state probability that many servers are idle.
2 - An Application of Dynamic Programming to Customer Relationship Management Sang Jin Kweon, PhD Student, Pennsylvania State University, State College, PA, 16803, United States of America, svk5333@psu.edu, Jaehyun Lee, Jos A. Ventura
Customer Relationship Management involves the use of technology to improve business processes with the goal of attracting new customers and retaining those that are loyal. In this talk, we propose a dynamic programming model to allocate marketing resources to promotions for new and loyal customers with the objective of maximizing the total expected discounted profit in a finite horizon.
2 - Sensitivity Analysis for Reflected Brownian Motion Ton Dieker, Assistant Professor, Georgia Institute of Technology, 765 Ferst Drive, NW, School of ISyE, Atlanta, GA, 30332, United States of America, ton.dieker@isye.gatech.edu, Xuefeng Gao
We study optimization and sensitivity analysis for stochastic networks (e.g., to make staffing decisions). Our initial results are in heavy traffic, and we investigate changes with respect to the drift of a given reflected Brownian motion. Our main results are: (1) the process and its infinitesimal-change process jointly satisfy a dynamic linear complementarity problem, and (2) the steadystate distribution of the joint process satisfies a linear equation akin to the basic adjoint relation.
3 - Inventory Replenishment and Allocation Decisions under Volatile Spot Market Prices Abhilasha Katariya, PhD Candidate, Texas A&M University, 241 Zachry, TAMU 3131, College Station, TX, 77840, United States of America, abhilashapk@tamu.edu, Eylem Tekin, Sila Cetinkaya
We consider a multiperiod, inventory replenishment & allocation problem for a capacitated supplier who participates in a contractual market with fixed price and a spot market with volatile prices. Stochastic demand from contractual market must be fulfilled before price sensitive spot market demand is observed. We study the joint effect of the contractual price and spot price variability on the optimal policy parameters & suppliers decision to participate in one or both markets.
3 - Directional Derivatives of the Skorokhod Map Kavita Ramanan, Brown University, Providence, RI, United States of America, kavita_ramanan@brown.edu
In this talk, we introduce the notion of directional derivatives of the Skorokhod map. We shall describe how they can be used to characterize diffusion approximations to time-inhomogeneous queuing networks as well as for the sensitivity of performance measures of time-homogeneous queuing networks. A part of the talk is based on work with Avi Mandelbaum.
4 - Investigating the Impact of Supply Information in a Dual Source Inventory System Soheil Abginehchi, Aarhus University, Fuglesangs All 4, Aarhus V, 8210, Denmark, soha@asb.dk, Christian Larsen
In a dual source inventory model Supplier 1s leadtime is dependent on his current backlog of orders while supplier 2has a fixed leadtime. We analyse 2 scenarios. In scenario 1 the inventory system can monitor the backlog at Supplier 1 (it knows the random process that describes how the backlog evolves over time. In Scenario 2 it is first after submitting an order to Supplier 1 it knows the actual leadtime. For both scenarios we develop a Markov decision model to compute the optimal policy.
4 - Linear Stochastic Loss Networks Mark S. Squillante, IBM T.J. Watson Research Center, 1101 Kitchawan Road, Rt. 134 / P.O. Box 218, Yorktown Heights, NY, 10598, United States of America, mss@us.ibm.com, Petar Momcilovic
We investigate throughput and cost properties in linear stochastic loss networks. The maximum throughput under exponential service times is derived and the arrival process that maximizes throughput is established. For general service times, an asymptotically critical loading regime is identified such that the probability of an arbitrary customer being lost is strictly within (0,1) as the network size increases, deliverying throughput comparable to the maximum at a relatively low network cost.
5 - Optimal Biding under Random Demand Srinivasa Puranam, Assistant Professor, Ithaca College, 37 Uptown Rd, Ithaca, 14850, United States of America, kartys.here@gmail.com, Michael Katehakis
We consider the problem of a firm that in each period procures items by participating in N auctions and then sells the acquired items. In each period there is a fixed cost K, to enter the sequence of auctions. The objective is to maximize expected daily profit. The firms valuations derive from the resale of acquired items and pertinent costs. Under sensible assumptions, we also establish monotonicity properties for the value function and the optimal bids. We also present computations.
WA12
C - Room 207BC
New Techniques in Stochastic Optimization

Contributed Session
Chair: Fabian Bastin, Assistant Professor, Computational Science and Operational Research Department, University of Montreal, C.P. 6128, Succ. Centre-Ville,, Montreal, H3C 3J7, Canada, bastin@iro.umontreal.ca 1 - Scenario Generation via Polynomial Optimization David Papp, Northwestern University, 2145 Sheridan Rd C210, Evanston, IL, 60208, United States of America, dpapp@iems.northwestern.edu, Sanjay Mehrotra
We consider the scenario generation problem of stochastic programs with continuous scenario space. The generation of a scenario tree whose moments match those of the original scenario distribution can be modeled as a semiinfinite LP, and the corresponding column generation problem becomes a global optimization problem of multivariate polynomials. We compare several approaches to find an approximate solution to this subproblem, and the resulting approximations.
WA10
C - Room 206B
Software Demonstrations
Cluster: Software Demonstrations Invited Session
1 - AnyLogic - Fast Modeling with AnyLogics Smart Libraries Andrei Borshchev, General Director, AnyLogic, 53 Frontage Road, Hampton, NJ, 08827, United States of America, George Gonzalez-Rivas
Since AnyLogic is the only tool allowing you to build discrete event, agent based, or system dynamics models, it has been the features-leader among simulation software for years. Now, as we add more smart libraries to our palette we also are becoming the speed leader simply drag and drop smart objects such as
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WA13

1 - Stochastic Dual Dynamic Programming Extensions to Power System Expansion Planning Luiz Carlos Costa Jr, PSR, Praia de Botafogo 228 / 1701-A Botafogo, Rio de Janeiro, Brazil, luizcarlos@psr-inc.com, Nora Campodnico, Fernanda Thom, Mario Pereira
This work presents a methodology to represent investment decision variables such as new thermal, renewable and interconnection capacity into the hydrothermal scheduling problem of energy systems. The model considers continuous investment decision variables aiming an optimal investment and operation policy with detailed hydro and thermal aspects. The problem is formulated as a multi-stage stochastic linear programming problem with inflow uncertainties, solved by the well-known SDDP algorithm.
2 - Solving the Drift Control Problem Melda Ormeci Matoglu, Ozegin University, Kusbakisi Cad No 2, Altunizade, Istanbul, Turkey, melda.ormeci@ozyegin.edu.tr, John Vande Vate
We model managing capacity as a Brownian drift control problem. We formulate an LP and develop a bound for the continuous problem from a dual solution to the discrete problem. Showing the equivalence between strongly feasible bases and deterministic unichain policies, we combinatorialize the pivoting process and solve the LP without computing its coefficients. We develop scheme analogous to column generation to drive the gap between the discrete approximation and the continuous problem to zero.
3 - On Bias Reduction in Stochastic Nonlinear Programming Fabian Bastin, Assistant Professor, Computational Science and Operational Research Department, University of Montreal, C.P. 6128, Succ. Centre-Ville,, Montreal, H3C 3J7, Canada, bastin@iro.umontreal.ca
We consider stochastic nonlinear programs that can exhibit simulation bias when relying on sample average approximation. We review some bias reduction techniques, et analyse their impact on optimization bias, as well as confidence intervals on optimal values and solutions.
2 - Stochastic Transmission Planning for Integration of Wind Power Using Conditional Probability Heejung Park, tohjpark@gmail.com, Ross Baldick
This work describes large-scale transmission planning for grid integration of wind energy with a two-stage stochastic model. Using the correlation between load and wind, wind power availability is represented by the conditional expected value of wind given the load level. The objective of the problem is to minimize the total system cost while procuring wind energy that is 20% of the total energy. We provide case studies with a simplified ERCOT transmission system.
WA13
C - Room 207D
Topics in Revenue and Yield Management

Contributed Session
Chair: Yanyi Xu, Assisstant Professor, Shanghai University, 99 Shangda road, Shanghai, China, omyanyi@gmail.com 1 - Dynamic Pricing with Multiple Products and Partially Specified Demand Distribution Arnoud den Boer, PhD Student, Centrum Wiskunde & Informatica, Science Park 123, Amsterdam, 1098 XG, Netherlands, boer@cwi.nl
We study dynamic pricing for multiple products. The demand depends on on unknown parameters, whose value can be estimated by statistical techniques. The quality of the estimates is influenced by the cumulative amount of price dispersion; however, price dispersion is costly since it means that sub-optimal prices are used. The seller thus needs to balance exploitation and exploration. In this study we propose a pricing policy for this problem and show that Regret(T) is O((T log T)^1/2).
3 - Large-scale Mixed Integer Disjunctive Model for Transmission Expansion Planning under Uncertainty Fernanda Thom, PSR, Praia de Botafogo 228 / 1701-A, Rio de Janeiro, RJ, 22250145, Brazil, fernanda@psr-inc.com, Gerson Oliveira, Luiz Mauricio Thom, Silvio Binato
This work is based on the development of an optimization tool for large-scale, multi-stage and multi-scenario transmission expansion planning in a georeferenced network visualization environment. A mixed integer disjunctive model determines the least-cost transmission reinforcements required to ensure physically feasible system operation, taking into account environmental impacts and transmission investment costs subjected to generation dispatch and demand uncertainties.
4 - Integrating Dynamics and Generator Location Uncertainty for Robust Electric Transmission Planning Pearl Donohoo, Doctoral Candidate, MIT, 77 Masachusetts Avenue, E40-246, Cambridge, MA, 02139, United States of America, pdonohoo@mit.edu
Prompted by renewable energy mandates, the policy question today is whether to proactively plan and construct large interregional transmission networks or react to developments in the power system with incremental investments. Comparing proactively and reactively planned systems requires a stochastic dynamic model, but such a tool does not yet exist for wide area transmission planning. We propose to solve this stochastic dynamic program using approximate dynamic programming methods.
2 - A Note on Wholesale Price-Only Contracts with Postponed or Fixed Retail Price Yanyi Xu, Assisstant Professor, Shanghai University, 99 Shangda road, Shanghai, China, omyanyi@gmail.com, Arnab Bisi
We study the wholesale price-only contract with price-postponement in a supply chain consisting of one manufacturer and one retailer. For both additive and multiplicative demand models, we show that the profit functions are unimodal and for both manufacturer and retailer under mild conditions. We also extend existing results on the fixed retail price case and a revenue management problem.
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C - Room 208B
Decision Analysis, Game Theory and Homeland Security II

Sponsor: Decision Analysis Sponsored Session
Chair: Xiaojun Shan, University at Buffalo, SUNY, Buffalo, NY, United States of America, xshan@buffalo.edu Co-Chair: Jun Zhuang, University at Buffalo, SUNY, 435 Bell Hall, Buffalo, NY, United States of America, jzhuang@buffalo.edu 1 - What Would You Know About the Terrorist Attack? Target Information vs. Rationality of the Attacker Mohammad Nikoofal, PhD Candidate, McGill University, Desautels Faculty of Management, Bronfman Building, 1001 Sherbrooke West, Montreal, QC, H3A 1G5, Canada, mohammad.nikoofal@mail.mcgill.ca, Mehmet Gumus
In this paper, we shed light on the value of information in the context of defender-attacker games. We consider two settings: (1) defender knows the target that is more likely to be attacked but does not know whether the attacker is rational or not; (2) defender knows the degree of attackers rationality, but does not know which target to be chosen. We fully characterize the equilibrium defense strategy for each setting, and show that it involves a set of thresholds for each target.
3 - Demand Modelling of a Hotel Market by Customer Choice Sets Alwin Haensel, VU University Amsterdam, Department of Mathematics, Amsterdam, Netherlands, alwin.haensel@vu.nl, Ger Koole
We use choice sets to model the customers buying behavior. A demand estimation method based on MLE and the EM-algorithm is presented. The main focus is on an application case to a real hotel market, the underlying sales data is unconstrained in terms of hotel preferences and price sensitivity.
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C - Room 208A
Multi-stage Stochastic Programming Applied to Power Systems Expansion Planning

Sponsor: Energy, Natural Resources and the Environment/ Energy Sponsored Session
Chair: Ross Baldick, Professor, University of Texas at Austin, 1 University Station, Austin, TX, United States of America, baldick@ece.utexas.edu Co-Chair: Luiz Augusto Barroso, Technical Director, PSR, Praia de Botafogo 228 sala 1701 Parte, Rio de Janeiro, RJ, 22250-906, Brazil, luiz@psr-inc.com
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2 - Game Theoretical Models for Food Supply Chain Risk Management Cen Song, University at Buffalo, Buffalo, NY, United States of America, censong@buffalo.edu, Jun Zhuang
In food supply chain, the producers or retailers may add additives or preservatives to food, which may preserve flavor or enhance its taste and appearance, and thus increase customer demand and profit. However, some additives and preservatives may cause health problems to the customers. Government can regulate as well as tax from this business. In this paper, we present and analyze a game between government, and customers, and provide insights to food supply chain risk management.
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metrics and optimization methods to analyze the foodshed localization of geographic areas. We used data from Iowa to analyze and validate the optimization model.
3 - Climate Engineering Options Eric Bickel, Operations Research / Industrial Engineering Center for International Energy and Environmental Policy, The University of Texas at Austin, Austin, TX, 78712, United States of America, ebickel@mail.utexas.edu
Many scientists fear that anthropogenic emissions of greenhouse gases have set the earth on a path of significant, possibly catastrophic, changes. In this paper we explore the potential of climate engineering (CE) to managing tipping points (TP). We find that a successful CE program may be able manage tipping points more efficiently than emissions reductions.
3 - Modeling Costly Learning and Counter-learning in an Attacker-defender Game with Private Information Jie Xu, University at Buffalo, SUNY, Buffalo, NY, United States of America, jxu24@buffalo.edu, Jun Zhuang
In asymmetric war scenarios (e.g., counter-terrorism), the adversary usually invests in a significant length of time to learn the system structure and identify vulnerable components, before launching real attacks. Traditional game-theoretic models either ignore such learning periods or ignore the costs of such learning. This paper fills the gap by analyzing the terrorists costly learning and defenders counter-learning (e.g., using deception) strategies in a game of incomplete information.
4 - Multivariate Analysis for a Multi-stage Green Building Decision Framework Pin Kung, The University of Texas at Arlington, Department of Industrial & Manufacturing, United States of America, pin.kung@mavs.uta.edu, Victoria Chen, Anthony Robinson
Green building has become a popular environmental topic in recent years. In our research, we have organized building options into multiple stages of decisions. Using existing software, we have conducted design and analysis of computer experiments to study the impact of green building options on sustainability outcomes.
4 - Exploiting Biases and Heuristics in Adversary Judgment and Decision Making Richard John, Associate Professor, University of Southern California, Department of Psychology, SGM 621; MC-1061, Los Angeles, CA, 90089-1061, United States of America, richardj@usc.edu, Heather Rosoff
In real security domains, adaptive adversaries may not maximize expected values. Instead, they may rely on heuristics to simplify decision-making, which is not captured by conventional game- theoretic analysis. We utilize behavioral game theory lab experiments to explore human decision-making in game contexts. We demonstrate how to take advantage of adversary deviations from the normative model.
5 - Reclaimed Water Network Design under Temporal and Spatial Growth and Demand Uncertainties Weini Zhang, University of Arizona, Systems and Industrial Engineering, Tucson, United States of America, wzhang@email.arizona.edu, Guzin Bayraksan, Gunhui Chung, Kevin Lansey
A reclaimed water distribution network for supplying treated water to public users or agricultural areas is modeled using two-stage stochastic binary optimization with random recourse. Both construction and energy costs expanded during a 20-year period are considered. The network has spatial growth and reclaimed water demands are uncertain. An algorithm is developed to exploit the structure of the network to solve the problem. Computational results are presented on a realistic problem.
5 - Game-theoretic Analysis of Attack and Defense in Cyber-physical Networks Fei He, University of Buffalo, SUNY, Buffalo, NY, United States of America, feihe@buffalo.edu, Nageswara Rao, Jun Zhuang
A number of critical infrastructures rely on cyber and physical components that are both subject to natural, incidental or intentional degradations. In this paper, the strategic interactions between an attacker and a defender of such infrastructures are studied using game theoretic models. Both analytical and numerical results are presented to illustrate the models. Our research provides insight into the survival of such infrastructures under various costs and the knowledge that players have.
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C - Room 209B
Decision Analysis I
Contributed Session
Chair: Shardul Phadnis, PhD Candidate, Engineering Systems Division, MIT, 77 Massachusetts Avenue, E40-286, CAMBRIDGE, MA, 02139, United States of America, shardul@mit.edu 1 - IS leaders Behavior and Decision-making in Their Evaluation of Information Service Fang Ding, Peking University, Peking University, Bejing, China, Beijing, BJ, 100871, China, dingfang@gsm.pku.edu.cn
Based on an empirical study in China, we investigate IT investment context and IS leaders risk attitude. Then, a mathematical model is presented which describes how IS leaders analyze and assess the value of information service provided by external IT advisers. Finally, we analyze the decision-making model by comparing the increase in expected revenue with the cost of information service. Our research will help IS leaders make the decisions whether they need to buy information service.
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C - Room 209A
Sustainable Environmental Policy and Natural Resource Management

Sponsor: Energy, Natural Resources and the Environment/ Environment and Sustainability Sponsored Session
Chair: Guzin Bayraksan, University of Arizona, Systems and Industrial Engineering, Tucson, United States of America, guzinb@sie.arizona.edu 1 - Appraisal of Carbon Policies: Capacity Expansion Game with Uncertainty and Heterogeneous Players Liang Chen, University of Calgary, Department of Economics, Canada, liangch2008@gmail.com, Janne Kettunen, Jared Carbone, Mahmoud Mazadi
In North America, both the stringency of regulations to curb CO2 emissions and the specific form that they take remain highly uncertain. Players in the power industry may choose to hedge against these uncertainties whilst their willingness and ability to do so can differ markedly due to their risk aversion and existing assets. We develop a game theoretical approach to analyze the effect these firm specific characteristics have on the cost of climate policy in the Alberta electricity market.
2 - Decision Making under Uncertain Designer Preferences Vijitashwa Pandey, Post Doctoral Researcher, Oakland University, 3171 John R Road, Rochester, MI, 48307, United States of America, vijitashwa@gmail.com, Zissimos Mourelatos
Engineering design decisions can be made to reflect decision maker preferences if his/her utility function is known. Eliciting true utility functions is difficult because decision makers are rarely consistent with their decisions. We discuss methodologies to circumvent this issue.
3 - Decisions Based on Product Review Data: Incorporating Attribute Value Uncertainty Dennis Leber, NIST, 100 Bureau Dr, Gaithersburg, MD, 20899, United States of America, dennis.leber@nist.gov, Jeffrey Herrmann
Formal and informal reviews of products and services, which can be found in abundance, are often used by consumers to estimate the level of satisfaction that will be received. When developing a decision model based on these data there exists an uncertainty in the attribute values that current decision models fail to consider. This talk will present decision methods that consider attribute value uncertainty and apply these methods to the problem of choosing a roofer based on customer review data.
2 - A Systematic Optimization Model for Foodshed Localization Guiping Hu, Iowa State University, IMSE Department, Ames, IA, 50011, United States of America, gphu@iastate.edu, Lizhi Wang, Randy Boeckenstedt, Susan Arendt
Local food production is drawing increasing attention due to environmental and health considerations. In this study, we used population, dietary and geographical information to map potential foodsheds with emphasis on minimizing total geographic distribution. We also developed innovative protocols,
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cost, resource restriction and risk control. Numerical results indicate that the developed models provide optimal and computational efficient solutions.
4 - Effect of Scenario Planning on Strategic Investment Decisions by Field Experts Shardul Phadnis, PhD Candidate, Engineering Systems Division, MIT, 77 Massachusetts Avenue, E40-286, CAMBRIDGE, MA, 02139, United States of America, shardul@mit.edu, Chris Caplice, Yossi Sheffi
Scenario planning has been recommended and used for over 60 years to make strategic decisions in the public and private sectors. However, the effects of scenarios on strategic decisions have been rarely studied empirically. We report how the use of scenarios influenced the decisions of field experts to invest in segments of the US transportation infrastructure. Our study shows that experts change the confidence in their strategic decision according to the usefulness of a segment in a scenario.
2 - Systemic Risk Components Jeremy Staum, Northwestern University, 2145 Sheridan Road, Department of IEMS, Evanston, IL, 60208-3119, United States of America, j-staum@northwestern.edu, Ming Liu
Researchers are trying to establish a theory of financial system risk management analogous to portfolio risk management. One aspect is risk attribution, the process of decomposing a risk measure into components that are attributed to individual assets or entities. Portfolio risk attribution methods do not suffice for systems that have richer structure than portfolios. We investigate systemic risk attribution and show how to design systemic risk attribution schemes with some examples.
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C - Room 210A
Scheduling Algorithms: Project, Machine and Staff Scheduling

Cluster: Scheduling and Project Management Invited Session
Chair: Mario Vanhoucke, Ghent University, Tweekerkenstraat 2, Gent, 9000, Belgium, mario.vanhoucke@ugent.be 1 - A Hybrid Heuristic for the Machine Scheduling Problem with Parallel Machines Veronique Sels, PhD Student, Ghent University, Tweekerkenstraat 2, Gent, 9000, Belgium, veronique.sels@ugent.be, Mario Vanhoucke
We consider the unrelated parallel machine scheduling problem with a makespan objective. We discuss two heuristic approaches and the hybridization of these heuristics with a truncated branch-and-bound procedure. We compare the performances of these heuristics on standard data available in literature and examine the influence of the different heuristic parameters. The computational experiments reveal that the hybrid heuristics are able to compete with the best known results from the literature.
3 - Usage of Credit Scores in Insurance Classification and Pricing Jing Ai, Assistant Professor, Shidler College of Business, University of Hawaii at Manoa, 2404 Maile Way, Honolulu, HI, 96822, United States of America, jing.ai@hawaii.edu, Linda Golden, Patrick Brockett, Bruce Kellison
The most important new development in the past decade in personal lines of insurance in the United States of America is the use by insurers of data contained in an individuals credit history file to aid in insurance risk classification and rating. This paper presents independent actuarial (statistical) justifications for the use of credit information in insurance and offers psychological and biological based explanations for the underlying mechanism.
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C - Room 211A
Global Optimization Methods in Power Systems

Sponsor: Optimization/Global Optimization Sponsored Session
Chair: Neng Fan, Sandia National Laboratories, P.O. Box 5800, MS 1316, Albuquerque, NM, United States of America, nnfan@sandia.gov 1 - Contingency-constrained Optimization for Electric Power Systems Ali Pinar, Sandia National Laboratories, Livermore, CA, United States of America, apinar@sandia.gov, Richard Chen, Jean-Paul Watson
In our earlier work, we developed efficient techniques for vulnerability analysis of electric power systems. We are now including our vulnerability analysis techniques into the decision making processes, such as the unit commitment problem. The key to our approach is our ability to compactly represent security constraints. In this talk, we will present our security formulations, and our results for solving the security-constrained unit-commitment problem.
2 - Project Scheduling and Staffing with a Multi-skilled Workforce Broos Maenhout, Ghent University, Tweekerkenstraat 2, Gent, 9000, Belgium, broos.maenhout@ugent.be, Mario Vanhoucke
When scheduling projects assumptions are made with respect to the personnel resource availability. In personnel scheduling problems assumptions are made with respect to the staffing requirements. We explore how to integrate these two scheduling problems for making strategic project staffing decisions. More precisely, we determine the number of personnel and required skill mix to complete a project.
3 - Combined Surgery Scheduling and Physician Rostering Christophe Van Huele, PhD Student, Ghent University, Tweekerkenstraat 2, Gent, 9000, Belgium, christophe.vanhuele@ugent.be, Mario Vanhoucke
The assignment of a surgery to a specific operation room for a certain patient and moment in time is quite dependent of the available surgeons and nurses. In literature, the operation room scheduling and surgery scheduling problems are often addressed separately. In this presentation, an integrated model with the overall goal to minimize cost of over- and undertime, both for the operating rooms and as the staff is presented.
2 - Local Search Methods for Transmission Network Expansion Planning Alla Kammerdiner, Assistant Professor, New Mexico State University, P.O. Box 30001, Las Cruces, NM, 880003-001, United States of America, alla@nmsu.edu
Transmission Network Expansion Planning can be formulated as a nonlinear mixed integer programming problem. We consider the problem instances used as typical benchmarks and discuss application of local search methods for solving this difficult optimization problem.
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C - Room 210B
3 - Lagrangian Duality and Branch-and-bound Algorithms for Optimal Power Flow Dzung Phan, IBM Research, Thomas J. Watson Research Center, Yorktown Heights, NY, United States of America, phandu@us.ibm.com
This talk investigates a Lagrangian dual problem for solving the optimal power flow problem which arises from power system analysis. If strong duality does not hold for the dual, we propose two branch and bound algorithms that guarantee to solve the problem to optimality. The lower bound for the objective function is obtained by the Lagrangian duality, while the feasible set subdivision is based on the rectangular or ellipsoidal bisection. The numerical experiments are reported.
Banking and Insurance

Contributed Session
Chair: Changjian Huang, UBS AG, 399 Main Avenue, Apt 614, Norwalk, United States of America, cjjhuang@gmail.com Co-Chair: Li Zhang, Sr. Credit & Portfolio Manager, Royal Bank of Scotland, 1000 Lafayette Blvd., Bridgeport, CT, 06604, United States of America, lieezhang@gmail.com 1 - Performance-based Pricing Optimization for Marketing Targeting and Subset Selection Li Zhang, Sr. Credit & Portfolio Manager, Royal Bank of Scotland, 1000 Lafayette Blvd., Bridgeport, CT, 06604, United States of America, lieezhang@gmail.com, Changjian Huang
In this study, we will present the development of a performance-based pricing optimization model interfaced with forecasting models for marketing targeting, subset selection and pricing used in financial services. This model is an IP problem which maximizes the revenue with the consideration of performance,
4 - A Distribution Grid Optimization Controller Hugo Simao, Senior O.R. Engineer, Princeton University, Sherrad Hall 112, Princeton, NJ, 08544, United States of America, hpsimao@Princeton.edu, Warren Powell, Hyun Bin Jeong, Boris Defourny
Smart meters, distributed generation and storage, and plug-in electric vehicles are some of the elements that will be added to urban electricity distribution grids in the next decade or so. The real-time control of the resulting grid will require a stochastic optimization controller. We propose a model and some solution approaches to solve this problem. We will present computational results of an implementation on a simplified distribution grid, and discuss the extension to more complex grids.
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5 - Blackout Analysis: Contingency and Emergency Operation Hongsheng Xu, ISE, University of Florida, 303 Weil Hall, P.O. Box 116595, Gainesville, FL, 32611, United States of America, xuhongsh@ufl.edu, Neng Fan, Panos Pardalos
Power grid is vulnerable under random failures or intentional attacks. In this talk, we will investigate the interactive issue between contingency selection and emergency plan including load shedding and line switching. The evaluation measurement of the pwoer grid vulnerability is the social benefit, and in our research we use the cost of the switching, generating and load shedding for the purpose of simpilicity. In the model, both buses and lines are considered in the contingency selection.
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C - Room 212A
Generalized Nash Equilibrium Problems: Models, Analysis and Algorithms

Sponsor: Optimization/Nonlinear Programming Sponsored Session
Chair: Uday Shanbhag, University of Illinois, Department of ISE, Urbana, IL, United States of America, udaybag@illinois.edu 1 - The Impact of Illiquidity in Power Market: A Stochastic Generalized Nash Equilibrium Yves Smeers, Universit Cathoique de Louvain, CORE, Voie du Roman Pays 34, Louvain-la-Neuve, 1348, Belgium, yves.smeers@uclouvain.be, Gauthier De Maere dAertrycke
We assess the effect of limited liquidity in power exchanges using an equilibrium model where agents cannot hedge up to their desired level. The problem is formulated as a two stage stochastic Generalized Nash Equilibrium. We show how the risk premium and players profits are affected by illiquidity and how illiquidity in one market can affect trade in another market.
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C - Room 211B
Stochastic Optimization with Application to Search and Detection II

Sponsor: Optimization/Stochastic Programming Sponsored Session
Chair: Johannes Royset, Associate Professor, Naval Postgraduate School, Monterey, CA, United States of America, joroyset@nps.edu 1 - Designing the Texas Influenza Surveillance Network Ned Dimitrov, Assistant Professor, Naval Postgraduate School, Monterey, CA, United States of America, ned@nps.edu, Samuel Scarpino, Lauren Meyers
In 2009, swine-origin influenza spread to the US. The Texas Department of State Health Services received a mandate to evaluate and redesign its influenza-likeillness surveillance network (ILINet). We present a novel model for designing ILINet using stochastic submodular optimization and results based on Texas hospitalizations.
2 - Solution of Affine Generalized Nash Equilibrium Problems by Lemkes Method Dane Schiro, University of Illinois at Urbana-Champaign, 117 Transportation Building, 104 South Mathews Avenue, Urbana, IL, 61801, United States of America, schiro1@illinois.edu, Jong-Shi Pang, Uday Shanbhag
Lemkes method is a pivotal algorithm for solving linear complementarity problems. We will explore how shared constraints and their multipliers affect Lemkes method. We will document new sufficient conditions for successful termination of the algorithm and detail the effects of problem regularization. Last, we will discuss a problem reformulation and associated solution method that is capable of expanding the types of accessible equilibria to a class not readily available via current methods.
2 - Multi Target Search Using Probabilistic Quadtrees Timothy H Chung, Assistant Professor, Naval Postgraduate School, 777 Dyer Road, BU-218, Monterey, 93943, United States of America, thchung@nps.edu, Stefano Carpin
We consider the search for an unknown number of static targets inside a search area. We propose the use of Probabilistic Quadtrees, which provides a variable resolution representation where the searcher needs to choose not only where to sense, but also the sensing resolution. Via a Bayesian approach with both false positive and negative detections, a posterior about the targets locations is propagated during the search effort. Search is optimized based on information gain and expected costs.
3 - On the Existence of Equilibria in Stochastic Generalized Nash Games Uma Ravat, University of Illinois at Urbana Champaign, Urbana-Champaign, IL, ravat1@illinois.edu, Uday Shanbhag
The variational conditions of stochastic generalized Nash games are given by a stochastic quasi-variational inequality (QVI). We present a framework for the tractable verification of existence of equilibria of such games without the evaluation of an expectation or its derivatives. Nonsmooth generalizations are also investigated and the ideas are illustrated through an example from electricity markets.
3 - Minimizing Collateral Damage in Network Interdiction Alexander Gutfraind, Los Alamos National Laboratory, Theoretical Division, Los Alamos, CA, United States of America, agutfraind.research@gmail.com, Matthew Johnson
Network interdiction seeks to maximize disruption to a network under resource constraints. However, interdiction of e.g. infrastructure networks should avoid harm to innocent users. In the simplest formulation an innocent is unharmed if at least one path through the network is still available. For this and other formulations I will show algorithms and hardness results.
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C - Room 212B
Scheduling and Pricing Policies in the Airline Industry

Sponsor: Aviation Applications Sponsored Session
Chair: Gizem Keysan, Senior Analyst, United Airlines, Chicago, IL, United States of America, gizem.keysan@united.com 1 - Estimating Segmented Level Parameters Based on Aggregate Level Data - Airline Case Study Hamed Hasheminia, PhD Candidate, Sauder School of Business, Apt 3E-199 Drake Street, Vancouver, BC, V6Z2T9, Canada, hamed.hasheminia@sauder.ubc.ca, David Gillen
Price differentiation is a commonly used strategy to reap higher profits from different segments of the market. Applying such pricing strategies requires precise knowledge about how different segments of the market can be affected by different strategic variables such as price and service levels. We developed a Statistical Methodology to estimate segmented level data based on aggregate level data and tested our models for airline industry.
4 - Optimal Continuous Time and Space Search for Moving Targets Using Consistent Approximations Joseph Foraker, US Naval Academy, United States of America, jcforake@nps.edu, Johannes Royset
We consider search for moving targets in continuous time and space, and formulate an optimal control problem whose solution yields optimal search trajectories. We develop a discretization scheme, show that it converges, and present numerical results that illustrate the approach.
2 - A Portfolio Approach to Comparing New Aircraft Designs for Airline Profit Navindran Davendralingam, PhD Candidate, Purdue University, 701 W. Stadium Avenue, West Lafayette, IN, United States of America, davendra@purdue.edu, William Crossley
Often, aircraft are designed to perform a design mission(s) at minimum cost or weight as surrogates for airline profitability. From the airlines perspective, the best aircraft maximizes long-term profit at a given level of risk associated with uncertain future demand. To assess new aircraft designs as potential additions to a fleet, this work couples a robust mean variance portfolio problem, which invests in projected itineraries, with an allocation problem to meet the associated demand.
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C - Room 213BC
3 - Market Driven Fleet Assignment Christophe-Mari Duquesne, Software Engineer/PhD Student, Amadeus, 485 Route du Pin Montard, Sophia Antipolis, 06902, France, chm.duquesne@gmail.com, Olivier Briant, Semi Gabteni, Denis Naddef
Given an airline schedule and demand forecasts, the fleet assignment problem consists in assigning aircraft types to flight-legs, maximizing the profit. Current model are limited by forecasts uncertainty. We propose a novel approach modeling demand as a decision variable controlled by cuts representing the market behavior. We compare ourselves to the Itinerary Based Fleet Assignment on hundreds of scenarios. Our results show in the context of moderate variability, our approach outperforms IFAM.
Product Variety and Manufacturing Complexity in Assembly/Enterprise Systems

Sponsor: Manufacturing & Service Oper Mgmt Sponsored Session
Chair: Hui John Wang, Researcher, General Motors R&D, 30500 Mound Road, Warren, MI, 48090, United States of America, hui.wang@gm.com Co-Chair: Jeonghan Ko, Assistant Professor, University of Nebraska, Lincoln, W338 Nebraska Hall, Lincoln, NE, 68588, United States of America, jko2@unl.edu 1 - Multi-product Manufacturing Line Design with Sequencedependent Stochastic Inter-task Times Jeonghan Ko, Assistant Professor, University of Nebraska, Lincoln, W338 Nebraska Hall, Lincoln, NE, 68588, United States of America, jko2@unl.edu, Ehsan Nazarian
We present optimal solutions for multi-station manufacturing system design considering stochastic inter-task times between manufacturing tasks. Our optimization model also incorporates production batch sizes and release policy in multi-model manufacturing lines. Our model simultaneously optimizes the task assignment to stations and task sequences within stations. Our approach helps improve productivity in multi-product production by reducing the impact of unexpected inter-task time variations.
4 - Applying Financial Portfolio Theory to Airline Network Planning Alex Cosmas, Lead Associate, Booz Allen Hamilton, 22 Batterymarch Street, 2nd Floor, Boston, MA, 02109, United States of America, cosmas_alex@bah.com
Current airline forecasting/demand models or market share models (e.g., Quality of Service Index) are developed from entire networks and subsequently assumed to be applicable to all markets. Our research is to leverage the fundamentals of financial portfolio theory to robust network planning. We perform an OD statistical market clustering that better accounts for the natural differences between market types to enable network planners to optimize the allocation of resources.
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C - Room 213A
Using Cutting Planes to Efficiently Solve Hard MIPs

Sponsor: Optimization/Integer Programming Sponsored Session
Chair: Mathieu Van Vyve, Professor, Universit Catholique de Louvain, CORE, Voie du Roman Pays 34, Louvain-La-Neuve, 1348, Belgium, mathieu.vanvyve@uclouvain.be 1 - Cutting Planes for Semi-continuous Network Flow Problems Gustavo Angulo, UNTEC, Domeyko 2363, Santiago, Chile, gangulo@gatech.edu, Shabbir Ahmed, Santanu S. Dey
We consider semi-continuous network flow problems, that is, a class of network flow problems where some of the flow variables are restricted to be semicontinuous. We show that even simplified versions of such problems are NPhard. Then we present a family of cutting planes for the single-node semicontinuous flow set with variable upper bounds, along with some structural properties of this set. Finally, we report computational results.
2 - System Configuration Design for Assembly of Electric Vehicle Battery Packs Sha Li, PhD Candidate, University of Michigan, Ann Arbor, MI, 48109, United States of America, lilisa@umich.edu, Jeffrey Abell, Hui Wang, S. Jack Hu, Yhu-Tin Lin
A new method for designing assembly system configurations with multiple product types is presented with applications in assembling battery packs of electric vehicles. Different from system configurations for a family of products with delayed differentiation, the proposed configuration has diverse subassemblies in the upstream required by the various battery components and the common assemblies in the downstream. The method enables efficient assembly of products with hierarchical structures.
3 - Variety Induced Complexity in Mixed-model Assembly Systems and its Impact on throughput Hui John Wang, Researcher, General Motors R&D, 30500 Mound Road, Warren, MI, 48090, United States of America, hui.wang@gm.com, S. Jack Hu
A complexity measure is proposed for assembly systems with different configurations, including serial, parallel and hybrid. The complexity measure takes into consideration operator choices at each station and the assembly system configuration. A throughout analysis model is developed for assembly systems by incorporating the operator reaction time and fatigue effect. The complexity and throughput models are applied to comparing performance of assembly systems with different configurations.
2 - Studying the Strength of Multi Row Cut Generators Laurent Poirrier, University of Lige, Institut Montefiore B28, 10, Grande Traverse, Lige, 4000, Belgium, lpoirrier@ulg.ac.be, Quentin Louveaux
We consider the question of how to generate cutting planes from various multi row relaxations. In particular, we show that these cutting planes can be in general obtained by solving a cut generating linear program (CGLP) whose complexity grows with the number of rows considered. We provide some tools that help solving these CGLP. We also present computational results that compare the speed and strength of computing cuts from different relaxations.
3 - Solving the Big-bucket Multi-item Lot-sizing Problem Using Path-modular Inequalities Mathieu Van Vyve, Professor, Universit Catholique de Louvain, CORE, Voie du Roman Pays 34, Louvain-La-Neuve, 1348, Belgium, mathieu.vanvyve@uclouvain.be
Finding provably good solutions to the multi-item big-bucket lot-sizing problem remains challenging, especially when the joint capacity is tight. We reformulate the problem as a fixed-charge transportation problem on a bipartite graph with side constraints. We generalize path modular inequalities valid for path relaxation of this last problem to be applicable to trees. We report on computation results using a heuristic separation procedure for this family of inequalities applied to our problem.
4 - Optimal Investment Strategies for Product-Flexible Manufacturing Systems under Demand Uncertainty Verena Hagspiel, Tilburg University, Warandelaan 2, Room K622, Tilburg, 5000LE, Netherlands, v.hagspiel@uvt.nl
This paper studies optimal investment strategies in product-flexible and dedicated capacities. The investment decision of a monopolistic firm selling two products in a market, characterized by price-dependent and uncertain demand, is modeled in a continuous time setting. The paper takes a real options approach. Besides the timing of the investment, the firm can choose the optimal capacity level and is free to undergo investment in flexible or dedicated capacity.
4 - News from CPLEX Math Programming Tobias Achterberg, IBM Deutschland Research & Development GmbH, Berlin, 14195, Germany, achterberg@de.ibm.com
We present new features and ingredients that have been added to IBM ILOG CPLEX Optimization Studio and give benchmark results that demonstrate the performance improvements in the recent CPLEX versions.
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C - Room 213D
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New Directions in Operations/Marketing Interface

Chair: Mehmet Sekip Altug, Assistant Professor, George Washington University, School of Business, Washington, DC, 20052, United States of America, maltug@gwu.edu 1 - Selling Multi-generation Products: Trade-in Programs and Upfront Fees Rui Yin, Assistant Professor, Arizona State University, Department of Supply Chain Mgmt, Tempe, AZ, United States of America, Rui.Yin@asu.edu, Christopher S. Tang
To entice customers to purchase both current and new generation products over time, many manufacturers and retailers are offering different trade-in programs including programs that require customers to pay an upfront fee. We present a two-period model to examine the impact of different trade-in programs on forward looking customers purchasing behavior, the manufacturers profit, and the customers surplus.
2 - Licensing of University Science: The Impact of Tacitness and Governance Capability on Contract Types Pascale Crama, Singapore Management University, 50 Stamford Road, Singapore, Singapore, pcrama@smu.edu.sg, Reddi Kotha, Tore Opsahl, Gerard George
Licensing contracts for R&D projects face incentive misalignment in an environment with hidden information. The technology and governance capabilities of the licensor, however, can influence the incentive and information structure and we study how this affects the contracts. We test our predictions on the contract choice for 1,049 technologies from a large university. The results illustrate conditions under which inventions are commercialized through different contractual structures.
3 - The Impact of Royalty Contract Revision in a Multi-stage R&D Alliance Wenqiang Xiao, New York University, Stern School of Business, New York, NY, 10012, United States of America, wxiao@stern.nyu.edu, Yi Xu
In R&D alliances, firms often revise pre-agreed royalty contracts. This paper studies how and when firms should revise royalty contracts by investigating the impact of royalty contract revision on incentives, contract design, and profits in a two-stage (R&D stage and marketing stage) alliance between an innovator and a marketer. We characterize what kind of alliances would benefit the most from royalty revision, and what kind of alliances would not benefit from royalty revision.
2 - Inventory Information Disclosure in the Presence of Strategic Consumers Tolga Aydinliyim, University of Oregon, Lundquist College of Business, Eugene, 97403, United States of America, tolga@uoregon.edu, Michael Pangburn, Elliot Rabinovich, Min Choi
We consider inventory information disclosure and pricing decisions in the presence of strategic consumers. Using an analytical model that assumes heterogeneous consumer valuations that decrease over time and an exogenous starting inventory level, we find that disclosing accurate inventory information can mitigate strategic consumer behavior. An empirical study of two online retailers supports our theoretical finding and provides evidence that demand increases at lower inventory levels.
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OM Problems in Service Firms

Sponsor: Manufacturing & Service Oper Mgmt/ Service Management SIG Sponsored Session
Chair: Sechan Oh, IBM Almaden Research Center, United States of America, seoh@us.ibm.com 1 - Outsourcing and Backsourcing under Demand Uncertainty Scott Webster, Syracuse University, Whitman School of Management, Syracuse, NY, United States of America, stwebste@syr.edu, Michel Benaroch, Burak Kazaz
We analyze how the tendency to outsource and the timing of switches between sourcing modes are affected by the degree of demand uncertainty, by relative differences in sourcing costs, and by contract flexibility permitting the switches. We develop models for finding the optimal demand thresholds for outsourcing and backsourcing, the probabilities of actual demand reaching these thresholds, the cost savings expected from switching a sourcing mode, and the expected time to making a switch.
3 - Inventory Monitoring in Micro Retailing Garrett Van Ryzin, Professor, Columbia University, New York, NY, United States of America, gjv1@columbia.edu, Margaret Pierson
Micro-retail supply chains in developing economies face many operational challenges. One major concern of manufacturers is the lack of visibility into product availability at the store level and the consequences for lost sales. We propose a novel method for estimating out-of-stock status using only sales transaction data. The method is tested on data from a pilot project using handheld point-of-sale technology at micro-retailers in Colombia.
4 - Optimal Dynamic Return Management of Fixed Inventories Mehmet Sekip Altug, Assistant Professor, George Washington University, School of Business, Washington, DC, 20052, United States of America, maltug@gwu.edu
We consider a retailer that sells a fixed amount of inventory over a finite horizon. We assume that return policy is a decision variable which can be changed dynamically at every period. While flexible return policies generate more demand, it also induces more returns. We characterize the optimal dynamic return policies based on two costs of return scenarios. We find out how these policies change with inventory and time. We extend our model to multiple competing retailers.
2 - Pricing under Cost and Demand Uncertainties Sechan Oh, IBM Almaden Research Center, United States of America, seoh@us.ibm.com, James Rhodes, Ray Strong
In this talk, we discuss a service firms problem of pricing under cost and demand uncertainties. We show that the two uncertainties have countervailing impacts on the firms pricing decision: cost uncertainty increases price, and demand uncertainty decreases price. This result leads to an interesting conclusion that in the presence of demand uncertainty, cost uncertainty is beneficial for the service providers expected profit.
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Incentives in R&D and Product Design

Chair: Yi Xu, University of Maryland, Smith School of Business, College Park, MD, 20742, United States of America, yxu@rhsmith.umd.edu 1 - Procurement Contracts for Co-produced Components Saurabh Bansal, Pennsylvania State University, 405 Business Building, University Park, 16801, United States of America, sub32@psu.edu, Sreekumar Bhaskaran, Karthik Ramachandran
When new products are introduced, firms are subject to uncertainty in quality of co-produced components, which are procured from external suppliers. We study how these firms should contract with their suppliers, and how this influences the suppliers process improvement efforts. We also examine the role of component substitution in managing this uncertainty.
3 - To Sell or To Provide? A Comparison of Selling and Membership Ioannis Bellos, PhD Candidate, Georgia Tech, 800 W. Peachtree, Atlanta, GA, 30308, United States of America, Ioannis.Bellos@mgt.gatech.edu, Beril Toktay, Mark Ferguson
We study the auto manufacturers choice regarding whether to provide mobility service (e.g. car sharing) in conjunction with the traditional sales channel. A multinomial logit model is used to characterize the consumers choice between purchasing a vehicle, benefiting from the mobility service or relying on an outside option (e.g. public transportation). We characterize the benefit to the manufacturer of providing mobility service and the environmental implications of this strategy.
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2 - Selection of Supply Portfolio in a Make-to-order Supply Chain with Disruption Risks Tadeusz Sawik, AGH University of Science & Technology, Al. Mickiewicza 30, Krakow, Poland, ghsawik@cyf-kr.edu.pl
The supply portfolio in a make-to-order supply chain with disruption risks is selected using mixed integer programming, conditional value-at-risk and scenario analysis. Given a set of customer orders for products, the decisionmaker needs to allocate the orders among suppliers of parts to minimize total cost and to mitigate the impact of local and global supply disruptions.
Operator Methods in Finance

Cluster: Quantitative Finance Invited Session
Chair: Rafael Mendoza-Arriaga, Assistant Professor, University of Texas at Austin, IROM, 1 University Station, CBA 5.202, B6500 (IROM), Austin, 78712, United States of America, Rafael.MendozaArriaga@mccombs.utexas.edu Co-Chair: Liming Feng, Assistant Professor, University of Illinois at Urbana-Champaign, 104 S Mathews Avenue, Urbana, IL, 61801, United States of America, fenglm@illinois.edu 1 - Time-changed Fast Mean-reverting Stochastic Volatility Models Matthew Lorig, Postdoctoral Scholar, Princeton University, Sherrerd Hall, Princeton, NJ, 08544, United States of America, mattlorig@gmail.com
We introduce a class of randomly time-changed fast mean-reverting stochastic volatility (TC-FMR-SV) models. Using spectral theory and singular perturbation techniques, we derive an approximation for the price of any European option in the TC-FMR-SV setting. Three examples of random time-changes are provided and are shown to induce distinct implied volatility surfaces. Features of the TCFMR-SV framework are jumps in the price process, the leverage effect and multiple factors of volatility.
3 - Strategic Supplier Selection in Manufacturer-Supplier Games with Supply Side Disruptions Sung Hoon Chung, The Pennsylvania State University, 244 Leonhard Building, University Park, United States of America, shchung@psu.edu, Terry Friesz, Robert Weaver
We present the model of the strategic supplier choice of manufacturing firms operating in supply chains with spatial dimensions. We propose an algorithm based on fixed-point theory and show that it is computationally tractable with random variables. Numerical results indicate that supplier selection policy is to be decided by consideration of supplier competition, capacity, and network failure settings.
4 - Supplier Selection and Order Quantity Allocation under Supply Risks Yingying Wang, PhD Candidate, North Carolina State University, 111 Lampe Drive Daniels Hall, Room 307, Raleigh, NC, 27606, United States of America, ywang19@ncsu.edu, Semra Sebnem Ahiska, Russell E. King, Don Warsing
In a single-period inventory system, we address the issue of selecting suppliers from multiple unreliable suppliers and allocating orders among them to minimize total cost. Supplier reliability is defined as the probability of order delivery, and total cost consists of item costs (proportional to delivered quantities), fixed costs (incurred upon order placement), and end-of-period costs. The importance of each parameter in the decision process is identified and a heuristic method is proposed.
2 - A Two-sided Laplace Inversion Algorithm with Application in Financial Engineering Steve Kou, Professor, Columbia University, 312, Mudd Building, Columbia University, New York, NY, 10027, United States of America, sk75@columbia.edu, Ning Cai
We propose a new two-sided Laplace inversion algorithm, which is useful to compute option prices and sensitivity measures in financial engineering. Theoretical truncation and discretization errors are given. Numerical examples show that the algorithm works well even for extreme strike prices.
3 - Positive Subordinate CIR Processes with Two-Sided Mean-Reverting Jumps Rafael Mendoza-Arriaga, Assistant Professor, University of Texas at Austin, IROM, 1 University Station, CBA 5.202, B6500 (IROM), Austin, 78712, United States of America, Rafael.Mendoza-Arriaga@mccombs.utexas.edu, Vadim Linetsky
In this paper we present the SubCIR jump-diffusion process. The SubCIRs diffusion dynamics are those of a CIR process. The SubCIRs jump component includes two-sided mean-reverting (state-dependent) jumps. The process remains strictly positive if the CIR process satisfies Fellers condition. The analytical tractability of the SubCIR process makes it a richer extension to the CIR process (compared to previous models) and it is also a natural alternative for interest rates and credit models.
5 - A New Look Into Procurement Risk Management Arash Dadvand, CGN and Associates, 415 SW Washington St., Peoria, IL, United States of America, adadvand@cgn.net
Cost management in supplier selection and procurement strategy has been the center of many procurement decisions. Another equally-important factor in procurement decisions is the procurement risk and its effect on both the product and overall company risk. With the growth of globalization, changing global power balance, cultural and political changes and environmental and energy concerns, more attention is required to understand procurement risk effect on overall corporate competitiveness.
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4 - Inverting Analytic Characteristic Functions Liming Feng, Assistant Professor, University of Illinois at Urbana-Champaign, 104 S Mathews Avenue, Urbana, IL, 61801, United States of America, fenglm@illinois.edu
We present sinc expansion based schemes for inverting analytic characteristic functions that naturally arise in derivatives valuation problems. The schemes are simple but highly accurate, with exponentially decaying errors and explicit expressions for the error estimates. Numerical examples on pricing European vanilla options with extreme strikes and Monte Carlo simulation of Levy processes illustrate the effectiveness of the schemes.
Innovation and Health Care

Sponsor: Health Applications Sponsored Session
Chair: Evin Jacobson, Postdoctoral Research Associate, Imperial College Business School, Tanaka Building, South Kensington Campus, London, SW7 2AZ, United Kingdom, euzun@imperial.ac.uk 1 - A Bayesian Approach to the Model of Beta-cell Mass, Insulin, and Glucose Kinetics Zhen Liu, Engineering Management & System Engineering, University of Missouri-Rolla, Rolla, MO, 65409, United States of America, zliu@mst.edu, John Birge
The model of beta-cell mass, insulin, and glucose kinetics was proposed to model the insulin-glucose dynamics of diabetes, and overcomes the difficulty of the classical Bergmans minimal model by incorporating long-term effects. To estimate unobserved parameters, we illustrate how the reconstruction algorithm may be efficiently implemented in a Bayesian approach where posterior sampling is made by Markov chain Monte Carlo (MCMC) techniques.
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Risk in Supplier Selection

Contributed Session
Chair: Arash Dadvand, CGN and Associates, 415 SW Washington St., Peoria, IL, United States of America, adadvand@cgn.net 1 - Application of AHP and Taguchi Loss Function in Supply Chain Sharon Ordoobadi, University of Massachusetts, 285 Old Westport Road, Dartmouth, United States of America, sordoobadi@umassd.edu
Risks and benefits of using a vendor in supply chain are identified. Taguchi loss functions are used to measure performance of each supplier with respect to the risks and benefits. AHP is used to determine the relative importance of these factors to the decision maker. The weighted loss scores are then calculated for each supplier by using the relative importance as the weights. The composite weighted loss scores are used for ranking of the suppliers.
2 - Collaborative Modular Architecture Framework for Design Evaluation Method of Reusable Medical Equipment Celestine Aguwa, Southfield, MI, United States of America, caguwa2000@yahoo.com, Leslie Monplaisir, Ozgu Turgut
This research addresses the issues in reprocessing of reusable equipment such as endoscopes with the objective of infection reduction. Modular architecture methodology that involves stakeholder input and analysis, and approximate multi-objective optimization schema is applied to group the family of endoscopes into modules. Finally, adequate reprocessing procedures are developed for each module to achieve patients safety improvement.
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3 - Radiation Treatment Planning Optimization for VMAT and Rapid Arc Therapy Kerem Akartunali, John Anderson Research Lecturer in Optimization, University of Strathclyde, Management Science Department, Glasgow, G4 0TD, United Kingdom, kerem.akartunali@strath.ac.uk, Vicky Mak-Hau
Volumetric Arc Therapy (VMAT) is a technology used for radiation treatment, where the aim is to generate a plan of radiation dosages, angles and collimator shapes. The problem is very hard to solve and has additional challenges such as time limitations. We discuss an integer programming formulation, and present a variety of solution techniques using integer and constraint programming techniques. We discuss some interesting theoretical results, and conclude with extensive computational results.
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4 - A Vertical Differentiation Model of Product Carbon Labels Anthony Craig, Massachusetts Institute of Technology, 77 Massachusetts Avenue, E40-220, Cambridge, MA, 02139, United States of America, tcraig@mit.edu, Edgar Blanco, Yossi Sheffi
Eco-labels represent a method for firms to differentiate their products based on environmental quality. Carbon labels are one type of eco-label, but differ from most eco-labels in that the quality level is continuous, rather than discrete, and influenced by all firms in the supply chain. We present a vertical differentiation model of carbon labels that captures these characteristics and examine the impact of price, quality, and label choice on the firms in the supply chain.
4 - Simulation Modelling for Stroke Care Delivery Analysis in Scotland Evin Jacobson, Postdoctoral Research Associate, Imperial College Business School, Tanaka Building, South Kensington Campus, London, SW7 2AZ, United Kingdom, euzun@imperial.ac.uk
We conduct a simulation study considering Scotland as a location where geography can make the access to timely diagnostic of stroke challenging. Our aim is to develop a methodology to assist in better allocating a limited budget on interventions. We model the system using discrete-event simulation, focusing on a system-wide overview of stroke care delivery, especially the interactions between the health care resources involved in stroke care and alternative patient pathways.
5 - On the Merits of Greenwashing: Discourse and Natural Drift In the Supply Chain Joe Rubleske, Research Associate, University of Georgia, Terry College of Business, Athens, GA, United States of America, rublesk@gmail.com, David Graham Hyatt, Nicholas Berente
The term greenwashing is used to describe tactics that firms use to appear as though they are committed to the natural environment, when in fact they are not. We adopt an evolutionary perspective to argue that greenwashing may, in certain situations, result in the authentic greening of a supply chain over time. We develop a process model that leverages the evolutionary notion of natural drift and organizational discourse theory.
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Nanomanufacturing and Nanoinformatics VI: Modeling and Quality control

Sponsor: Quality, Statistics and Reliability Sponsored Session
Chair: Satish Bukkapatnam, Professor, Oklahoma State University, 322 Engineering North, Stillwater, OK, 74078, United States of America, satish.t.bukkapatnam@okstate.edu 1 - Parameter Estimation in Particle-clustering Detection Model of Metal Matrix Nanocomposites Heping Liu, University of Wisconsin at Madison, 3270 Mechanical Engineering Building, 1513 University Avenue, Madison, WI, 53706, United States of America, hliu235@wisc.edu, Shiyu Zhou, Xiaochun Li
To ensure that metal matrix nanocomposites (MMNCs) have enhanced properties such as high strength and light weight, nanoparticles in nanocomposites need be uniformly distributed within the metal matrix. Most of the existing references evaluate the particle distribution based on a single image. This study focuses on the parameter estimation of the clustering of particles using the count data from multiple image samples.
Human, Cultural and Ecological Interactions in Sustainability

Contributed Session
Chair: Anthony Craig, Massachusetts Institute of Technology, 77 Massachusetts Avenue, E40-220, Cambridge, MA, 02139, United States of America, tcraig@mit.edu 1 - Creation of Design Methods that Facilitate Customer Decisionmaking on Sustainable Products Jinjuan She, PhD Candidate, Iowa State University, 1620 Howe Hall, 2274, Ames, IA, 50011-2274, United States of America, jjshe@iastate.edu, Erin MacDonald
Many sustainable attributes of products are not obvious to consumers, and marketing messages may not be always trusted. Product design has been used to communicate information about a product through its form and function; however, doing so in the context of sustainability is difficult for designers. This research seeks to create and test design methods that enable designers to develop product attributes that readily convey sustainability to consumers and improve sustainability considerations.
2 - Transboundary Ecosystem Services Provided by Migratory Bats Jon Cline, Postdoctoral Research Associate, The University of Arizona, School of Natural Resources and the Env, 1311 E 4th St., Tucson, AZ, 85721, United States of America, jcc1@email.arizona.edu, Laura Lpez Hoffman, Rodrigo Medllin, Darius Semmens, Jay Diffendorfer
Migratory species support ecosystem function in multiple areas, providing critical ecosystem services in different locations. The ability to quantify spatial subsidies associated with ecosystem services could be used to develop economic incentives that enhance cross-jurisdictional cooperative management. We will present an integrated multi-model of transboundary ecosystem services, critical cotton pestcontrol services, provided by migratory Mexican free-tailed bats, Tadarida brasilliensis.
2 - In-Situ Structural Characterization of SWCNTs in Dispersion Tao (Ted) Liu, Assistant Professor, Florida State University, Department Industrial&Manufacturing Eng., 2525 Pottsdamer St., Tallahassee, FL, 32310, United States of America, liutao@eng.fsu.edu, Zhiwei Xiao
Quantitative characterization of single-walled carbon nanotubes (SWCNTs) is critical for quality assurance of SWCNT dispersions and for optimizing the performance of a variety of SWCNT dispersion related applications. With an emphasis on our newly developed methods - preparative ultracentrifuge method and simultaneous Raman scattering and photoluminescence spectroscopy, in this presentation, we will give an overview on the techniques for in-situ structural characterization of SWCNT dispersions.
3 - Compilation and Analysis of Green Input-Output Tables of China for 2007 Xinna Zhao, Peking University, 5 Yiheyuan Road, Haidian District, Beijing, 100871, China, zhaoxinna@pku.edu.cn, Ming Lei
The linkage for energy, economy and environment has received increased attention. Based on the green input-output theory, the authors compile the China green input-output tables (2007). For an applicable purpose, we use the table to analyze the national economic linkage effect, FDI induced effect and the foreign trade energy-pollution effect in the context of sustainable development in China. We aim at providing the objective for industrialization and promoting the sustainable development.
3 - High Speed Tip-based Ultrasonic Nanomachining Using Atomic Force Microscope Jingyan Dong, Assistant Professor, North Carolina State University, Edward P. Fitts Department of Ind. & Sys. Eng., Raleigh, NC, 27695, United States of America, jdong@ncsu.edu
Nanomachining using the atomic force microscope (AFM) has been widely studied to achieve high resolution nanoscale structures and features. This research explores a high speed nano-machining process using AFM cantilever tip. An ultrasonic frequency vibration and is added to the cantilever and the feed is controlled by a high bandwidth nanopositioning stage. The presented process significantly improves the machining speed and material remove rate.
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allowable ranges to further improve the quality of generics, and discuss the practical importance of the internal tolerance limits. We then propose models for determining optimal internal tolerance limits on the blood concentration, while meeting the FDA benchmarks.
4 - The Adaptation of Quality Improvement Methods for Nanoparticle Production Enhancement Paul Goethals, Department of Mathematical Sciences, United States Military Academy, West Point, NY, 10997, United States of America, pgoetha@clemson.edu, Byung Rae Cho
For nanoparticle production systems, engineering a substantial experimental yield continues to pose a significant challenge to the manufacturing community. Many researchers are seeking techniques, such as response surface methodology, for process and product improvement. Under significantly elevated degrees of quality, however, these methods require some refinement. This research specifically investigates the integration of higher-order designs into nanoparticle manufacturing systems.
2 - A Fast Approximation Method for Cold-Standby System Analysis Chaonan Wang, PhD Student, University of Massachusetts Dartmouth, 285 Old westport Road, N. Dartmouth, MA, 02747, United States of America, cwang2@umassd.edu, Liudong Xing
Existing approaches to analyzing cold-standby systems have various computational complexity problems. In this work, we present an approximation method based on the central limit theorem, which can compute the reliability of a large cold-standby system in a much simpler and faster manner than the existing methods. The accuracy and efficiency of the method are illustrated using three different types of distributions (Exponential, Normal, Weibull) for 1-out-ofn and k-out-of-n cold standby systems.
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Patient Flow
Chair: Michael Magazine, University of Cincinnati, College of Business, Department of OBA, Cincinnati, OH, 45221, United States of America, mike.magazine@uc.edu Co-Chair: Craig Froehle, Froehle@ucmail.uc.edu 1 - Real-time Appointment Scheduling in Outpatient Clinics with Patient Dependent Show-rates Stephen Lawrence, Associate Professor, University of Colorado, 419 UCB, Boulder, CO, 80309, United States of America, Stephen.Lawrence@Colorado.edu, Linda LaGanga, Michele Samorani
We examine the problem of outpatient scheduling in real time as patients call in for appointments. Patients who make appointments may either show for their appointments or may be no-shows. We assume that the clinic has historical and/or patient-specific data from which individual show probabilities can be estimated, from which we develop a heuristic algorithm that builds an efficient and cost-effective schedule as patient appointment requests are received.
3 - Pharmaceutical Formulation Optimization for Scaling Up Development of Brand Name Drugs Zhe Li, Clemson University, Department of Industrial Engineering, 204B Freeman Hall, Clemson University, Clemson, 29634, United States of America, zli2@g.clemson.edu, Hsin-Li Chan, Byung Rae Cho, Brian Melloy
The current pharmaceutical formulation optimization is conducted before the manufacturing process scale-up to find the optimal combination of ingredients of a formulation. However, process scale-up potentially results in changes of formulations. Therefore, formulation optimization is applicable to determine the optimal setting aimed at ensuring the equivalent quality for the changed formulation. This research proposes a comprehensive optimization procedure incorporating design of experiments.
4 - Examining Tradeoffs between Costs and Precision to Support Decision Making in Robust Design Greg Boylan, Clemson University, Department of Industrial Eningeering, Room 150 Freeman Hall, Clemson, SC, 29634, United States of America, gboylan@clemson.edu, Paul Goethals, Byung Rae Cho
Most models used to determine optimal process settings assume sufficient conditions exist to obtain accurate estimates. In variable processes, many such assumptions do not hold. Thus, using the estimators could generate suboptimal recommendations. Improving quality and supporting decision making in resource-constrained environments requires tradeoff analyses that examine costs and precision. We propose several techniques supported by Monte Carlo simulation to provide options to decision makers.
2 - Estimating the Implied Value of the Customers Waiting Time Rachel Chen, Associate Professor, University of California-Davis, 3208 Gallagher Hall, Davis, CA, 95616, United States of America, rachen@ucdavis.edu, Lawrence Robinson
Almost all research in appointment scheduling has focused on the trade-off between customer waiting times and server idle times. In this paper, we present an observation-based method for estimating the relative cost of the customer waiting time, which is a critical parameter for finding the optimal appointment schedule.
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3 - Who Should Emergency Physicians See Next? Yann Ferrand, Assistant Professor, Clemson University, 101 Sirrine Hall, Clemson, SC, 29634, United States of America, yann.ferrand@gmail.com, uday Rao, Michael Magazine, Todd Glass
To improve patient flow in an emergency department, we investigate different ways to prioritize patients and the effect of adapting the care process protocol based on information about the patient. We use discrete event simulation to compare our approaches in terms of patient wait time and length of stay, and physician idleness.
Joint Session HAS/Homeland Security: Public Health, Homeland Security, and Disaster Response
Sponsor: Health Applications/Homeland Security - Emergency Prep Sponsored Session
Chair: Eva Lee, Professor & Director, Georgia Insitute of Technology, Atlanta, GA, 30332, United States of America, eva.lee@gatech.edu 1 - Optimizing Army Aeromedical Evacuation Response: A Scenario-based, Multi-objective Modeling Approach Nathaniel D. Bastian, Center for Operations Research in Medicine and HealthCare, Georgia Institute of Technology; Center for AMEDD Strategic Studies, U.S. Army Medical Department Center & School, 94-277 Makapipipi St Apt 121, Mililani, HI, 96789, United States of America, ndbastian@gatech.edu
The U.S. Armys health service support system remains particularly effective by employing aeromedical evacuation helicopters to efficiently evacuate casualties from the battlefield. Military commanders in Afghanistan have faced a significant combinatorial challenge integrating these life-saving yet limited assets into a comprehensive system for the entire combat theatre. This work describes a scenario-based, multi-objective modeling approach to optimize Army aeromedical evacuation response.
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Optimization, Quality and Reliability

Chair: Greg Boylan, Clemson University, Department of Industrial Eningeering, Room 150 Freeman Hall, Clemson, SC, 29634, United States of America, gboylan@clemson.edu 1 - Development of Tolerance Synthesis and Optimization for a Pharmaceutical Quality Characteristic Hsin-Li Chan, Clemson University, Department of Industrial Engineering, 103 Freeman Hall, Clemson University, Clemson, 29634, United States of America, hchan@clemson.edu, Zhe Li, Byung Rae Cho, Brian Melloy
FDA specifies benchmarks for blood concentration over time to regulate the quality of generics. The main objective of this research is twofold. First, we propose the new concept of internal tolerance limits within the FDA specified
2 - Vaccine Prioritization for Biological Terrorist Events or Pandemic Response Fan Yuan, Georgia Institute of Technology, Atlanta, GA, United Arab Emirates, fanyuan@gatech.edu, Eva Lee
This work is joint with CDC Strategic National Stockpile. We study the strategies for vaccination across a large population when limited vaccines are available. Mathematical models will be described and strategies will be analyzed with respect to the susceptibility and risk factors of different groups of individuals. Results related to H1N1 stock and mass vaccination events will be analyzed.
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3 - Analysis of Resource Needs for Postal and POD Mass Dispensing Eva Lee, Professor & Director, Georgia Insitute of Technology, Atlanta, GA, 30332, United States of America, eva.lee@gatech.edu, Chien-Hung Chen
This work is joint with CDC Strategic National Stockpile and the Global Disease Detection and Emergency Response. City readiness and emergency response for biodefense/infectious disease outbreaks/radiological incidence involves multilevel strategic and operational planning. A key element involves population protection via mass dispensing of prophylactic medication. We will analyze the resource needs and cost-effectiveness for postal and/or point-of-dispensing of medical countermeasures.
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Applications of VRP
Contributed Session
Chair: Jiefeng Xu, Wipro Technologies, 325 Springwell Ln., Alpharetta, GA, 30004, United States of America, jiefeng.xu1@wipro.com 1 - The Waste Collection Vehicle Routing Problem with Time Windows and Driver Breaks Allan Larsen, Associate Professor, Technical University of Denmark, DTU Transport, Kgs. Lyngby, Denmark, ala@transport.dtu.dk
We find cost optimal routes for garbage trucks such that all garbage bins are emptied and the waste is driven to disposal sites while respecting customer time windows and ensuring that drivers are given the breaks that the law requires. We propose an adaptive large neighbourhood search algorithm for solving the problem and illustrate the performance of the algorithm using a set of test instances from the literature as well as real-life instances from a Danish waste collection company.
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Complex System Monitoring, Diagnosis, and Evaluation

Chair: Qingyu Yang, Assistant Professor, Wayne State University, United States of America, qyang@wayne.edu 1 - A Weighted Decomposition Method for Analyzing Unreliable Manufacturing Systems Hui Wang, University of Michigan, Detroit, MI, United States of America, huiwz@umich.edu, Sheng Yang, S. Jack Hu
This talk presents a weighted decomposition method for analyzing manufacturing systems with repetitive operations, batch size, rework and scrapping work. Weights are associated with the operations on each material flow to represent the system states. The system is represented as connected graphs and stochastic modeling of systems is conducted to evaluate average system throughput. This method relaxes conventional acyclic conditions for system modeling and is applicable to all ergodic systems.
2 - A Multiple Pickup Route Optimization Problem Sandro Paz, Associate Professor, Pontificia Universidad Catolica del Peru, Avenida Universitaria 1801, San Miguel, Lima, Peru, spaz@pucp.edu.pe, Monica Puertas, Bo Zeng, Ruth Murrugarra
We consider a real problem involving multiple pickup routes and capacity arrangement. We build a mix integer programming model and develop a few solution strategies, including re-formulation and column generation. Computational results will be presented on a large-scale real data set.
3 - A Branch-and-Price for a Multi-trip Vehicle Routing Problem with Time Windows and Driver Work Hours Michel Seixas, Master Student, University of So Paulo, Av. Professor Mello Moraes, 2231, So Paulo, SP, 05508-030, Brazil, michel.povlovitsch@gmail.com, Andr Mendes
This study considers a vehicle routing problem with time windows, heterogeneous fleet regarding capacity and speed, and accessibility restrictions on customers. Each vehicle performs multiple routes per day using the same driver. It is proposed a column generation algorithm embedded in a branch-and-bound. The pricing subproblem required a dynamic programming algorithm to deal with multiple routes and workday beginning time. A constructive heuristic and a tabu search metaheuristic were developed.
2 - Uncertainty Quantification for Gear Life Prediction Zhigang Tian, Assistant Professor, Concordia University, Institute for Information Systems Engine, 1515 Ste-Catherine Street West, EV-7.637, Montreal, QC, H3G 2W1, Canada, tian@ciise.concordia.ca, Fuqiong Zhao
The prediction of crack propagation in spur gear tooth root, and thus the gear life, is studied in this work. The prediction is performed based on the finite element model of the gear and the damage propagation model. Uncertainty factors in the model are considered. A method for quantifying the uncertainty associated with the gear life prediction at a certain inspection time is developed.
4 - Vehicle Routing Problem with a Green Objective Jiefeng Xu, Wipro Technologies, 325 Springwell Ln., Alpharetta, GA, 30004, United States of America, jiefeng.xu1@wipro.com, Ajesh Kapoor, Amit Maheshwari
We analyze the standard VRP objective and show that it may not well represent true vehicle expense like fuel cost. We propose a new green objective that can improve the cost representation. Optimizing this objective will result in reduction in both vehicle cost and GHS emission. We formulate the new VRP mathematically, and show the standard VRP optimality cannot be maintained under the new objective. Finally, we present preliminary computational results on several well-known benchmark instances.
3 - Optimal Sensor Allocation Strategy for Monitoring and Diagnosis in a Bayesian Network Kaibo Liu, Research Assistant, Gerogia Institute of Technology, H. Milton Stewart School of Industrial and Systems Engineering, 765 Ferst Drive, Room 331, Atlanta, GA, 30332, United States of America, kbliu@gatech.edu, Jianjun Shi
In this paper, we investigate how to optimally select partial available information for multiple mean shifts detection and diagnosis when the number of sensors deployed is less than the total number of variables in a Bayesian network. Case studies are performed on a hot forming process to illustrate and evaluate the proposed methods under different objective-oriented scenarios.
4 - Detect Warm-Up Period for Discrete-Event Simulations Using a Self-Starting Control Chart Huan Yu, University of Iowa, MIE Department, Iowa City, United States of America, huan-yu@uiowa.edu, Yong Chen
Appropriately handling initial transients is important for unbiased estimation of steady-state parameters in a discrete-event simulation. One of the main approaches is to run the simulation for long enough and detect a warm-up period so that the data from the warm-up period will not be used in parameter estimation. We present a new method for warm-up period detection using a selfstarting control chart.
5 - A Hybrid DE Algorithm for Stochastic Vehicle Routing Problem with Simultaneous Pick up and Delivery Berna Dengiz, Dean, Baskent University, Engineering Faculty Baglica Campus, Eskisehir Road 20th km.Etimesgut, Ankara, 06530, Turkey, bdengiz@baskent.edu.tr, Fulya Altiparmak, Imdat Kara, Aysegul Gultepe
In this paper, we presents a hybrid discrete differential evolution algorithm for stochastic vehicle routing problem with simultaneous pick-up and delivery (SVRP_SPD) which is a type of classical vehicle routing problem (VRP). It is known that this problem is NP-hard. The SVRP_SPD deals with optimally integrating goods distribution and collection when there are no precedence restrictions on the order in which the operations must be performed.
5 - Service Safety Assessment Technology for Key Infrastructure Weidong Zhang, Associate Professor, University of Science & Technology Beijing, 30 Xueyuan Road, Haidian District, Beijing, 100083, China, zwdustb@gmail.com
Service safety of key infrastructure such as bridge,pipeline,ect is very important. We can put different sensor on the infrastructure and acquire service data. With the data and model of the infrastructure we could assess the risk and evaluate life of infrastructure.
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H - Morehead Boardroom -3rd Floor

2 - Sustainable Risk Management for Arctic Offshore Oil & Gas Development Seong Dae Kim, Assistant Professor, University of Alaska Anchorage, 3901 Old Seward Hwy, Anchorage, AK, 99503, United States of America, afsdk1@uaa.alaska.edu
Arctic offshore development projects face additional challenges that are unique to the region. Because of their uniqueness and challenges, offshore drilling projects require better understanding of the risks and proper strategies to manage them given the challenges in responding to spills and other problems, as well as the high impact of many risks. This research will search for risk response strategies that achieve sustainability in Arctic offshore oil&gas development.
Understanding Value and the Acquisition of Technology Innovation

Sponsor: E-Business Sponsored Session
Chair: Sam Ransbotham, Assistant Professor, Boston College, 140 Commonwealth Avenue, Chestnut Hill, MA, 02467, United States of America, sam.ransbotham@bc.edu 1 - Geometry of Alliances: Make, Buy and Ally in the Computer Industry Anne Fuller, California State University, Sacramento, Tahoe Hall Rm. 2017, 6000 J Street, Sacramento, CA, 95819-6088, United States of America, anne.fuller@csus.edu, Douglas Fuller
This paper investigates firm-level decisions on resources used for an identified technological need. Much of the existing literature concentrates on conducting R&D internally or externally to the firm. However if a firm goes outside for a particular R&D need, Make, Buy or Ally are the actual choices. The paper creates a model of a sourcing triangle that highlights three distinct distance measures useful for a number of applications. The model is exemplified in the computer industry.
3 - Analysis of Plasma Gasification Technology United States Patent Publications Leslie Simmons, Interdisciplinary Ph.D. Graduate Student, University of Alaska, School of Engineering, 3211 Providence Drive, ENGR 201, ULBA, Room 20, Anchorage, AK, 99508, United States of America, environmentalstreams@gmail.com
Plasma gasification technology inventions are submitted to United States Patent and Trademark Office (USPTO) agency. Analysis is about steps, methods, apparatus, efficiencies, and effectiveness that convert real-time and landfilled municipal, industrial, and hazardous waste feedstocks into sustainable energyfrom-waste and resource recovery.
2 - The Market Value of Network Effects Hemang Subramanian, Georgian Institute of Technology, Atlanta, GA, United States of America, hemang.subramanian@mgt.gatech.edu, Sabyasachi Mitra
Information Technology firms frequently exhibit strong network effects as increases in the number of users create value non-linearly. But how valuable are network effects? We examine market value creation from network effects through an in-depth examination of acquisitions of web-based software companies. We study not only the value created by the targets but also the synergistic value created through combined user bases of the buyer and target that exceed linear returns to scale.
4 - Manufacturing for Design and Sustainability Hsueh Ming Stev Wang, Associate Professor, University of Alaska Anchorage, 3211 Providence Drive, ESM Department, Anchorage, AK, 99508, United States of America, afhsw1@uaa.alaska.edu
A systematical approach including the innovation of manufacturing technology for design to fit the markets needs was analyzed through literature survey. The finding includes the justification of the competitive advatages of the successful new product design from the innovation of the advanced manufacturing technology. The innovation of the advacned manufacturing technologies for design link with the concepts of sustainability for the Least Rate Intial Production (LRIP).
3 - Acquiring Innovation to Fill Technology Gaps or Expand Into New Areas Sam Ransbotham, Assistant Professor, Boston College, 140 Commonwealth Avenue, Chestnut Hill, MA, 02467, United States of America, sam.ransbotham@bc.edu, Sabyasachi Mitra
External acquisition of innovation is important, particularly in high technology. We investigate software industry market value creation (or loss) from acquisitions by examining the patent portfolios of acquirers and targets. We examine technology, not financial, driven motivations. Moreover, we view patents as a two-mode network thus offering a novel methodological framework that allows for analysis of not only the acquirers of technology, but also those who did not acquire.
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H - Waring Room - 4th Floor
Productivity and Competitiveness

Contributed Session
Chair: Corey Kiassat, PhD Candidate, University of Toronto, 5 Kings College Road, Toronto, ON, M5S 3G8, Canada, ckiassat@mie.utoronto.ca 1 - Competition, Process Improvement and Evergreening Ram Bala, Indian School of Business, Gachibowli, Hyderabad, India, ram_bala@isb.edu, Sumit Kunnumkal, Milind Sohoni
Firms in innovation-intensive industries introduce upgrades to combat patent expiration, a strategy referred to as Evergreening. However, the upgrade may fail regulatory guidelines and fail to reach the market. To buffer against such failure, an incumbent firm may invest in process improvement in its existing product to combat competition. We analyze the impact of such investment on competitive entry and consequent market outcomes.
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H - Walker Room - 4th Floor
Sustainability for Business Intelligence on Technology Management and New Product Development
Sponsor: Technology Management Sponsored Session
Chair: Hsueh Ming Stev Wang, Associate Professor, University of Alaska Anchorage, 3211 Providence Drive, ESM Department, Anchorage, AK, 99508, United States of America, afhsw1@uaa.alaska.edu 1 - An Innovated Healthcare System Engineering Program at Lehigh University Hisham Abu-Nabaa, Lehigh University, 200 West Packer Avenue, Bethlehem, PA, United States of America, Hisham.Abunabaa@wilkes.edu
The new program provides solutions to healthcares complex problems. HSE attempts to attract individuals with a strong knowledge base to optimize healthcare costs, while improving quality and performance. In an increasingly diverse, dynamic, and technology driven environment, the HSE program will provide solutions, such as innovative decision systems, inventory management, resource allocation, healthcare delivery, patient safety, and quality care.
2 - A Study of Efficiency of CMM Level 5 Software Projects A DEA Analysis Dinesh Pai, Penn State Harrisburg, 777 W. Harrisburg Pike, Middletown, PA, 17057, United States of America, drp18@psu.edu
DEA is used to investigate the efficiency of a sample of 38 software development and maintenance projects, which includes projects from Fortune 500 companies, drawn from a CMM level 5 company. Benchmark projects are identified and the efficiency differences among projects belonging to different platforms, databases, and application investigated. The average overall efficiencies of the sample are relatively high and that the projects are relatively less sensitive to the frontier projects.
3 - Productivity Dilemma of Chinese Labor-intensive Manufacturing Enterprises Xiangjin Li,Peking University, Room 218, Building 64, Changchunyuan, Beijing, China, lixiangjin@gmail.com, Dongning Yang
Base on the data from 1228 employees working in Chinese labor-intensive manufacturing enterprises, we find that the perceived corporate responsible behavior by employees can effectively reduce their turnover intention, meanwhile improve their job performance. That means social responsible effort may help corporate step out of productivity dilemma, especially for Chinese labor-intensive manufacturing enterprises who pursuit operation efficiency through high labor division.
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4 - A Mathematical Model for Personnel Assignment, Considering Operator Skill Components Corey Kiassat, PhD Candidate, University of Toronto, 5 Kings College Road, Toronto, ON, M5S 3G8, Canada, ckiassat@mie.utoronto.ca
A mathematical model is developed to produce the revenue maximizing personnel assignment. As inputs for its objective function, the model uses regression equations predicting production volume based on personnels skill components. A case study is considered where regression equations are obtained and used in the mathematical programming model which yields the optimal personnel assignment. It results in a predicted revenue 5.5% superior to that of the current, first-come-first-serve assignment.
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where a 2nd generation biofuel producer attempts to renovate an existing 1st generation biofuel production facility. We present a framework that allows us to establish the necessary and sufficient conditions to form a non-empty core when the problem is modeled as a three person cooperative game.
2 - The Role of Universities in Invention of Renewable Energy and Green Technologies Deborah Strumsky, Professor, University of North Carolina at Charlotte, Department of Geography and Earth Scienc, 9201 University City Boulevard, Charlotte, NC, 28269, United States of America, dstrumsky@uncc.edu, Jos Lobo
Universities account for less than 3% of US patents overall; however universities are almost 15% of US patents in renewable energy technologies. Our research constructs a new concordance of renewable energy and green technologies for US patent data, and explores the unique role of universities for invention in green technologies in the US. Empirical results to be presented include the role of federal grant funding in advancing university research in renewable energy and green technologies.
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H - Gwynn Room - 4th Floor
Digital Media, Competitive Strategies, and Quantitative Analysis

Sponsor: Information Systems Society Sponsored Session
Chair: Lizhen Xu, Assistant Professor, Georgia Institute of Technology, 800 West Peachtree Street NW, Atlanta, GA, 30308, United States of America, lizhen.xu@mgt.gatech.edu 1 - Designing Twitter Based Business Intelligence System Huaxia Rui, The University of Texas at Austin, 1 University Station B6500, Austin, TX, 78712, United States of America, ruihuaxia@gmail.com, Andrew Whinston
We design and implement a Twitter-based BI system that forecasts movie box office revenues on a daily and weekly basis. We find that incorporating information from Twitter can reduce the mean absolute percentage error (MAPE) from 9.98% to 8.83% on average when we forecast daily movie sales of 22 movies. For opening weekend revenue forecasting, using Twitter information alone can achieve MAPE of 47.1%. For the second weekend revenue prediction, the MAPE is further reduced to 34.5%.
3 - Techno-Economic Evaluation of a Next-Generation Building Energy Management System Victor M. Zavala, Assistant Computational Mathematician, Argonne National Laboratory, 9700 S Cass Avenue, Argonne, IL, 60439, United States of America, vzavala@mcs.anl.gov, Tom Celinski, Peter Dickinson
We perform a technological evaluation of BuildingIQs next-generation energy management (EM) system and present a preliminary energy savings analysis fora commercial-sized building at Argonne National Laboratory. We demonstrate that the EM system is amenable for large-scale deployment and discuss implications in electricity markets.
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H - Suite 406 - 4th Floor
Supply Chain Management I

Contributed Session
Chair: Haitao Li, University of Missouri at St. Louis, College of Business Administration, St. Louis, MO, 63121, United States of America, lihait@umsl.edu 1 - An Econometric Analysis of Product Recall Strategies and Recall Speed Tracy Johnson-Hall, Doctoral Candidate, Clemson University, 113 Daniel Avenue, Seneca, SC, 29678, United States of America, tdjohns@clemson.edu, Manpreet Hora, Aleda Roth
We study the role of strategies adopted by firms during product recalls and their association with product shelf life. Using recall data from the food and pharmaceutical industries, we employ econometric methods to examine this association. We discuss the preliminary results and their implications to firms, consumers and policy-makers.
2 - Conversion Effects of Online Advertising Vehicles Lizhen Xu, Assistant Professor, Georgia Institute of Technology, 800 West Peachtree Street NW, Atlanta, GA, 30308, United States of America, lizhen.xu@mgt.gatech.edu, Andrew Whinston, Shu Shen, Jianqing Chen
Advertisers spend millions of dollars on various online marketing communication vehicles. How are they worth it? This paper investigates the effects of different online advertising vehicles on the conversion of consumers, based on a dataset from a major electronic device manufacturer and seller recording all of its online advertising interactions with consumers and the associated purchases.
3 - Quantitative Analysis of Longevity Risk and Securities Pricing Yinglu Deng, Tsinghua University, School of Economics and Management, Beijing, China, dengyinglu@gmail.com
Securitizing longevity/mortality risk can transfer longevity/mortality risk to capital markets. Modeling and forecasting mortality rate is key to pricing mortality-linked securities. Catastrophic mortality and longevity jumps occur in historical data and have an important impact on security pricing. This paper introduces a stochastic diffusion model with a double exponential jump diffusion process that captures both asymmetric rate jumps up and down and also cohort effect in mortality trends.
2 - Supply Chain Configuration for Diffusion of New Products Haitao Li, University of Missouri at St. Louis, College of Business Administration, St. Louis, MO, 63121, United States of America, lihait@umsl.edu, Mehdi Amini
We develop an integrated/hybrid optimization model for configuring new products supply chains while explicitly considering the impact of demand dynamics during new products diffusion. The hybrid model simultaneously determines optimal production/sales plan and supply chain configuration. We provide insights on optimal production/sales plan and supply chain configuration for new products during their diffusion process.
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Contemporary Issues in Energy Policy and Management

Chair: Paul Bergey, Associate Professor, North Carolina State University, Campus Box 7229, Poole College of Management, Raleigh, NC, 27695, United States of America, paul_bergey@ncsu.edu 1 - The Greenfield vs. Brownfield Problem Revitalization of Sustainable Energy Platforms Paul Bergey, Associate Professor, North Carolina State University, Campus Box 7229, Poole College of Management, Raleigh, NC, 27695, United States of America, paul_bergey@ncsu.edu, Geoffrey Parker
A greenfield is a scenario where a 2nd generation biofuel producer constructs a new production facility in a location of their choosing. A brownfield is a scenario
3 - On the Advantage of Quantity Leadership When Outsourcing Production to a Competitive CM Yulan Wang, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong - PRC, tcywang@polyu.edu.hk, Pengfei Guo
We investigate a supply chain comprising an OEM and a CM, where the CM acts as both an upstream partner and a downstream competitor of the OEM. The two parties can engage in a simultaneous-move game, a sequential game with the OEM as the Stackelberg leader or a sequential game with the CM as the Stackelberg leader. Based on these three basic games, we investigate their decisions in choosing Stackelberg leadership/followership by considering various system parameters.
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describe several ways in which Reverse Logistics and end-of-life must be considered in computing a carbon footprint, and ways that good RL practices can actually reduce carbon usage within the firms and its supply chains.
4 - Capacity, Pre-commitment, and Imperfect Information in a Procurement Game Abdullah Dasci, Visiting Associate Professor, Sabanci University, Faculty of Management, Orhanli-Tuzla 34956, Istanbul, Turkey, dasci@sabanciuniv.edu, Kemal Guler
An economic model for a procurement problem faced by a large-scale buyer will be presented. The supply market is assumed to be duopoly, in which firms strategic interactions are driven by their limited capacities and the buyers procurement design decisions. In this setting, the impact of dynamic procurement, pre-commitment, and imperfect information on the outcome of the procurement costs and supplier profits will be explored.
2 - Closed-loop Supply Chain Network Configuration by Stochastic Goal Programming Approach Saman Hassanzadeh Amin, Ph.D. candidate, University of Windsor, Department of Industrial Engineering, 401 Sunset Avenue, Windsor, ON, N9B3P4, Canada, hassanzs@uwindsor.ca, Guoqing Zhang
In this research, a generic closed-loop supply chain network is investigated which includes multiple plants, distribution centers, demand markets, collection centers, and products. To this aim, a goal programming model is proposed. Besides, the model is developed by stochastic programming (scenario-based) to consider uncertainty in goals, demands, and returns. Results of the numerical example indicate that the model can handle different sources of uncertainty, simultaneously.
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Topics in Procurement
Contributed Session
Chair: Maximilian Budde, University Vienna, Brnner Strae 72, Vienna, 1210, Austria, maximilian.budde@univie.ac.at 1 - Study of the Optimal Procurement Strategy Based on B2B Electronic Spot Market Jinpeng Xu, School of Management, Xian Jiaotong University, Mailbox 2230, No.28, Xianning West Road, Xian, China, jinpxu@foxmail.com, Gengzhong Feng, Wei Jiang
B2B electronic spot markets have grown to be effective trading channels in recent years. Besides the forward and option procurement from regular suppliers, the retailer can procure or sell commodities immediately to adjust her inventory on spot markets. Using single-period newsboy model, this paper analyzes the optimal ordering strategy of forward and option contracts in the presence of a spot market, and provides the optimal decisions under different liquidities of spot market.
3 - Reverse Logistics and Recall and Outdate Management in Healthcare Supply Chain Vijith Malayil Varghese, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, AR, 72701, United States of America, vvarghe@uark.edu, Ronald Rardin, Nebil Buyurgan, Raja Jayaraman, Angelica Burbano, Nabil Lehlou, Paiman Farrokhvar, Eghbal Rashidi
In this presentation we describe recall and outdate management practices widely adopted in healthcare supply chain and how returns are managed. We compare these practices to some of the best practices in other industries. Efficiencies gained in recall and outdate management through data standards adoption are also discussed.
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H - Graham Room - 3rd Floor
2 - The Optimal Number of Suppliers in the Presence of Quantity Discounts and Default Risks Alexander Rothkopf, EBS Business School, Soehnleinstrasse 8F, Wiesbaden, 65197, Germany, alexander.rothkopf@ebs.edu, Richard Pibernik, Sebastian Moritz
Firms face a fundamental tradeoff when choosing the optimal number of suppliers and allocating purchasing volume across them: While supplier management costs and volume discounts favor a concentration of the purchasing volume, supply default risks suggest a more balanced volume allocation and a larger supply base. We study the interaction of the two tendencies and identify conditions under which supplier selection and volume allocation decisions are not in line with normal business intuition.
Topics in Freight Transportation

Sponsor: Transportation Science and Logistics Sponsored Session
Chair: Xuesong Zhou, University of Utah, Salt Lake City, UT, 84112, United States of America, zhou@eng.utah.edu 1 - Lagrangian Relaxation-based Algorithm for Vehicle Routing Problem under Stochastic Travel Times Lixing Yang, State Key Laboratory of Rail Traffic Control and Safety, Beijing Jiaotong University, Beijing, China, lxyang.utah@gmail.com, Xuesong Zhou
We construct an optimization formulation for finding the a priori least expected time paths in a time-dependent and stochastic network using a sample-based representation for link travel times. A number of reformulations are proposed to establish linear inequalities that can be easily dualized by a Lagrangian relaxation approach for the vehicle routing problem.
3 - First and Second Price Sealed Bid Auctions for Push and Pull Supply Contracts Maximilian Budde, University Vienna, Brnner Strae 72, Vienna, 1210, Austria, maximilian.budde@univie.ac.at, Stefan Minner
We consider a retailer facing random demand and having the option to source from multiple suppliers with manufacturing costs being private information. To deal with demand uncertainty, the retailer can choose between push and pull contracts to source the required goods. For both contract formats, we consider reverse first price and second price sealed bid auctions with endogenous quantity to find the best supplier. We extend these results for risk aversion on the retailer and supplier side.
2 - Two-stage Adaptive Reliable Routing Algorithm with Embedded Travel Time Prediction Engine Lixing Yang, State Key Laboratory of Rail Traffic Control and Safety, Beijing Jiaotong University, Beijing, China, lxyang.utah@gmail.com, Tao Xing
On-line adaptive route guidance has been an emerging research problem in last decade. This study proposes a two-stage adaptive reliable routing algorithm based on travel time prediction and its uncertainty. With various prediction uncertainty sources been considered, in this research we develop a Lagrangian relaxation based routing algorithm to measure the real-time path travel time reliability under time-dependent and stochastic traffic conditions.
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H - Dunn Room - 3rd Floor
Reverse Logistics and Supply Chain I

Chair: Ron Lembke, Associate Professor, Supply Chain Management, University of Nevada, MGRS / 0028, Reno, NV, 89557, United States of America, ronlembke@unr.edu Co-Chair: Theresa Barker, Affiliate Assistant Professor, University of Washington, Box 352650, Seattle, WA, 98115, United States of America, barkertj@uw.edu 1 - Reverse Logistics and Carbon Footprints Ron Lembke, Associate Professor, Supply Chain Management, University of Nevada, MGRS / 0028, Reno, NV, 89557, United States of America, ronlembke@unr.edu, Dale Rogers
Most carbon footprints metrics focus on the production and distribution aspects of the product and do not include important portions of the process such as reverse logistics and end-of-life management. In this research the authors
3 - Joint Inventory-location Problem under the Risk of Probabilistic Facility Disruptions Qi Chen, Tsinghua University, Department of Automation, Beijing, China, george.c1988@gmail.com, Xiaopeng Li, Yanfeng Ouyang
This paper proposes a reliable joint inventory-location problem that optimizes facility locations, customer (re-)allocations, and inventory management decisions when facilities are subject to disruption risks (e.g., due to natural or man-made hazards). We propose an integer programming model and a Lagrangian relaxation algorithm to solve this problem. Experiments are conducted to draw managerial insights.
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4 - Capacitated Dynamic Multi-type Facility Location Problem with Co-Location Benefits Weijun Xie, University of Illinois Urbana-Champaign, Department of Civil and Enviromental Engineeri, Urbana, IL, 61801, United States of America, wxie4@illinois.edu, Yanfeng Ouyang
This talk presents a mixed-integer programming model for a multi-type facility location problem with capacity expansion over a multi-period horizon. This problem is motivated by the emerging biofuel industry. Each type of facility requires a different type of raw material to produce the same final product. In addition, co-location of different types of facilities results in cost-saving benefits. An algorithm based on accelerated Benders decomposition is proposed to solve this problem.
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problem is that the subjects orders are biased toward the middle of the demand range. Does a similar bias propagate in a competitive environment? And if it does, then how can a knowledgeable newsvendor capitalize on such a bias of his or her competitor? We address these questions through a combination of theoretical results and lab experiments.
2 - The Behavioral Benefits and Pitfalls of Top-down and Bottom-up Forecasting Processes Enno Siemsen, Assistant Professor, University Minnesota, Carlson School, Minneapolis, MN, United States of America, siems017@umn.edu, Doug Thomas, Mirko Kremer
Organizations need forecasts at multiple levels of aggregation to support operational decisions. A firm can choose to generate forecasts at the lowest level needed and sum them up to create aggregate forecasts. Alternatively, a firm can forecast the aggregate data series directly and then apportion to create lowerlevel forecasts. We examine whether either approach has advantages from a behavioral perspective if forecasts are made based on human judgment.
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H - Graves Room - 3rd Floor
Military Applications of Simulation

Sponsor: Simulation Sponsored Session
Chair: Ray Hill, Professor, AFIT/ENS, 2950 Hobson Way, Bldg 641 Suite 201, WPAFB, OH, 45433, United States of America, Raymond.Hill@afit.edu 1 - Tanker Aircraft Consolidation versus Air Task Order Resiliency Alan Johnson, Associate Professor, Air Force Institute of Technology, Department of Operational Sciences, Wright-Patterson AFB, OH, United States of America, Alan.Johnson@afit.edu, Scott Linck
The new Air Force tanker aircraft will have the ability to receive fuel from other tankers while airborne, a practice called fuel consolidation. Rising fuel costs suggest that future planners may use fuel consolidation to reduce the number of tanker sorties needed for a given Air Tasking Order. We simulate an ATO under different tanker employment scenarios to investigate effects to air campaign resiliency.
3 - Asymmetric Ordering Behavior in Newsvendor Inventory Decisions Brent Moritz, Assistant Professor, Pennsylvania State University, 469 Business Building, University Park, PA, 16802, United States of America, bmoritz@psu.edu, Arthur V. Hill, Karen Donohue
Prior research has shown that individuals making newsvendor inventory decisions exhibit an asymmetric pull to center effect relative to mean demand. This research posits that cognitive dissonance surrounding customer service expectations is a cause of this anomaly, as individuals act to mitigate dissonance even when this results in lower compensation. We test this proposition in a behavioral experiment, including a manipulation of the asymmetric ordering pattern.
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H - Caldwell Room - 3rd Floor
Building Evacuation and Crowd Management

Chair: Douglas Bish, Assistant Professor, Virginia Tech, Department of ISE, 250 Durham Hall, Blacksburg, VA, 24061-0118, United States of America, drb1@vt.edu 1 - Optimizing the Control Delay in High-rising Building Evacuation Plan Jeongin Koo, POSTECH, San 31 Hyoja, Pohang, Korea, Republic of, xession@postech.ac.kr, Byung-In Kim, Yong Seog Kim
We take an agent-based simulation approach to develop optimal evacuation plans in a high-rising building considering people with disabilities, social dynamics among people, and the structural characteristics of the building. We use the information of congested floors and stair areas to determine the control delay that regulates the start of evacuation for all the people on different floors and people with various disabilities.
2 - Model Theory and Modeling and Simulation Andreas Tolk, Professor, Old Dominion University, 241 Kaufman Hall, 23529, Norfolk, VA, 23529, United States of America, atolk@odu.edu, Saikou Diallo, Jose Padilla
Model theory is a subset of mathematics that focuses on the study of formal languages and their interpretations. Using model theory to define terms like model, simulation, data, and interoperability not only results in formal, unambiguous expressions, but also allows the application of model theoretic insights. We show that the current practice training federations contradicts our findings, in particular when integrating Human, Social, Cultural, and Behavioral models.
3 - Executable Architecture Systems Engineering (EASE), A New Vision for M&S Henry Marshall, S&T Manager, US Army Research Laboratory Simulation & Training Technology Center, RDRL-HRT-M, 12423 Research Parkway, Orlando, FL, 32826, United States of America, henry.a.marshall@us.army.mil, Chris Gaughan, Scott Gallant
This paper will describe our solutions for systems engineering and automating a distributed Modeling & Simulation (M&S) implementation to create an Executable Architecture Systems Engineering (EASE) for M&S. Well demonstrate how we capture high level system requirements and their linkage to low level model specifications. Well show how we capture metadata about the models, scenarios and execution environment and ultimately how we deploy and execute the specified models using virtual machines.
2 - Prioritizing Strategies for Healthcare Facility Evacuations Kevin Taaffe, Associate Professor, Clemson University, 130-A Freeman Hall, Clemson, SC, 29642, United States of America, taaffe@clemson.edu, Ashley Childers, Maria Mayorga
There is a lack of consensus about whether critical care or non-critical care patients should be transferred away from a healthcare facility first during an emergency evacuation. In this research, we formulate a dynamic programming model and discuss insights of the resulting patient prioritization strategies. We show that a greedy policy is not always optimal. We also compare the performance of several policy options through simulation analysis.
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H - Ardrey Room - 3rd Floor
Inventory and Forecasting Behavior

Sponsor: Behavioral Operations Management Sponsored Session
Chair: Brent Moritz, Assistant Professor, Pennsylvania State University, 469 Business Building, University Park, PA, 16802, United States of America, bmoritz@psu.edu 1 - How to Compete Against a Newsvendor Anton Ovchinnikov, Assistant Professor, University of Virginia, 100 Darden Blvd, Charlottesville, VA, 22903, United States of America, AOvchinnikov@darden.virginia.edu, Brent Moritz, Elena Katok, Bernardo F. Quiroga
In this work we study the behavioral aspects of newsvendor competition. In particular, a well known behavioral result for the monopolistic newsvendor
3 - Optimization-based Models for Hospital Evacuation Planning Douglas Bish, Assistant Professor, Virginia Tech, Department of ISE, 250 Durham Hall, Blacksburg, VA, 24061-0118, United States of America, drb1@vt.edu, Roger Glick, Esra Agca
A hospital evacuation is a logistically complex process. To assist emergency planners in planning for and managing hospital evacuations, we study optimization-based planning models that minimizes the expected risk (from both the threat prompting the evacuation and the movement of patients), given limited resources and patients that have varying medical-logistical requirements. Results are illustrated using a realistic case study.
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H - North Carolina - 3rd Floor

3 - The Parameters Effects on Performance in Artificial Neural Network for Diabetes Diagnosis Youqin Pan, Salem State University, 352 Lafayette Street, Salem, MA, 01970, United States of America, ypan@salemstate.edu, Saverio Manago
In this study, the parameters of ANNs were varied to determine the effects on system performance. The results indicate that the training algorithms significantly affect the effectiveness of ANNS. Neural networks with one-hidden layer outperform multilayer neural networks (MLNNs). Too many neurons of MLNNs may reduce the classification rate. Further, the interaction effects between the training algorithms and the structures of ANNs were shown to be significant.
Facility Logistics V
Sponsor: Transportation Science and Logistics/Facility Logistics Sponsored Session
Chair: Ananth Krishnamurthy, University of Wisconsin-Madison, 1513 University Avenue, Madison, WI, United States of America, ananth@engr.wisc.edu 1 - Improving the Revenue of Self-storage Warehouses by Optimizing Storage Scheduling Decision Yeming Gong, Assistant Professor, EM Lyon Business School, 12 Rue Dunoir, Lyon, France, gong@em-lyon.com
A self-storage warehouse manager has to decide which storage requests to accept and schedule them to maximize the revenue. We model warehouse operations as scheduling n independent multiprocessor tasks. We identify 5 cases for basic operations and show that two polynomial algorithms can solve the basic problem optimally for all cases. We further consider more complex problems with upgrading operations, and employ column generation algorithm to solve the problem.
4 - Practitioners Guide to Predictive Model Evaluation Sam Koslowsky, VP: Modeling Solutions, Harte Hanks, 55 Fifth Avenue, NY, NY, 10003, United States of America, samkos@aol.com
Decision makers have not paid sufficient attention to model evaluation.Analysts need to ask What performance criteria were used in model selection.Some believe that a model decile report provides all that is necessary in selecting among all the models that have been developed.The emphasis is on whether there are more HAVES on top, and fewer on the bottom. This is important,but there are additional critical dimensions that need to be considered.This paper will address these key issues.
2 - Investigating Slotting Strategies for Physical Internet Stores Benoit Montreuil, Laval University, CIRRELT Research Center, 2325, rue de la Terrasse, Quebec, Canada, benoit.montreuil@cirrelt.ulaval.ca, Stefan Oldewarris, H. Ronald Mantel
This paper explores alternatives for slotting inbound containers in storage centers in a Physical Internet (www.physicalinternetinitiative.org). It provides a slotting conceptual framework suited for this context and describes the alternatives and their differences. It then analyzes exploratory simulation based empirical results showing the open duration-of-stay target strategy to be best in throughput and space performance for the studied cases.
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H - Charlotte Hall - 3rd Floor
Sustainable and Reduced-Cost Energy Systems Through Optimization

Sponsor: Junior Faculty Interest Group (JFIG) Sponsored Session
Chair: Esra Buyuktahtakin, Assistant Professor, IME Department, Wichita State University, Wichita, KS, United States of America, esra.b@wichita.edu 1 - Energy Efficient Operations Scheduling with System Reliability Farnaz Ghazi Nezami, PhD Student, Wichita State University, 1845 N Fairmount, Wichita, KS, 67260-0035, United States of America, Farnaz.GhaziNezami@wichita.edu, Farnaz Ghazi Nezami, Pingfeng Wang
Significant savings in energy consumption can be achieved when manufacturing equipment is turned off if not in use. However, this approach may have some negative impacts on the machine life and reliability. In this talk, we present a framework to minimize energy consumption under reliability constraints.
3 - How to Pick a Picking System: Standardized Order Picking Modules for Criteria-based Warehouse Design Tim Geissen, Fraunhofer IML, Joseph-von-Fraunhofer Str. 2-4, Dortmund, 44227, Germany, tim.geissen@iml.fraunhofer.de, Michael ten Hompel, Detlef Spee
Order picking systems differ in their organizational and technical configuration in order to meet specific performance and quality requirements. By analyzing existing types of implementation, similar concepts and general design principles can be identified. The paper describes standardized order picking modules, common fields of application, and relevant selection criteria to support a systematical and transparent design process with a top-down approach.
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H - South Carolina - 3rd Floor
Data Mining
Sponsor: Data Mining Sponsored Session
Chair: Juheng Zhang, University of Florida, 306 Diamond Village Apt. 10, Gainesville, FL, 32603, United States of America, Juheng@ufl.edu 1 - Linear Discrimination with Strategic Missing Values Juheng Zhang, University of Florida, 306 Diamond Village Apt 10, Gainesville, FL, 32603, United States of America, Juheng@ufl.edu, Gary J. Koehler, Haldun Aytug
We study a data mining problem where data may be strategically hidden from a decision maker. Anticipating such strategic hidden data, the decision maker finds a set of default vectors to substitute missing values, so that observations will be classified correctly and also hidden information can be induced to publish.
2 - Electricity Generation Expansion Planning Considering Smart Grid Technologies as Investment Options Hatice Tekiner-Mogulkoc, Assist. Professor, Istanbul Sehir University, Industrial Engineering, College of Engineering and Natural Sci, Istanbul, 34662, Turkey, haticetekiner@sehir.edu.tr, David Coit, Frank A. Felder
Generation expansion planning (GEP) problems are solved to determine the time, location and type of the new generations units to be installed in the power system.There are also new technological developments called Smart Grid technologies which can be used within the power grid.We propose models to incorporate Smart Grid technologies into the GEP problem to determine their optimal implementation planning and to observe their impact on the other expansion and dispatching decisions.
3 - Reserve Zone Partitioning Joshua Lyon, Graduate Student, Arizona State University, P.O. Box 878809, Tempe, United States of America, Joshua.Lyon@asu.edu, Kory Hedman, Muhong Zhang
In the power grid, reserve levels and reserve zones are integral to maintain reliability. The current methods to determine reserve zones are limited. In this work, we propose a formulation that embeds zone partitioning and reserve requirements into the unit commitment problem. The approach progresses on current reserve zone practices while avoiding much of the computational burden associated with stochastic unit commitment.
2 - A Universal Correlation Coefficient Xuan Huang, Assistant Professor, University of Alabama at Birmingham, 400 Birchall ln. Apt 203, Hoover, AL, 35226, United States of America, xuanh@uab.edu, Nuo Xu
A universal correlation coefficient is developed based on the deviation of the average first difference on the ranked data from its expected value. Such an index can detect degree of randomness irrespective of form of dependency and provides as a commensurate correlation coefficient among pairs of variables. A comparative study on a simulated dataset is presented to show its generality over other correlation coefficients.
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H - Mecklenburg Hall - 3rd Floor
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Joint Session Analytics/CPMS: Descriptive Analytics

Sponsor: Analytics/CPMS, The Practice Section of INFORMS Sponsored Session
Chair: Manoj Chari, Sr. Director, OR R&D, SAS Institute, 100 SAS Campus Drive, Cary, NC, 27513, United States of America, Manoj.Chari@sas.com 1 - Descriptive Analytics and OR Irv Lustig, Business Unit Executive, Optimization and Supply Chain Client Technical Professionals Leader, IBM, 25 Sylvan Way, Short Hills, NJ, 07078, United States of America, irv@us.ibm.com
We will give a short introduction to descriptive analytics, and describe some relationships to work that operations research practitioners do on a regular basis. If you analyze and visualize data, youre doing descriptive analytics, whether you know it or not!
3 - Scope in/Scope Out: The Use of Simulation in Patient Flow Redesign Douglas Fuller, Principal Consultant, Priority Perspective, 132 Feather Falls Circle, Suite B, Folsom, CA, 95630, United States of America, doug.fuller@priorityperspective.com, Anne Fuller
The Endoscopy department at Barnes Jewish Hospital felt that they had the opportunity to significantly increase their volume if they expanded their capacity for procedures. As a prerequisite, the CFO required that an analysis of the current patient flow be conducted to see if capacity to be gained from a redesign. This study examines the use of simulation in the project. It focuses on the challenges of acceptance of the tool by the clinic staff as well as the surprising results of the study.
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W - Providence I- Lobby Level
Modified Trajectory Impacts

Chair: Marc Rose, Senior OR Analyst, MCR, LLC, 425 3rd Street, SW, Suite 700, Washington, DC, 20021, United States of America, mrose@mcri.com 1 - Rushing to Wait; Slowing Down to Save Marc Rose, Senior OR Analyst, MCR, LLC, 425 3rd Street, SW, Suite 700, Washington, DC, 20021, United States of America, mrose@mcri.com, Dave Knorr, John Gulding
In absorbing terminal delay many flights are forced to take longer routes, level off at various altitudes, have circular holding, etc. Earlier an estimate of the pool of these delays was provided (elimination of level-offs and circuitous routing). In this segment we will present the possibility of moving a portion of this excess terminal time to the cruise phase of flight, saving fuel by slower speeds. Minimum cruise times and look ahead were examined parametrically.
2 - Unlocking the Hidden Value in Your Data with Analytics Tonya Balan, Senior Manager, Analytical Product Management, SAS Institute, Cary, NC, United States of America, Tonya.Balan@sas.com
Organizations today are overwhelmed with data transactional data, demographic data, data from social media and web sources, and more. It is critical to understand how the information locked in that data can be leveraged to drive actionable decisions for the business. Analytics is the key that can unlock that hidden value. This presentation provides an overview of analytical methods with a focus on applications of those methods to solve specific business problems.
3 - Descriptive Analytics via a CFO Dashboard Morris Treadway, Vice President-NA BIPM Leader, IBM, Yorktown Heights, NY, United States of America, morris.treadway@us.ibm.com
Descriptive analytics will be illustrated via the CFO Dashboard. It leverages a companys data sources to report on actual, plan, and forecast finance KPIs in an executive dashboard format. The package includes detailed drill down reporting capability based on the key metrics, encompassing a value driver tree to better diagnose problem areas. It provides an ability to generate insight from data sets, helping track organization performance and adjust forecast KPIs through what if analysis.
2 - Estimating ATM Efficiency Pools in the Descent Phase of Flight John Gulding, FAA, 600 Indpendence Avenue, Washington, DC, United States of America, John.Gulding@faa.gov
This paper focuses on a methodology for estimating the total benefit pools that ATM can potentially influence. This paper explores the benefits of reducing speed in cruise to absorb delays currently managed in the terminal area. Our findings estimate the unimpeded benefit pool in the terminal area averages 3 minutes for the top 34 airports in both US and Europe, or approximately 120 Kg. per flight.
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H - Biltmore Boardroom - 2nd Floor
Patient Flow
Contributed Session
Chair: Douglas Fuller, Principal Consultant, Priority Perspective, 132 Feather Falls Circle, Suite B, Folsom, CA, 95630, United States of America, doug.fuller@priorityperspective.com 1 - Determining Patient Flow and Resource Utilization Monica Puertas, University of South Florida, 4202 East Fowler Avenue, Tampa, United States of America, mpuertas@mail.usf.edu, Bo Zeng, Jos L. Zayas-Castro, Peter Fabri, Courtney Feliciani, Serkan Gunpinar
The care of patients with multiple injuries demands a large amount of time and the majority requires total care over multiple stages. Such a complex situation requires: a decision support tool to design a well-planned treatment path achieving the goal of safety, quality and progression; and sufficient and wellmanaged resources. The purpose of this work is to apply healthcare systems engineering methods to improve the delivery of care, leading to a team-based care delivery frame.
3 - Importance Assignment of Metric Components Marc Rose, Senior OR Analyst, MCR, LLC, 425 3rd Street, SW, Suite 700, Washington, DC, 20021, United States of America, mrose@mcri.com
A discussion of different methods of assigning importance to metrics composed of multiple sub-group. For example system level average delay/flight can be broken down by airport, carrier, etc. For data analysis it can be vital to understand the drivers by these sub-groups. I will provide a couple of methods, each of which have strengths and weakness. My hope is to provide food for group discussion.
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W - Providence II - Lobby Level
Joint Session MAS/DAS: Military Decision Analysis

Sponsor: Military Applications Society/ Decision Analysis Sponsored Session
Chair: Gregory Parnell, Distinguished Visiting Professor, United States Air Force Academy, Department of Management, 2354 Fairchild Drive, Suite 6H130, USAF Academy, CO, 80840, United States of America, greg.parnell@gmail.com 1 - Measurement for National Security Analysis: Theory, Best Practices and an Illustrative Example Gregory Parnell, Distinguished Visiting Professor, United States Air Force Academy, Department of Management, 2354 Fairchild Drive, Suite 6H130, USAF Academy, CO, 80840, United States of America, greg.parnell@gmail.com
The presentation will review the use of measures in national security analysis drawing on insights from several disciplines. I will proposed a systems thinking framework for measure development and illustrate the concepts using a study on Metrics for Cooperative Threat Reduction.
2 - Modeling Patient Flow in a Cardiac Intensive Care Unit (CICU) Yazan Roumani, University of Pittsburgh, 233 Mervis Hall, Pittsburgh, PA, 15260, United States of America, yfr1@pitt.edu, Luis Vargas
Intensive Care Units (ICUs) operate at a high level of occupancy and this leads to longer waiting times in the upstream units and lower patient throughput. Studying patient flow can help in identifying sources of congestion and therefore in improving patient throughput. We build a queueing network model of patient flow in a Cardiac Intensive Care Unit (CICU) using discrete event simulation. We also validate our model using real patient flow data that was collected over four years.
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W - College Room - 2nd Floor
2 - Interdiction Analysis of a Thinking Enemy Lee Ewing, Research Associate Professor of Operations Research, Naval Postgraduate School, 1411 Cunningham Rd., Monterey, CA, 93943, United States of America, plewing@nps.edu
We developed a model to assist various agencies and units in requests for analysis related to disruption of fighter-flow across border areas to specific destinations in both Iraq and Afghanistan. The infiltrator determines a path-selection strategy that minimizes the interdiction probability while the interdictor determines a checkpoint assignment that maximizes the infiltrators overall detection probability.
Joint Session OPT-LP/OPT-IP: New Relaxations of Binary Quadratic and Multi-Objective Integer Programs
Sponsor: Optimization Linear Programming and Complementarity/Optimization Integer Programming Sponsored Session
Chair: Alexander Engau, Assistant Professor, University of Colorado Denver, 1250 14th Street Suite 600, Campus Box 170, P.O. Box 173364, Denver, CO, 80217-3364, United States of America, alexander.engau@ucdenver.edu 1 - Semi-definite Relaxation of Quadratic Assignment Problems based on Nonredundant Matrix Splitting Tao Zhu, U of Illinois at Urbana-Champaign, Department of Industrial and Enterprise, Urbana, IL, 61801, United States of America, taozhu1@illinois.edu, Hezhi Luo, Jiming Peng
Recently, a new class of semi-definite relaxations for QAPs based on matrix splitting has been shown to be strong yet cheap to compute. In this work, we consider the issue of how to choose a matrix splitting scheme so that the resulting relaxation can provide strong bounds.
3 - Survey of Value-focused Thinking: Applications, Research Developments, and Areas for Future Research Dave Hughes, Department of Systems Engineering, Mahan Hall, Bldg 752, West Point, NY, 10996, United States of America, David.Hughes@usma.edu
We wrote this paper to identify significant developments, themes, and streams of research in the area of value-focused thinking (VFT). We searched key operations research and decision analysis journals as well as Google Scholar to find relevant articles that reference Keeneys 1992 book, Value-Focused Thinking: A Path to Creative Decisionmaking. This review is comprehensive, unbiased, and focuses on articles written after Keeneys book was published through the end of 2010.
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W - Providence III - Lobby Level
IT Service Outsourcing
Sponsor: Service Science Sponsored Session
Chair: William Rand, University of Maryland, College Park, MD, wrand@umd.edu 1 - On Dynamic Resource Allocation in IT Outsourcing Projects William Rand, wrand@umd.edu, Anand Gopal, Balaji Koka
Within the context of IT outsourcing, we focus on the interaction between managers, their portfolio of projects, and the strategic type of the firm they operate within, and argue that some project are better suited for certain combinations of these elements than others. We assume that different strategic types affect project size variance, and that these types also affect how firms deal with interruptions and how they prioritize projects. We use an agent-based model to explore this interaction.
2 - Nonconvex Quadratic Reformulation and Second Order Sufficient Global Optimality Condition for Binar Ye Tian, North Carolina State University, 443 Daniels Hall, I.S.E., NCSU, Raleigh, NC, 27695, United States of America, ytian4@ncsu.edu
In this talk, we will present a mixed integer constrained quadratic programming problem. By reformulating the problem to a box constrained quadratic programming and solving the reformulated problem, we can obtain a global optimal solution of a sub-class of the original problem. Moreover we propose a solvability condition for the reformulated problem, and discuss methods to construct a solvable reformulation for the original problem.
3 - Two Phased Approximation Algorithm for Multi Objective Integer Problems Ozgu Turgut, Graduate Research Assistant, Wayne State University, 4815 4th Street, Detroit, MI, 48202, United States of America, ozgu.turgut@gmail.com, Alper Murat
In this study, generating representative sets for multi objective integer programming problem is considered. The proposed algorithm has two phases. In second phase, a modified version of branch and bound technique is applied to the solutions obtained by solving the relaxed problem with a certain scalarization. Outputs of the first phase are used to fathom the branches. Comparative results will be presented.
2 - Design and Analysis of a Two-Stage Service Outsourcing Process Walter Yund, yundw@rpi.edu, Jennifer Ryan, Yue Jin
We study two-stage outsourcing processes commonly used in process outsourcing, in which vendors are qualified in the first stage and compete in the second stage. We present a model of this process and gather insights that will enable procurement managers to understand interactions between the stages of the procurement process.
3 - External Technology Supply and Client-side Innovation Christian Peukert, Ludwig-Maximilians-University Munich, Schackstr. 4, Mnchen, Germany, c.peukert@lmu.de
We employ a stylized theoretical model to derive hypotheses for the empirical analysis of the role of IT outsourcing in product and process innovation. Estimation results based on German firm-level data suggest that IT outsourcing has positive effects on both types of innovation. For product innovation we find a hump-shape.
4 - Quadratic Relaxations of Binary Integer Programs in Computational Biology Alexander Engau, Assistant Professor, University of Colorado Denver, 1250 14th Street Suite 600, Campus Box 170, P.O. Box 173364, Denver, CO, 80217-3364, United States of America, alexander.engau@ucdenver.edu
We present several recent integer programming models in molecular biology and discuss practical reformulations and relaxation approaches to compute solutions to some of these problems. Truly large in scale, techniques are taken from interior-point, bundle, and Lagrangean methods for semidefinite relaxations and heuristic approaches for the original integer programs.
4 - Implementing the Revised FMEA in Service Outsourcing Quality Analysis Ya-Hui Chan, Chung Hua University, 707, Sec.2, WuFu Rd., Hsinchu, Taiwan, Hsinchu, Taiwan - ROC, silvia_219@yahoo.com.tw, Shu-Ping Lin
Service outsourcing is a rapidly growing phenomenon in global business. As services attached with greater uncertainties, the risk management of the potential service failure modes will need more attention. Accordingly, this study aims at proposing a risk analysis approach based on FMEA for service outsourcing quality monitor and control.
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W - Sharon Room - 2nd Floor
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Traffic Planning
Contributed Session
Chair: Wenxin Qiao, University of Maryland - College Park, 1173 Glenn Martin Hall, College Park, MD, 20742, United States of America, wxqiao@umd.edu 1 - Trip Maximization: A New Objective Function for Traffic Signal Timing Optimization Problem Ali Hajbabaie, Graduate Research Assitant, University Of Illinois at Urbana Champaign, 205 N mathwes Avenue, room 3150, Urbana, IL, 61801, United States of America, ahajbab2@illinois.edu, Rahim Benekohal
In traffic signal timing optimization problem, delay minimization and throughput maximization have been widely used. In this study, we introduce a new objective function: maximizing the number of trips completed in the network. The advantages of this objective function over the others are discussed. In addition, near-optimal signal timing parameters associated with these three objective functions are found in a case study network where network performance measures are determined and compared.
3 - Nash Equilibrium Model for Micro-storage Management in the Smart Grid Pando Georgiev, University of Florida, Gainesville, FL, United States of America, pandogeorgiev@ufl.edu, Alexey Sorokin, Marco Carvalho, Panos Pardalos
We propose a game theoretic approach for electricity market participants with storage devices by formulating a Nash equilibrium problem and proposing extensions for generalized Nash equilibrium. While the theory of the generalized Nash equilibrium is well developed, its computation is a challenge. In the simplest case, our model presents a Nash equilibrium problem with quadratic cost functions. It is attacked with several methods recently developed.
4 - Storage Operation and Investments in an Electrical System Santhosh Suresh, PhD Student, Ross School of Business, University of Michigan, 701 Tappan St, Ann Arbor, MI, 48109, United States of America, sssandy@umich.edu, Roman Kapuscinski, Owen Wu
Storage technology is becoming increasingly prevalent in todays electric grid. We discuss the optimal siting and sizing of storage units in a distribution network. The objective is to minimize overall operating costs accounting for transmission and storage losses. We show the degree of storage pooling to be related structurally with: the efficiency of storage and transmission, variance, correlation and mean in the demand distribution.
2 - Long-Term Incident Response Vehicle Dispatching Policy under Probabilistic Environment Cem Iyigun, Assistant Professor, Middle East Technical University, Inonu Blvd., Ankara, 06800, Turkey, iyigun@ie.metu.edu.tr, Kaan Ozbay
This study proposes a long-term incident response vehicle dispatching policy in a probabilistic environment. The uncertainty in incident occurrence rate, travel time, response vehicle availability, and response vehicle requirements are included in the vehicle dispatching problem using stochastic programming approach. Concepts such as level of service, reliability, and road network performance are introduced to the stochastic incident response problem via probabilistic constraints.
5 - Smart Grid: Optimization Methods for Demand Response Systems G N Srinivasa Prasanna, International Institute of Information Technology, Electronics City, Hosur Road, Bangalore, India, 560100, India, gnsprasanna@iiitb.ac.in, Sunil Vuppala
In this presentation, we discuss optimization algorithms, for real time control of smart electric grid systems. Fine grain grid power flow measurements, yield sufficient state observability for individual appliance level control. We present analytical and simulation results on a optimizing demand response system evaluated on cost, fairness, and ability to handle demand uncertainty.
3 - Short Term Travel Time Prediction Considering Weather Impact Wenxin Qiao, University of Maryland - College Park, 1173 Glenn Martin Hall, College Park, MD, 20742, United States of America, wxqiao@umd.edu, Ali Haghani, Masoud Hamedi
Reliable travel time prediction enables both user and system controller to be well informed of the future conditions on roadways, so that pre-trip plans and traffic control strategies can be made accordingly. This research focuses on short-term travel time prediction for freeways using real-time traffic and weather data sources. The integrated model incorporates various weather parameters in the prediction process with special consideration to inclement weather conditions.
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W - Tryon North - 2nd Floor
Advances in Preference Modeling for MCDM

Sponsor: Multiple Criteria Decision Making Sponsored Session
Chair: Gilberto Montibeller, Lecturer, Decision Sciences, London School of Economics, Houghton Street, London, WC2A 2AE, United Kingdom, G.Montibeller@lse.ac.uk 1 - Modeling Dynamic Preferences of Malicious Agents Sumitra Sribhashyam, LSE, Management Science Group, Houghton Street, London, WC2A 2AE, United Kingdom, S.Sribhashyam@lse.ac.uk, Gilberto Montibeller
Traditional decision analysis assumes the availability of a decision maker to model preferences, but if one wants to infer those of inaccessible agents, such as terrorists, it is necessary to explore how preferences evolve over time. Using multi-attribute utility theory we suggest modeling dynamic preferences of a malicious agent by incorporating state dependent weights to account for preference change caused by exogenous triggers. We explore its use in the context of counter-terrorism analysis.
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W - Independence Room - 2nd Floor
Issues in the Energy Grid

Contributed Session
Chair: G N Srinivasa Prasanna, International Institute of Information Technology, Electronics City, Hosur Road, Bangalore, India, 560100, India, gnsprasanna@iiitb.ac.in 1 - Bayesian Techniques for U.S. Electricity Grid Monitoring Robert Love, Associate, Booz Allen Hamilton, 22 Batterymarch Street, Boston, MA, 02109, United States of America, love_robert@bah.com
The current U.S. Electricity Grid operates under capacity constraints that result in distribution chokepoints, shortages, and blackouts, costing consumers billions of dollars. Prevailing mathematical methods for assessing these inefficiencies are regression based, and limited in their ability to assess peak load conditions. Models that leverage Bayesian inference are proposed as a way to assess and enable proactive mitigation strategies that reduce peak load through demand response.
2 - A Diagnostics Tool for Assessing Decision Making Effectiveness K. Nadia Papamichail, Senior Lecturer in Information and Decision Systems, Manchester Business School, Booth Street East, Manchester, M15 6PB, United Kingdom, nadia.papamichail@mbs.ac.uk
This paper presents a framework and an analytical diagnostics tool for assessing decision making performance in projects. The tool is an intelligent decisionmaking support system that combines the analytical capabilities of multiple criteria decision analysis with the reasoning functionalities of artificial intelligence techniques. It is intended to periodically review decision making effectiveness and communicate its results in natural language form.
2 - Integration of Operational and Strategic Decisions for Power-intensive Processes in the Smart Grid Sumit Mitra, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, sumitm@andrew.cmu.edu, Ignacio Grossmann, Jose M. Pinto, Nikhil Arora
In presence of fluctuating electricity prices, the smart grid provides optimization opportunities for power-intensive processes. We present a framework that integrates operational and strategic decision-making. The strategic decisions involve capacity expansions and equipment upgrades that potentially facilitate cost savings on the operational level. We show the efficiency of our optimization model for power-intensive processes such as air separation and cement plants based on industrial data.
3 - Representing Equitable Preferences Alec Morton, London School of Economics, Houghton Street, London, WC2A 2AE, United Kingdom, A.Morton@lse.ac.uk, Nikos Argyris, Ozlem Karsu
Decision makers often have preferences for equity in distribution. From a modelling point of view this can be handled by imposing person anonymity and quasiconcavity conditions on the model of the DMs preferences. In this talk, we study how equity considerations can be introduced into multicriteria models, and show how to incorporate information which the DM may have given us (for example that she prefers one distribution to another) in the preference model.
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4 - Modeling Preferences under Deep Uncertainty Gilberto Montibeller, Lecturer, Decision Sciences, London School of Economics, Houghton Street, London, WC2A 2AE, United Kingdom, G.Montibeller@lse.ac.uk, Camelia Ram
Decisions under deep uncertainty, when a mutually-exclusive and exhaustive set of outcomes for the decision alternatives cannot be defined, pose a challenge to decision analysts. In this talk we argue that scenario planning might be a useful way of analyzing strategic options and suggest that preferences are scenariodependent. We review ways of evaluating options under multiple scenarios and conflicting objectives, suggesting some extensions which are illustrated in realworld applications.
Operations and Supply Chains

Contributed Session
Chair: Xuili He, Assistant Professor, UNC-Charlotte, 9201 University City Blvd, BISOM Department, Charlotte, NC, 28269, United States of America, xhe8@uncc.edu 1 - Coordinating a Two Stage Supply Chain with Option for Outsourcing Decisions in Insufficient Capacity Changhyun Kim, Doctorate Student, Drexel University, 101 N 33rd Street, Room #229, Department of Decision Sciences, Philadelphia, 19104, United States of America, changhyun.kim@drexel.edu
This paper illustrates the individual decision making and the coordinated policy in a supply chain that consists of lost sales cases through supply chain integration. In this paper, an individual decision making model for overcome the shortage, and a coordinated model with considering capacity levels and quality have been derived and compared. A numerical example demonstrates the effectiveness of the model for the outsourcing decisions and the revenue sharing of the channel.
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W - Queens Room - 2nd Floor
Joint Session SPPSN/LAW: Problems in Real-World OR

Sponsor: Public Programs, Service and Needs/Law, Law Enforcement and Public Policy Sponsored Session
Chair: John Hall, Division DirectorFire Analysis, NFPA, 1 Batterymarch Park, Quincy, MA, 021697471, United States of America, jhall@nfpa.org 1 - Trade-offs That Should be Made Explicitly but Arent John Hall, Division DirectorFire Analysis, NFPA, 1 Batterymarch Park, Quincy, MA, 021697471, United States of America, jhall@nfpa.org
In public sector OR, effectiveness often depends on multiple aspects, e.g., performance vs. reliability or effectiveness vs. universality. Even a good program wont yield good outcomes if no one has access or implementation often goes off track. However, program analysis often focuses on base performance as if other aspects dont matter or are assured. This paper will discuss how to make such trade-offs more explicit and better.
2 - Improve the Intangible Service Quality and Revenue in Decentralized Service Chain Shiming Deng, Professor, Huazhong University of Science and Technology, 1037 Luo Yu Rd, Wuhan, 430074, China, smdeng@mail.hust.edu.cn
The decentralized service chains we consider consist of an brand service provider and a local store. The service provider receives orders from Internet and relies on local store to deliver the service. The intangible nature of service quality make it a core issue for the service provider to motivate the local store to keep a high service quality. We study how brand service provider can use customer satisfaction to improve service quality without expanding their promotion footprint.
2 - The Math Works, The Reality Doesnt - Tales of Woe from Unrealistic Modeling John Hollywood, Operations Researcher, RAND Corporation, 1200 South Hayes Street, Arlington, VA, 22202, United States of America, johnsh@rand.org
We consider possible consequences when the modeler does not know (or care) enough about the application area to develop a sufficiently realistic model. Examples are drawn from law enforcement, homeland security, and defense. We also consider some possible incentives to improve modeling realism, and how the Analytics initiative might contribute.
3 - Channel Decision and Service-Product Bundling Strategy under Sequential Entry Xuili He, Assistant Professor, UNC-Charlotte, 9201 University City Blvd, BISOM Department, Charlotte, NC, 28269, United States of America, xhe8@uncc.edu, Shu Zhou
A manufacturer produces and sells a product to an incumbent service provider (ISP ) who sells the bundle of the product and services to the end consumers. A potential entrant service provider (ESP) offers a bundle of competitive service and product. We study the manufacturers channel decisions of whether to sell through the ESP. We also study the completive pricing and bundling strategies of ISP and ESP.
3 - The Editor, AIDS, and Columbine: Deciding When to Decide Doug Samuelson, President, InfoLogix, Inc., 8711 Chippendale Court, Annandale, VA, 22003, United States of America, samuelsondoug@yahoo.com
The most insidious and powerful source of bias in scientific studies and more general reporting is the process by which we decide what to study. The second worst culprit is the process by which we decide when we have enough information to make a decision, balancing sensitivity (react when appropriate) versus specificity (not reacting when reacting is inappropriate.) Real-life policyrelated examples include the responses to the Columbine shootings, AIDS screening, and the invasion of Iraq.
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W - Park Room - 2nd Floor
Analytics Tools for Logistics I

Contributed Session
Chair: Saurabh Chandra, Indian Institute of Management Lucknow, Prabandh Nagar, Off Sitapur Road, Lucknow, 226013, India, saurabh.c.pathak@iiml.org 1 - A Container Yard Storage Strategy for Improving Land Utilization in a Transshipment Hub Port Xinjia Jiang, National University of Singapore, 10 Kent Ridge Crescent, Industrial and Systems Engineering, Singapore, 119260, Singapore, xinjia@nus.edu.sg, Kok-Choon Tan, Loo Hay Lee, Ek Peng Chew
This paper studies the storage yard management problem in a busy transshipment hub, where intense loading and unloading activities have to be considered at the same time. The need to handle huge volumes of container traffic and the scarcity of land in the container port area pose serious challenges for the port operator. A new approach named space-sharing yard template planning, is studied to balance the equipment productivity and the land usage when the consignment strategy is implemented.
4 - When the Client is Biased, Delusional or Unethical John Hall, Division DirectorFire Analysis, NFPA, 1 Batterymarch Park, Quincy, MA, 021697471, United States of America, jhall@nfpa.org
Ethics in a profession are not like ethics anywhere else. A lawyer can mislead or deceive in an adversarial position, but should an OR analyst do the same in a non-adversarial process, even if the client demands it? In public sector OR, there is the added complication of reflexively pro-management or anti-government OR professionals injecting biases and myths that they and the client share. No answers but discussion of issues.
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2 - Collaboration Among Small Shippers in a Transportation Market Secil Savasaneril, Asst.ProfessorDr., Middle East Technical University, Department of Industrial Engineering, Ankara, Turkey, secil@ie.metu.edu.tr, Ozhan Yilmaz
We study the coalition formation among small shippers in a transportation market characterized by uncertain demand. We study the effect of shipper characteristics on the benefit of collaboration. Analysis shows that the shippers always benefit from the coalition, but when the benefits are to be allocated, the coalition may not always guarantee the budget balance. Using a game theoretical approach we propose saving allocation mechanisms and discuss the conditions that lead to a balanced budget.
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total system is able to generate moves under more realistic circumstances. The system, using Fuzzy Logic concepts and a Particle Swarm Optimization (PSO) search algorithm, generates a smaller and more focused search tree than traditional algorithms.
3 - Resource Pooling and Cost Allocation Among Independent Service Providers Frank Karsten, Eindhoven University of Technology, P.O. Box 513, Eindhoven, Netherlands, f.j.p.karsten@tue.nl, Geert-Jan van Houtum, Marco Slikker
We apply concepts from cooperative game theory to study the problem of fair allocation of shared costs in multi-server systems. Each coalition of players collaborates by complete pooling of resources and individual customer streams into a joint M/M/c queue. We consider server costs and delay costs. In both cases studied, with fixed numbers of servers and optimal numbers of servers, we examine the existence of core allocations that can be reached through a population monotonic allocation scheme.
3 - Allocating Freight Costs in Cooperative Load Sharing Agreements Don Warsing, Associate Professor, North Carolina State University, 2346 Nelson Hall, Raleigh, NC, 27695, United States of America, don_warsing@ncsu.edu, Michael Kay
What we call cooperative load sharing is related to two other important problems, the joint replenishment problem and the cooperative inventory game. In cooperative load sharing, however, the fixed cost of shipping depends on the composition of the coalition, and shippers may benefit from forming varying coalitions over time, altering their shipment frequency. We propose a solution approach to address these complications, and we demonstrate its application.
4 - Cost Allocation in City Logistics Stefan Engevall, Associated Professor, Linkping University, Department of Science and Technology, ITN, Norrkoping, 60174, Sweden, stefan.engevall@liu.se
In this paper a cost allocation problem in a city logistics situation is studied. In a City Distribution Center (CDC) setting, it may be necessary to allocate common costs to the participants. In this paper, as a mean to allocate costs, a number of alternative cooperative games are formulated and discussed, including or excluding the costs associated to the CDC, and including or excluding the operator of the CDC as a player. The Shapleyvalue and the nucleolus are computed for numerical examples.
4 - Real-time Ordering Quantity Control in Logistics Management with Uncertainty Jia Gao, City University of Hong Kong, Dep. of Management Sciences, 7/F, Academic Building, City University of HK, Hong Kong, Hong Kong - PRC, gjtina@cityu.edu.hk, Lawrence C. Leung, Yer Van Hui
New shipment monitoring systems with real-time tracking capability, such as Control Tower, have become popular in freight forwarding industry. We formulate the replenishment problem with uncertainty in the context of modern logistics management. Adopting the real-time SPC concept, we construct a continuous stochastic model to derive the optimal ordering strategy. Impacts of different types of information on the final solution and managerial insights in decision making are discussed.
5 - Sharing Isnt Easy: On Strategyproof Mechanisms for Sharing the Costs of Linear Programs Nelson Uhan, School of Industrial Engineering, Purdue University, 315 N. Grant Street, Grissom Hall 308, West Lafayette, IN, 47907, United States of America, nuhan@purdue.edu
We study linear programming (LP) games, an important class of cooperative games that model a myriad of cost sharing problems, including those from logistics, network design, and homeland security. We give an approximately budget-balanced and approximately efficient group strategyproof cost sharing mechanism for these games. In addition, we give impossibility results for the budget-balancedness and computational complexity of various classes of strategyproof cost sharing mechanisms for LP games.
5 - Automotive Maritime Logistics: An Application of Inventory Maritime Problem Saurabh Chandra, Indian Institute of Management Lucknow, Prabandh Nagar, Off Sitapur Road, Lucknow, 226013, India, saurabh.c.pathak@iiml.org, Rajiv Srivastava
The problem deals with logistics management planning of various finished automobiles exported/imported across countries. The Logistics provider is responsible for maritime transportation planning along with stock management at the ports. It has been taken as an extension to maritime inventory routing problemwith the proposed inclusion of inventory costs at ports, spot cargoes etc, as per problem scenario.
WA68
W - Grand B - 2nd Floor
Game Theory in Supply Chain

Contributed Session
Chair: Fouad El Ouardighi, Professor, ESSEC Business School, Avenue Bernard Hirsch, B.P. 105, Cergy Pontoise, 95021, France, elouardighi@essec.fr 1 - Dual Functionalities of Acceptance Sampling Plans in a Supply Chain with Endogenous Product Quality Tian Ni, Assistant Professor, Purdue University, 315 N. Grant Street, West Lafayette, IN, 47907, United States of America, ni10@purdue.edu, Xiaowei Xu, Hong Wan
This paper studies a firm that procures a product from a supplier. The firm determines the acceptance sampling plan and the supplier determines the quality effort level in a simultaneous game. We identify the Nash equilibrium form and provide sufficient conditions of the existence of a pure strategy Nash equilibrium. Sensitivity analysis of the optimal sample size, rejection threshold and quality effort level is conducted as well.
WA67
W - Grand A - 2nd Floor
Game Theory: Strategy and Cost Sharing

Contributed Session
Chair: Nelson Uhan, School of Industrial Engineering, Purdue University, 315 N. Grant Street, Grissom Hall 308, West Lafayette, IN, 47907, United States of America, nuhan@purdue.edu 1 - Strategy Selection and Strategy Discovery: Principles and overview Steve Kimbrough, University of Pennsylvania, 3730 Walnut St., Philadelphia, PA, 19004, United States of America, kimbrough@wharton.upenn.edu
Given a consideration set of strategies, players in a game face the problem of selecting which strategies they will actually play. Given a strategic situation, players in a game face the problem of discovering good strategies to consider for play. This talk illustrates these problems on games of practical import, and presents results based on innovative tournament designs as well as machine learning, using agent-based models, evolutionary computation, and other metaheuristics.
2 - Biform Game: Reflection as a Stochastic Programming Problem Nichalin Summerfield, The University of Arizona, MIS Department, 1130 E. Helen St., Tucson, AZ, 85721, United States of America, nichalin@email.arizona.edu, Moshe Dror
In this paper we examine the biform games modeling framework. More specifically, we recast biform games as two-stage stochastic programming with recourse. The two-stage stochastic programming view of biform games is demonstrated on various known examples regarding operational decision problems of competing firms from the literature. It allows an old mathematical methodology to showcase its versatility in modeling combined competitive and cooperative game options.
2 - Finding Strategies in Adversarial Situations Stephany Coffman-Wolph, PhD Student, Western Michigan University, 11704 Landers Drive, Plymouth, MI, 48170, United States of America, stephany.s.coffman-wolph@wmich.edu
The development of a hierarchical system containing separate sub-systems for each side in an adversarial gaming situation based on the concepts introduced in Linguistic Geometry (LG) will be presented. By using separate sub-systems, the
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WA69

4 - Formal Waste Recovery Systems and Scavengers: Symbiotic or Conflicting? Maria Besiou, Postdoctoral Fellow, INSEAD, Social Innovation Centre, Fontainebleau, France, Maria.Besiou@insead.edu, Luk Van Wassenhove, Patroklos Georgiadis
Formal waste systems displace collection of used products by scavengers. However, scavenging still exists, especially in places with low living standards. Informal recycling of waste electrical and electronic equipment constrains profits of the formal system and pollutes the environment. Using system dynamics we reveal that incorporating scavengers into the formal system (instead of ignoring/prohibiting their participation) is beneficial for economical, environmental and social sustainability.
3 - Integrating Options with B2B Online Spot Market for Equilibrium Strategies in Supply Chain Xiaolan You, Xian Jiaotong University, School of Management, No.28, Xianning West Road, Xian, China, xiaolan.youyou@stu.xjtu.edu.cn, Gengzhong Feng, Wei Jiang
Considering a supply chain consisting of a manufacturer, a retailer and a thirdparty B2B online spot market, this paper derives the manufacturers optimal bidding strategy for options and the retailers optimal procurement strategy in a Stackelberg game with the manufacturer as the leader. In the case of uniform distribution, the impact of market liquidity on the profits of all participants in the supply chain is discussed.
4 - Production Capacity and Pricing Equilibrium Strategies in a Supply Chain Fouad El Ouardighi, Professor, ESSEC Business School, Avenue Bernard Hirsch, B.P. 105, Cergy Pontoise, 95021, France, elouardighi@essec.fr, Bowon Kim
We develop a differential game model to determine how a manufacturer and its supplier should determine their production capacities and pricing policies to maximize their profits over an infinite planning horizon. We derive the cooperative equilibrium, and the open-loop and closed-loop Nash equilibria. In order to contrast the myopic and far-sighted behaviours of the supply chains members, we compare the dynamic and the static solutions of the game.
Wednesday, 11:00am - 12:30pm

WB01
C - Room 201A
Robust Dynamic Optimization and Learning with Applications in Inventory and Revenue Management
Chair: Dan Iancu, Assistant Professor, Stanford University, Stanford, CA, United States of America, Iancu_Dan@GSB.Stanford.Edu 1 - Achieving Targets Dynamically Melvyn Sim, National University of Singapore, Mochtar Riady Building, BIZ 1, 8-76 15 Kent Ridge Drive, Singapore, melvynsim@nus.edu.sg, Zhuoyu Long, Lucy Chen
We consider a dynamic optimization problem in which the periodic payoffs are potentially uncertain and the decision maker desires a policy where the income stream can achieve some specified targets in these periods under uncertainty. We propose a new measure for examining how well a random income stream can meet targets dynamically. We show how this measure can be optimized by solving a converging sequence of dynamic optimization problem.
WA69
Economics of Reverse Logistics

Chair: Canan Savaskan, Southern Methodist University, Cox School of Business, Dallas, TX, United States of America, csavaskan@cox.smu.edu 1 - Managing Returns of Experience Goods with Dishonest Customers Michael Galbreth, Asisstant Professor, Moore School of Business, United States of America, galbreth@moore.sc.edu, Bikram Ghosh, Guangzhi Shang
Customers value the ability to return a defect-free item when there is some probability that, after a trial period, they will find that it does not fit their needs. Dishonest customers might act as returns abusers, using the trial to extract value rather than assess fit. Retailers can use restocking fees to deter dishonest customers, but these will also impact the purchase decisions of honest customers. We provide insights into the pricing and restocking fees of retailers in this context.
2 - A Learning-while-doing Algorithm for a Class of Single-product Revenue Management Problems Zizhuo Wang, Stanford University, 314T, Huang Engineering Building, Stanford, CA, 94305, United States of America, zzwang@stanford.edu, Yinyu Ye, Shiming Deng
We propose a dynamic learning-while-doing pricing algorithm for the single product revenue management problem. Our algorithm learns the optimal pricing policy on the fly without assuming any parametric form of the demand function. We show that our algorithm has the best possible performance in terms of asymptotic regret of revenue. It also closes the performance gap between parametric and non-parametric learning in previous works as well as the gap between auction and post-price mechanism.
2 - The Effect of Remanufacturing on the Perceived Value of New Products Atalay Atasu, Georgia Institute of Technology, Atlanta, GA, United States of America, atalay.atasu@mgt.gatech.edu, Vishal Agrawal
We experimentally investigate the effect of remanufactured products on the perceived value of new products. We find that the perceived value of an OEMs new product depends on who sells the remanufactured product: the perceived value decreases when the OEM sells the remanufactured product, but this effect reverses when a third-party sells remanufactured products. We then analytically investigate an OEMs competitive remanufacturing strategy in the presence of this effect.
3 - On the Power of Static Policies for Non-linear Adjustable Robust Optimization Problems Vineet Goyal, Assistant Professor, Columbia University, 500W 120th St, New York, NY, United States of America, vgoyal@ieor.columbia.edu, Dimitris Bertsimas
For a fairly general adjustable robust optimization problems with nonlinear constraints and nonlinear objective function where the uncertainty appears in both the constraint as well as objective functions, we show that a static solution provides a good approximation under fairly general assumptions. Our model applies to a wide variety of problems in revenue management, resource allocation under uncertainty, scheduling problems with uncertain processing times among many others.
3 - The Impact of Competition on Producer Responsibilities and Environment Hyoduk Shin, Assistant Professor, Northwestern University, Kellogg School of Management, Evanston, IL, 60201, United States of America, hyoduk-shin@kellogg.northwestern.edu, Jingqi Wang
We study how the downstream competition in a supply chain affects firms investment incentives for different producer responsibility regulations. We confirm that individual responsibility encourages more investment than collective responsibility, as shown in Atasu and Subramanian (2011). However, individual responsibility results in more production. Consequently, the average environmental costs depend on the level of competition, without the costefficiency of collective responsibility.
4 - Supermodularity and Dynamic Robust Optimization Dan Iancu, Assistant Professor, Stanford University, Stanford, CA, United States of America, Iancu_Dan@GSB.Stanford.Edu, Mayank Sharma, Maxim Sviridenko
In this talk, we discuss several dynamic robust optimization models (which include single product dynamic pricing, single-echelon inventory replenishment with arbitrary convex ordering and inventory costs), for which we prove that affine policies parameterized in the history of model disturbances are optimal. Our proof techniques rely on an interesting connection with the theory of supermodularity and concave envelopes, which may be of independent interest.
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INFORMS Charlotte 2011 WB02

C - Room 201B
WB04
Pricing II
Contributed Session
Chair: Ahmad Bajwa, Doctoral Student, University of Alabama, Tuscaloosa, Tuscaloosa, AL, 35406, United States of America, anbajwa@crimson.ua.edu 1 - Optimal Pricing and Advertising ia a Dynamic Durable Goods Supply Chain Anshuman Chutani, Visiting Assistant Professor, School of Management, Binghamton University, Ofice AA 274, School of Management, Binghamton University, P.O. Box 6000, Binghamton, NY, 13902, United States of America, achutani@binghamton.edu, Suresh P. Sethi
We study the case of a dynamic durable goods supply chain where a manufacturer sells his product through two independent and competing retailers. The problem is modeled as a Stackelberg differential game where the manufacturer announces his wholesale prices and his shares of advertising costs of the retailers or his subsidy rates, and the retailers in response play a Nash differential game in choosing their optimal retail prices and advertising efforts over time.
3 - A Finite-horizon Inventory Model with Multiple Replenishment Opportunities Nils Buch, N.C. State University, 400 Daniels Hall, Raleigh, NC, 27695, United States of America, nbuch@ncsu.edu, Russell E. King, Don Warsing, Anita Vila-Parrish
The literature on finite-horizon inventory models typically assumes that ordering cost is either fixed or zero. We present a multi-period, finite horizon model with a known demand distribution in each period. We characterize the optimal policy structure of the model, demonstrating that specifying the number of orders allowed across the horizon, with no explicit ordering cost, provides a useful marginal value of each additional order as an alternative to specifying an explicit ordering cost.
WB04
C - Room 202B
Applications of Network Optimization

Contributed Session
Chair: Benazir Portal, Student, Florida Atlantic University, 1675 NW 4th Avenue Apt. 812, Boca Raton, FL, 33432, United States of America, benazir833@hotmail.com 1 - Optimal Location of Electric-car Charging Stations Ali Haji Agha Bozorgi, University of Central Florida, 1927 Cuesta Dr. Apt 724D, Orlando, Fl, 32826, United States of America, alililihozak@yahoo.com, Mansooreh Mollaghasemi, Talayeh Razzaghi, Vernet Lasrado
In this model, we try to propose a fuzzy model for locating the charging stations for electrical cars. In the literature, there are some works on this, but they all assume a fixed, predetermined value for the vehicle range. Trying to make it more realistic, we use fuzzy value for that, which might affected by driving habits, the geography of the path, etc.
2 - Pricing with Production Learning and Strategic Consumer Behaviour Shilu Tong, University of New South Wales, Australian School of BusinessUni, University of New South Wales, Sydney, Australia, sl.tong@unsw.edu.au, Albert Y. Ha, Stephen Shum
We study the pricing problem of a firm that can reduce its production cost due to its learning capability during production. We show that, when facing strategic customers, the firm may not always benefit from higher production learning capability. We also compare the firms profit, consumer surplus and social welfare under different pricing policies.
3 - Coordinating Pricing and Production Decisions Ahmad Bajwa, Doctoral Student, University of Alabama, Tuscaloosa, Tuscaloosa, AL, 35406, United States of America, anbajwa@crimson.ua.edu, Charles Sox
Dynamic problem of joint pricing and production decisions for multiple products with setups and capacity constraints. Demand is decreasing in price with seasonality. Objective is to determine the optimal prices and production plan to maximize profit. We show that the nonlinear optimization problem can be modeled in terms of one dual variable. Optimal solution (satisfying KKT & saddle point) is found by using a one dimensional search procedure. Solution approach is independent of problem size.
2 - A Risk-minimization Network Flow Problem for Designing Safe Walking-routes for School Children Ken-ichi Tanaka, The University of Electro-Communications, 1-5-1, Chofugaoka, Chofu-shi, Tokyo, 182-8585, Japan, ken1tnk@se.uec.ac.jp, Ryuhei Miyashiro, Yuichiro Miyamoto
For school children to walk safely to and from school, it is desirable to walk in groups, not alone, while maintaining the route distance of each child within an acceptable level. This paper presents a network flow problem in which arc cost functions are non-increasing with the number of children and the length of each route is bounded. An integer programming formulation and some numerical solutions are presented. The network design version of the problem is also considered.
WB03
C - Room 202A
Inventory Management I
Contributed Session
Chair: Nils Buch, N.C. State University, 400 Daniels Hall, Raleigh, NC, 27695, United States of America, nbuch@ncsu.edu 1 - A Retail Inventory Policy for Time-dependent Cyclical Demand Joachim Ehrenthal, University of St.Gallen, Dufourstrasse 40a, St.Gallen, Switzerland, joachim.ehrenthal@unisg.ch, Tom Van Woensel, Thomas Gruen, Joerg Hofstetter
Fast-moving retail items follow a cyclical demand pattern depending on timing and marketing efforts. In our research, we observe the occurrence of intraday sales patterns. We therefore model an inventory policy accounting for intraday sales patterns by refitting the review period. We include lost sales, inventory holding and handling costs, and marketing efforts. Using actual transaction data, we compare this new policy to current practice, evaluating effects on customer service and total cost.
3 - Scenario-Scaping with Inverse Programming for Intermodal Transporation Christina Burt, Dr, Austrian Institute of Technology, Giefinggasse 2, Wien, 1210, Austria, christina.naomi.burt@gmail.com, Jakob Puchinger
We study an intermodal transportation problem over a long-term planning horizon where scenarios involving different equipment, location and network arcs are possible. We model the problem as a capacitated multi-commodity network flow problem and make use of inverse programming techniques to sketch the landscape of the uncertain scenario cost function to show when one scenario becomes preferable to another. We apply reduction, preprocessing and heuristic methods to solve some steps our procedure.
4 - Optimizing Shuttle Service for Minimum Cost Operation A Case Study in Florida Atlantic University Benazir Portal, Student, Florida Atlantic University, 1675 NW 4th Avenue Apt. 812, Boca Raton, FL, 33432, United States of America, benazir833@hotmail.com, Evangelos I. Kaisar
Florida Atlantic University first began classes conducting classes in 1964 in Boca Raton, FL as an upper-level school only. The parking issue came to the forefront of university issues at the beginning of Fall 09. FAU has implemented a shuttle system to encourage the use of remote access parking and to reduce congestion on campus. The intent of this project is to evaluate and make recommendations for the FAU shuttle system by optimizing the network for travel time, efficiency, and safety.
2 - Integrated Approach for a Single Vendor and a Single Buyer Inventory System of Deteriorated Items Sunghee Lee, Graduate student, Korea University, Room 516, Main Bldg. of Business school, Anam-dong, Seongbuk-gu, Seoul, Korea, Republic of, cool_scm@korea.ac.kr, Daeki Kim
A deteriorating property of products is one of the key points to note for practice and research in the inventory management. Although many priori articles involves various characteristics in their modeling, inventory loss from both imperfect quality caused by manufacturing process and deterioration has room to find more. Furthermore a simple remanufacturing policy chained with the inventory models is proposed with a rough assumption.
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WB06 WB06
C - Room 203B

C - Room 204
Scheduling and Timetabling

Contributed Session
Chair: Jingyang Xu, Visiting Scientist, Mitsubishi Electric Research Laboratories, Amherst, NY, 14228, United States of America, jxu7@buffalo.edu 1 - An Approximation Algorithm for the Spatial Scheduling Problem Sudharshana Srinivasan, Virginia Commonwealth University, 2820 Monument Avenue Apt 3, Richmond, VA, 23221, United States of America, srinivasans3@vcu.edu, Jill Wilson
Spatial Scheduling Problem (SSP) deals with the spatial component (where), and the temporal component (when) of a schedule. Such problems are common in shipbuilding, where large spaces are a premium. Solution methods discussed in the literature provide heuristic-based solutions for the problem. We present a variation of a mixed-integer programming formulation found in the literature, and an approximation algorithm to determine the schedule for a given problem instance.
Applications of Simulation
Contributed Session
Chair: Bo Sun, University of Louisville, Department of Industrial Engineering, JB Speed School of Engineering, Louisville, KY, 40292, United States of America, B0Sun004@louisville.edu 1 - Call Center Routing Policies and Learning Tom Robbins, Assistant Professor, East Carolina University, 3212 Bate Building, Greenville, NC, 27858-4353, United States of America, robbinst@ecu.edu
We examine the relationship of learning curves, routing policies, and turnover. Specifically we perform a simulation study to determine if routing policies can be structured in such a way as to improve the overall efficiency of the call center. Specifically, is it possible that by prioritizing less experienced agents during slow periods to facilitate learning; and prioritizing more experienced agents during busy times, to facilitate customer service, overall effectiveness can be improved?
2 - Fast Algorithms for Scheduling with Learning Effects and Time-dependent Processing Times Jianbo Qian, Phd candidate, McMaster University, Apt 601, 244 Willow Rd., Guelph, ON, N1H6R5, Canada, qianj2@mcmaster.ca, George Steiner
We consider scheduling problems with learning/deterioration effects and timedependent processing times on a single machine, with or without due date assignment considerations. By reducing them to a special assignment problem on product matrices, we solve all these problems in near-linear time. This improves the time complexity of previous algorithms for some scheduling problems and establishes the fast polynomial solvability for several other scheduling problems
2 - Evaluating of Dynamic Cross-sell Policy Effects in Real Call Center System Nevra Akbilek, Visiting Scholar, Auburn University, 516 E Glenn Avenue, Auburn, AL, United States of America, nakbilek@gmail.com
In a call center system where response time is important, the specialized dynamic equilibrium and continuity of process supporting customers and selling must be reached. Thus, a model is designed that determines cross-selling threshold considering queue length. In conclusion, this study determined the proposed dynamic exponential cross-selling threshold must be applied considering patience limit, retrial rate, and trunk capacity. Finally, choosing a high threshold value is more profitable.
3 - Examination Timetabling with Mathematical Programming: An Application in Turkish Air Force Academy Ghaith Rabadi, Associate Professor, Old Dominion University, Engineering Management & Systems Enginee, 241 Kaufman Hall, Norfolk, VA, 23529, United States of America, GRabadi@odu.edu, Emrah Koksalmis
The problem addressed is the timetabling of examinations at the Turkish Airforce Academy with different number of departments, branches, classes, and students. The constraints include examination conflicts, classroom capacities, seating plan restriction and exam spread. A constraint satisfaction model is introduced to find feasible solutions to the problem. The model is extended into an optimization model to minimize the number of classroom utilized. The obtained results will be presented
3 - A Simulation-based Model for overbooking in a Multi-resource Medical Clinic Bo Sun, University of Louisville, Department of Industrial Engineering, JB Speed School of Engineering, Louisville, KY, 40292, United States of America, B0Sun004@louisville.edu, Brooke Sweeney, Gerald Evans, Lihui Bai, Lijian Chen
In this paper, we describe a simulation model of a multi-resource medical clinic for overweight children. The clinics staff includes pediatricians, a nurse practitioner, a psychologist, an exercise physiologist, and a nutritionist. Various overbooking schemes are modeled to determine their affect on staff utilization and patient waiting time.
4 - University Timetabling Considering Inter-campus Traffic Jia Wang, National University of Singapore, Department of Industrial Systems & Engineering, Blk E1-7-17, 1 Engineering Drive 2, Singapore, 111920, Singapore, wangjia@nus.edu.sg, Loo Hay Lee, Ek Peng Chew, Kien Ming NG, Yan Fu Li, Hui-Chih Hung, Hui Xiao
This study presents a timetabling problem arising from the university expansion. The new campus is expected to be enjoyed by students from different disciplines. Main transportation between campuses is shuttle bus. Given the timetabling schedule for each module, we select the modules to the new campus such that the estimated traffic flow between these two campuses is minimized. We formulate the problem as a mixed integer programming model and develop a heuristic based on clustering to solve it.
WB08
C - Room 205
Topics in Disaster and Emergency Management

Contributed Session
Chair: Diana Prieto, University of South Florida, 4202 E. Fowler Avenue, ENB 118, Tampa, FL, 33620, United States of America, dprieto@mail.usf.edu 1 - Non-pharmaceutical Interventions for Pandemic Influenza Dayna Lee Martinez, University of South Florida, Tampa, FL, United States of America, dlmartin@mail.usf.edu, Tapas Das
Non-pharmaceutical interventions (quarantine, closures) have been shown to reduce infection attack rates and delay the spread in selected pandemic influenza outbreak outbreak scenarios. We investigate the nature of interactions among some of the key intervention parameters, such as initiation thresholds, intervention duration, and compliance levels, and the levels of virus transmissibility.
5 - Solving Assembly Scheduling Problems Using Lagrangian Relaxation Jingyang Xu, Visiting Scientist, Mitsubishi Electric Research Laboratories, Amherst, NY, 14228, United States of America, jxu7@buffalo.edu, Rakesh Nagi
We consider an assembly scheduling problem with tree-structured precedence constraints. In our problem, there are a number of work centers. Each work center contains machines of the same functionality. We propose a mixed integer linear programming formulation and solve the problem with Lagrangian relaxation approach. Near optimal results are obtained and the computational time is within several seconds for problems with size up to 8 machines and 300 operations.
2 - Real-time Data Collection Strategies for Epidemiological Characterization of Pandemic Outbreaks Diana Prieto, University of South Florida, 4202 E. Fowler Avenue, ENB 118, Tampa, FL, 33620, United States of America, dprieto@mail.usf.edu, Alfredo Santana, Sharad Malavade, Tapas Das
State Public Health Laboratories (PHLs) determine the strain of circulating viruses in the US. Specimens are generally collected from the sentinel healthcare providers for routine surveillance. However, during the recent H1N1 pandemic, the PHLs also received specimens from non-sentinels. The PHLs tested all the specimens received, extending the desired testing timeline. Using simulation and Bayesian estimation, we suggest strategies for better specimen collection and processing.
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C - Room 206A
WB11
Topics in Revenue Management

Sponsor: Revenue Management and Pricing Section Sponsored Session
Chair: Ozge Sahin, Assistant Professor, Johns Hopkins University, Carey Business School, Baltimore, MD, 21231, United States of America, ozge.sahin@jhu.edu 1 - Competitive Dynamic Pricing of Perishable Assets with Time-Varying Demand Ming Hu, University of Toronto, Rotman School of Management, Toronto, ON, Canada, Ming.Hu@Rotman.Utoronto.Ca, Guillermo Gallego
We present a game framework of dynamically pricing perishable capacities over a finite horizon with time-varying consumer arrivals and time-varying discrete choice probability functions, which accommodates the co-existence of substitutable and complementary products. We fully characterize equilibrium solutions with structural properties. We discuss various equilibrium behavior, such as alternating monopoly and the impact of assumed demand structures (e.g., MNL or linear) on equilibrium behavior.
2 - Time-Consistent Revised CVaR Ke Zhou, The Chinese University of Hong Kong, Department of Systems Engineering and En, Room910A ERB Shatin, N.T., Hong Kong, Hong Kong - PRC, kzhou@se.cuhk.edu.hk, Xiangyu Cui, Duan Li
Time consistency of a dynamic coherent risk measure is equivalent to the stable property of the testing set.CVaR is a popular coherent risk measure,but its testing set is not stable. We construct a time consistent risk measure to approximate CVaR based on the stable property, in the sense that its testing set has the maximal measure. For incomplete markets, the no-good-deal pricing technique generates a more accurate price interval than no-arbitrage by adopting the time consistent revised CVaR.
3 - On the Modelling Zero Mean Squared Returns in Mean Variance Portfolio Selection Neslihan Fidan, Research Assistant, Istanbul University, School of Business, Quantitative Methods Department, Istanbul, Turkey, neslihan.fidan@gmail.com
Modelling the time varying market risk of an asset is getting complicated in financial markets. This paper represents some results of portfolio selection procedure which considers modelling of dependent squared returns of the assets. It tries to find out the role of the conditional mean equation, when squared returns have zero mean and conditional variance.
2 - Pricing Policy in a Supply Chain: Negotiation or Posted Pricing? Chia-Wei Kuo, National Taiwan University, 1 Sec 4 Roosevelt Road, Taipei, Taiwan - ROC, cwkuo@ntu.edu.tw, Hyun-Soo Ahn, Goker Aydin
This paper examines the choice between posted pricing and negotiation when selling to the end customers. We find that the retailer and the manufacturer disagree only when the retailer prefers posted pricing, but the manufacturer wishes the retailer to use negotiation. Such friction arises when the capacity or the cost of negotiation is moderate. Surprisingly, in this region of friction, a decrease in capacity or an increase in negotiation costs translates into higher profit for the retailer.
WB11
C - Room 207A
Queueing Applications in Health Care Systems

Chair: Tolga Tezcan, Assistant Professor, University of Rochester, Rochester, NY, United States of America, tolga.tezcan@simon.rochester.edu 1 - A Tandem Queueing Model of Direct & Indirect Waiting in an Appointment System Jianzhe Luo, University of North Carolina, Department of Stat. and OR., Chapel Hill, NC, 27599, United States of America, jzluo@email.unc.edu, Vidyadhar Kulkarni, Serhan Ziya
We develop a useful queueing model for an appointment system which consists of an appointment queue and a service queue. We propose a Decoupled-TwoQueues model in which the appointment delay customers encounter in the appointment queue affects their show-up probability at the service queue. We manage to solve the optimization problem that aims to minimize the servers long-run average idle time while keeping customer long-run average waiting times in both queues below given levels.
3 - Bi-clustering to Estimate the Effect of Placement on Retail Sales Garrett Van Ryzin, Professor, Columbia University, New York, NY, United States of America, gjv1@columbia.edu, Wei Ke
We look at an application of bi-clustering to estimate the effect of product location in a store on sales. Products are clustered based on location sensitivity and locations are clustered based on sales productivity. We review the algorithm and initial performance tests or retail sales data.
4 - Optimal Pricing and Capacitated Replenishment with Consumer Upgrades Oben Ceryan, Postdoctoral Research Fellow, Ross School of Business, University of Michigan, 701 Tappan St., Ann Arbor, MI, 48109, United States of America, oceryan@umich.edu, Ozge Sahin, Izak Duenyas
We study a capacitated dynamic pricing and replenishment control problem with consumer upgrades. At each period, the firm first replenishes and sets the prices for a high and a low quality item, and then decides whether it should offer upgrades to any of the customers requesting the low quality item. We characterize the optimal upgrade, pricing and replenishment policies as well as the effect of customer upgrades on the prices of the high and low quality items.
2 - Inpatient Flow Management in a Singaporean Hospital Jim Dai, Professor, Georgia Institute of Technology, Atlanta, GA, 30332, United States of America, dai@isye.gatech.edu, Pengyi Shi, Ding Ding, James Ang, Mabel Chou
We study patient flow management in an inpatient department of a Singaporean hospital. We focus on understanding the effect of an early discharge policy, implemented in late 2009, on ward containment and on fraction of ED patients who have to wait six hours or longer to get a bed. We propose new analytical models that capture key features such as non-iid service times and discharge distributions.
WB10
C - Room 206B
Financial Risk Management

Contributed Session
Chair: Neslihan Fidan, Research Assistant, Istanbul University, School of Business, Quantitative Methods Department, Istanbul, Turkey, neslihan.fidan@gmail.com 1 - The Dotcom and Subprime Phenomena Two Sides of the Same Coin? George Hylden, University of Cambridge, Trumpington Street, Cambridge, CB2 1AG, United Kingdom, g.hylden@jbs.cam.ac.uk
The empirical paper tests the explanatory powers of systematic behavioral biases and the resulting violations of the stylized facts on options & portfolios to account for the dotcom and subprime phenomena. Using proprietary data on the VC fund market and the CDS index market, we conclusively prove the occurrence of a type II error with the traditional stylized facts as the null hypothesis. Our findings call for the reversed stylized facts to be given prominence in academia and business practice.
3 - Optimal Workflow Decisions for Investigators in Systems with Interruptions Tolga Tezcan, Assistant Professor, University of Rochester, Rochester, NY, United States of America, tolga.tezcan@simon.rochester.edu, Greg Dobson, Vera Tilson
Motivated by emergency departments, we model a system that consists of a stream of customers processed through three steps by two resources. The investigator handles the first and third steps and the back office handles the second step. We show that the investigator should prioritize new customers to maximize throughput. If customers in the system generate interruptions for the investigator then we show that it is asymptotically optimal for the investigator to prioritize discharging customers.
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Stochastic Optimization: Algorithms and Applications

Contributed Session
Chair: Jongbin Jung, Yonsei University, 50 YonseiRo, Seodaemungu, Seoul, 120-749, Korea, Republic of, olorin@yonsei.ac.kr 1 - A Simulation Based Optimization Approach for Two-stage Stochastic Programming with Recourse Tahir Ekin, PhD Candidate, The George Washington University, Department of Decision Sciences, 2201 G St. NW Funger Hall 415H, Washington, DC, 20052, United States of America, ekin@gwu.edu, Nicholas Polson, Refik Soyer
We provide a simulation-based approach to solve two-stage stochastic problems with recourse. An augmented probability model is constructed with both decision and random variables by recasting a linear problem as the mode of a pseudoposterior distribution. The main advantage of our approach is the ability to simultaneously compute expectations in the objective function without a need of any derivative information. We demonstrate our method with different examples.
Dynamic Pricing
Contributed Session
Chair: Sam Kirshner, Doctoral Candidate, Queens University, 143 Union Street, Kingston, ON, Canada, skirshner@business.queensu.ca 1 - Improved Bid Prices for Multistage Network Revenue Management Marco Bijvank, University of Montreal, Pavillon Andr-Aisenstadt, CP 6128 succ Centre-Ville, Montreal, QC, H3C 3J7, Canada, bijvankm@iro.umontreal.ca, Alwin Haensel, Pierre LEcuyer, Patrice Marcotte
We present new and efficient mathematical programming methods to compute time-dependent bid prices to control the availability of products for a network revenue management problem with stochastic demand. The frequency to update the bid prices during the booking horizon is arbitrary, which makes our new procedures very flexible.
2 - Exact and Inexact Methods for Solving the Two-Stage Stochastic View Selection Problem in DBMS Rong Huang, Research Assistant, North Carolina State University, 484 Daniels Hall, Campus box 7913, Raleigh, NC, 27695, United States of America, rhuang@ncsu.edu, Yahya Fathi, Rada Chirkova
We introduce the two-stage stochastic view selection problem with random query sets in database management systems and model it as a stochastic integer programming model. We present exact methods to obtain optimal solutions for our problem, and propose a heuristic to obtain competitive inexact solutions where our exact method is inapplicable. We present the results of a computational experiment of our methods.
2 - Dynamic Discrete Choice Model for Revenue Management Pratt Hetrakul, Graduate Research Assistant, Department of Civil & Environmental Engineering, 1173 Glenn L. Martin Hall Bldg #088, University of Maryland, College Park, MD, 20742, United States of America, hetrakul@umd.edu, Fabian Bastin, Cinzia Cirillo
We consider purchase behavior of consumers with respect to perishable product, offering cancellation and exchange possibilities. A monopolistic company sets the price which appears random to the consumers. Viewing the decision as an optimal stopping problem, we adopt a 1-SL policy, using approximation of the continuation value, with an adjustment that accounts for unobservable factors. The approach is applied to simulated data in a revenue management context.
3 - Two Methods of Error Reduction in Portfolio Optimization with CVaR Gah-Yi Vahn, UC Berkeley, 4141 Etcheverry Hall, Mail Code 1777, Berkeley, CA, 94704, United States of America, gyvahn@berkeley.edu, Noureddine El Karoui, Andrew Lim
We investigate two methods for reducing estimation error in CVaR portfolio optimization. The first approach regularizes empirical CVaR by penalizing portfolios with large variance. The regularized problem is a QCQP, and can be interpreted as a chance-constrained program. The second approach is to use the empirical Markowitz solution if the log-return distribution is in the elliptical family, as the Markowitz and mean-CVaR problems are equivalent in this case.
3 - Dynamic Pricing under Consumers Conversion Behavior Xiangyong Li, School of Economics & Management, Tongji University, 1239 Siping Road, Shanghai, 200092, China, xyli@tongji.edu.cn, Peng Tian, Li Zhao
We study a dynamic pricing problem under consumers conversion behavior. Purchasing conversion rates, defined as the percentage of consumers visits that results in purchases, are a primary focus of attention for many online retailers. We formulate this problem by the dynamic programming approach and derive an optimal dyanmic pricing policy that captures effects of consumers conversion behavior. Numerical examples are used to demonstrate effects of conversion behavior on firms dynamic pricing.
4 - Two-Stage Portfolio Optimization with Conditional Measures of Risk Sitki Gulten, PhD Student, Rutgers Business School - Department of Management Science & Information Systems, 1 Washington Park, Newark, NJ, 07102, United States of America, sgulten@andromeda.rutgers.edu, Andrzej Ruszczynski
Optimization of a portfolio from finitely many assets is a major problem in portfolio theory. In this research, a two-stage portfolio problem, in which decisions are made in each stage, and observations are gathered between stages, is formulated. Next, a conditional measure of risk, mean-semideviation risk function is used to formulate the objective function. Finally, performance of the two-stage portfolio optimization problem is analyzed.
4 - Scalable Dynamic Bid Prices for Network Revenue Management in Continuous Time Sam Kirshner, Doctoral Candidate, Queens University, 143 Union Street, Kingston, ON, Canada, skirshner@business.queensu.ca, Mikhail Nediak
We present a method to generate dynamic bid prices for a network revenue management problem in continuous time. Our approach formulates the problem as a SDP and uses cubic splines to model the derivative of the value function. The primary benefits of the framework are few constraints are required to produce effective bid prices and the method is scalable. In experiments for networks of realistic size, the approach produces higher revenues than the bid pricing policy based on resolved static LPs.
5 - Performance of Markowitzs Portfolio Selection Model in a Global Context Jongbin Jung, Yonsei University, 50 YonseiRo, Seodaemungu, Seoul, 120-749, Korea, Republic of, olorin@yonsei.ac.kr, Seongmoon Kim
This work aims to conduct an empirical analysis on the actual performance of Markowitzs portfolio selection model. By conducting virtual investments in stock markets of different conditions (US, UK, South Korea, etc.), we will attempt to identify the characteristics of each market, and to provide a framework for optimizing stock portfolios solely relying on a computational model.
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Stochastic Optimization in Short-Term Power Generation I

Chair: Steffen Rebennack, Assistant Professor, Colorado School of Mines, Engineering Hall 310, Golden, CO, 80401, United States of America, srebenna@mines.edu 1 - Optimal Bidding Strategies in Joint Electricity and Allowance Markets Vishnu Nanduri, Assistant Professor, University of WisconsinMilwaukee, Industrial Engineering, Milwaukee, WI, United States of America, vnanduri@uwm.edu
In this research we develop a game-theoretic model to capture strategic behavior of generators in electricity and allowance markets. We develop a reinforcement learning approach to solve the model. Data from northern Illinois electricity markets is used to examine the impact of transmission congestion on electricity and allowance prices.
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2 - Wind Power Forecasting and Electricity Market Operations: A Case Study of Illinois Zhi Zhou, Argonne National Laboratory, 9700 South Cass Avenue, Lemont, IL, 60439, United States of America, zzhou@anl.gov, Jianhui Wang, Jean Sumaili, Ricardo Bessa, Audun Botterud, Hrvoje Keko, Vladimiro Miranda
In this paper we model a power system with wind energy penetration. We first discuss the use of wind power forecasting in electricity market operations. In particular, we compare different wind power uncertainty representations, corresponding reserve strategies, and test the forecasts in a market with DA and RT settlements. The market clearing is modeled using stochastic unit commitment. The power system of Illinois is taken as a test case and result is discussed.
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5- Sensivity Analysis of the Replacement Problem Eva Selene Hernndez Gress, PhD, Universidad Autonoma del Estado de Hidalgo, Carretera Pachuca Tulancingo km 4.5, Pachuca 42184, Mexico, evah@uaeh.edu.mx, Prez Lechuga Gilberto
In our proposal we modeled the replacement problem using a Markov decision process and then, the instance is optimized using linear programming. Our goal is to analyze the sensitivity and robustness of the optimal solution across the perturbation of the optimal basis obtained from the simplex algorithm. The perturbation can be approximated by a given matrix added to the optimal basis. Some algebraic relations between the optimal solution and the solution of the perturbed instance are obtained.
3 - Stochastic Programming for Electricity Spot Auction Bidding Stein-Erik Fleten, Professor, Norwegian University of Science and Technology, Department of Industrial Econ. & Techn. Mgmt, Trondheim, Norway, stein-erik.fleten@iot.ntnu.no, Daniel Haugstvedt
Hydropower producers with reservoirs must decide whether to release water now or in the future. This challenge is subject to price and inflow uncertainty and becomes manifest in the bidding problem, in which the producer decides on a price-volume curve for each hour of the next day. The problem is multiscale since bidding is short-term while future release might mean several months ahead. Hierarchical optimization is a common approach; we propose stochastic programming alternatives.
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Spatial and Dynamic Optimization Approaches for Conservation and Natural Resource Management
Sponsor: Energy, Natural Resources and the Environment/ Environment and Sustainability Sponsored Session
Chair: Hayri Onal, Professor, Department of Agricultural and Consumer Economics, Univ of Illinois at Urbana-Champaign, Urbana, IL, United States of America, h-onal@illinois.edu 1 - Imposing Connectivity Constraints in Forest Planning Models Rodolfo Carvajal, Georgia Tech, Depy. Industrial & System Engineering, Atlanta, GA, United States of America, rocarvaj@gatech.edu, Miguel Constantino, Marcos Goycoolea, Juan Pablo Vielma, Andres Weintraub
Connectivity requirements are a common component of forest planning models, with important examples arising in wildlife habitat protection. In harvest scheduling models, preservation concerns can be addressed by requiring large contiguous patches of mature forest to be left standing after harvest. We present a new integer programming methodology in this context and test it on real medium-sized forest instances available in the FMOS repository.
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Decision Support Models and Sensitivity Analysis II

Chair: Emanuele Borgonovo, Professor, Bocconi University, Via Roentgen 1, Milano, Italy, emanuele.borgonovo@unibocconi.it 1 - Assumption Free Multiattribute Utility Function Elicitation Alessandra Cillo, Bocconi University, Via Roentgen 1, Milan, Italy, alessandra.cillo@unibocconi.it, Emanuele Borgonovo, Francesca Beccacece
The elicitation of multiattribute utility functions is a crucial step in the formulation of decision-analysis problems. The classic assessments methods suffer of one major critique: they rely on assumptions which, even though conceptually convincing, have often been questioned from a behavioral point of view. The goal of this paper is to introduce a methodology which allows an assumption free multiattribute utility function elicitation.
2 - A Network Formulation for Wildlife Corridors in Forest Harvest Scheduling Models Rachel St. John, University of Washington, School of Forest Resources, Seattle, WA, 98195, United States of America, rkrieg@u.washington.edu, Sndor Tth
Wildlife habitat is an important forest ecosystem service. While many species of conservation concern require sufficient vegetative cover to move across the landscape, providing such protection can be challenging in intensively managed forest plantations. We propose a new network formulation for wildlife corridors in the context of spatially explicit harvest scheduling. The construct allows the corridors to change over time to ensure the maximization of timber revenues.
2 - An Entropy-based Uncertainty Measure and Importance Indicator Douglas Allaire, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, United States of America, dallaire@mit.edu, Karen Willcox
Often large uncertainties in model outputs render a model uninformative in aiding decisions. In such cases, factor importance indicators are used to identify uncertainty sources. When the second moment captures output uncertainty, variance-based indicators suffice. However, when this moment is not adequate, alternatives must be considered. For this we propose an uncertainty measure and importance indicator based on information theory, which is compared to variance-based and moment-free methods.
3 - Combining Contiguity and Compactness Criteria in Reserve Design Hayri Onal, Professor, Department of Agricultural and Consumer Economics, Univ of Illinois at Urbana-Champaign, Urbana, United States of America, h-onal@illinois.edu, Sahan Dissanayake, Kevin Patrick
A linear integer programming formulation is developed to configure a conservation reserve considering spatial compactness and contiguity along with ecological and economic criteria. The model is applicable to both seeded and unseeded contiguity problems. The computational performance of this approach on real large scale data sets has been amazing. We present the model and empirical results.
3 - Optimal Uncertainty Quantification and Sensitivity Analysis with Incomplete Information Tim Sullivan, California Institute of Technology, 1200 East California Boulevard, Pasadena, CA, 91125, United States of America, sullivan.t.j@gmail.com, Michael Ortiz, Clint Scovel, Mike McKerns, Florian Theil, Houman Owhadi, Dominik Meyer
We show, using optimization with respect to incomplete information, that output uncertainties may be insensitive or even discontinuous with respect to input uncertainties when the transfer functions (or probability distributions) are imperfectly known. For hierarchical structures, this phenomenon can lead to the non-propagation of uncertainties or information across scales.
4 - Application of Global Sensitivity Analysis in Finance Sergei Kucherenko, Imperial College London, London, United Kingdom, s.kucherenko@imperial.ac.uk, Emanuele Borgonovo
Global Sensitivity Analysis (GSA) is applied to financial problems. GSA allows to rank variables, to estimate models effective dimension and to reduce models complexity. We analyse option-pricing models, identify the most important parameters and model structure. We also show how GSA can be used to explain the efficiency of Quasi Monte Carlo methods. Pricing of path-dependent options and the forecasts of interest rates using the Cox-Ingersoll-Ross model are considered.
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2 - The Horizon Decomposition for Capacity Constrained Lot Size Problems Ioannis Fragkos, PhD Candidate, University College London, Gower Street, London, United Kingdom, i.fragkos@ucl.ac.uk, Bert De Reyck, Zeger Degraeve
We introduce a new Danzig-Wolfe decomposition for Lot Size Problems, called the Horizon Decomposition. The problem horizon is partitioned in subsets of contiguous periods, and columns correspond to extreme points of short-horizon lot size problems. Computational experiments show that this approach leads to strong lower bounds. Our method is generic and can be applied to a wide variety of optimization problems.
Decision Analysis II
Contributed Session
Chair: Ursula Ott, Assistant Professor, Loughborough University, Ashby Road, Loughborough, LE11 3TU, United Kingdom, U.F.Ott@lboro.ac.uk 1 - Maverick Buying in Centralized Purchasing Organizations: Optimal Mitigation and Compliance Levels Volker Groetsch, EBS Business School, Soehnleinstr. 8F, Wiesbaden, 65201, Germany, volker.groetsch@ebs.edu, Richard Pibernik, Alexander Rothkopf
Maverick buying (MB), i.e. non-compliant buying without using official channels and dedicated suppliers, is a major concern to many companies that are trying to achieve economies of scale in purchasing. We use a principal-agent type of setting to model different approaches that are commonly used to prevent MB and provide intuition into their effects. We show that these approaches are usually not suitable for achieving full compliance; alternative methods to reduce MB are proposed and evaluated.
3 - Solving Large Scale Capacitated Lot-Sizing Problems with Setup Times and Setup Carry-over Hakan Karagul, PhD Candidate, North Carolina State University, 611 Smithdale Drive, Raleigh, NC, 27606, United States of America, hfkaragu@ncsu.edu, Don Warsing, Thom J. Hodgson
We propose two mixed integer linear programming (MILP) models to solve short-term, large-scale capacitated lot-sizing problems that allow carryover of setups across periods. One model is a modified version of an existing model in the literature and the other is unique. Through extensive computational testing, we identify the conditions under which our models outperform existing models, and we develop an efficient heuristic and evaluate its performance in solving these problems.
2 - To What Extent Do USF MBA Graduates Employ Business Analytics Practices in Their Decision Making? Mouwafac Sidaoui, Professor, University of San Francisco, 2130 Fulton Street, San Francisco CA 94117, United States of America, sidaoui@usfca.edu
This study is designed to explore the use of business analytics to improve decision making by recent USF MBA graduates and the benefits of using various analytical tools for achieving high results across functions in an organization. A multiple regression model will be constructed to determine to what extent USF MBA graduates employ business analytics into their decision making in their job function.
4 - Optimal Production Cycle with Stochastic Demand in a Two Stage Supply Chain Yuanyuan Dong, Southern Methodist University, 3145 Dyer St., Dallas, TX, United States of America, ydong@smu.edu, Andrew Yu
This research studied a production lot sizing problem involving a retailer and a manufacturer. Customers purchase item randomly from retailer and retailer replenishes item from the manufacturer. Hence the inter-arrival time of the retailers replenishment orders at the manufacturer is a stochastic process. An analytical model which determines the maximum on-hand inventory at the manufacturer, with the objective to minimize the total expected inventory and setup costs, is developed and solved.
3 - Sabermetics: Analytics and Baseball John Burbridge, Professor of Operations and Supply Chain Management, Elon University, 2075 Campus Box, Elon, NC, 27244, United States of America, burbridg@elon.edu
Sabermetrics is the search for objective knowledge in baseball. Recently researchers have been exploring a variety of topics that better explain why teams win or lose including better performance measures. For the past six years the author has been teaching a course Baseball and Statistics at Elon University that requires a research paper. For this session, it is proposed to provide an overview of sabermetrics and then discuss some of the more interesting research findings from these papers.
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Joint Session: Opt Global/Opt Network:Optimization in Wireless System

Sponsor: Optimization- Global Optimization/Optimization- Networks Sponsored Session
Chair: Kangyuan Zhu, Software Researcher, CSSI, Inc, 8201 Corporate Drive, Sutie 750, Hyattsville, MD, 20785, United States of America, kz3y@virginia.edu 1 - The Coastal Seaspace Patrol Sector Design and Allocation Problem Brian Lunday, Assistant Professor, United States Military Academy, Department of Mathematical Sciences, United States Military Academy, West Point, NY, 10996, United States of America, Brian.Lunday@usma.edu, Kevin Lunday, Hanif Sherali
We model the problem of designing and allocating coastal seaspace sectors for steady-state patrolling operations by a maritime protection agency, for which we construct a spanning forest of arborescences to cover the demand nodes and assure contiguity of each patrol sector. We present three alternative formulations, as well as selected symmetry defeating constraints, and conduct a computational comparison of their complexity to solve the problem for a representative instance.
4 - In the Land of the Blind. A Model of Double Sided Uncertainty for International Negotiations Ursula Ott, Assistant Professor, Loughborough University, Ashby Road, Loughborough, LE11 3TU, United Kingdom, U.F.Ott@lboro.ac.uk
We use an intercultural double-sided incomplete bargaining mechanism for managerial players to analyze cultural learning. In a globalized world, managers have adapted to their organizations and have learnt to make decisions in a multicultural environment. The dynamics of their behavior ignores the deep-rooted cultural bargaining models people are brought up with. These models are relevant for managers who were educated and worked in Western countries, while growing up in the Middle or Far East.
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Lot-Sizing
Contributed Session
Chair: Andrew Yu, Assistant Professor, Southern Methodist University, 3145 Dyer St., Dallas, TX, 75205, United States of America, yuj@lyle.smu.edu 1 - A Rounding Heuristic for Dynamic Lot-Sizing Problem with Congestion Yong Ha Kang, Edward P. Fitts Department of Industrial & Systems Engineering, North Carolina State University, 400 Daniels Hall, College of Engineering, Raleigh, NC, 276957906, United States of America, yyjgj@korea.ac.kr, Reha Uzsoy
This study presents a rounding procedure for a multiple product single machine dynamic lot-sizing problem with congestion. We develop a nonlinear optimization model with clearing functions. Given the fractional solutions obtained by the nonlinear optimization model, we construct an approximate solution to the original problem by using a shortest path based rounding procedure.
2 - Integrated Mitigation and Restoration Problem for Infrastructure Systems Burak Cavdaroglu, Rensselaer Polytechnic Insitute, 110 8th Street, CII Building Suite 5015, Troy, 12180, United States of America, cavdab@rpi.edu, William Wallace, John Mitchell, Thomas Sharkey
We address a network design problem that integrates pre-disaster mitigation of civil infrastructures and post-disaster restoration of services provided by these civil infrastructure systems for a set of realistic hurricane scenarios. Our model and optimization methods are tested on realistic data representing the interdependent infrastructure systems of New Hanover County, North Carolina.
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3 - Linear Network Deployment Problems Accommodating Uncertain Transmission Range Kangyuan Zhu, Software Researcher, CSSI, Inc, 8201 Corporate Drive, Sutie 750, Hyattsville, MD, 20785, United States of America, kz3y@virginia.edu, Stephen Patek
Typically the transmission range is assumed to be known and constant for nodes at different locations and directions. However, in practice it is highly uncertain a priori, even for homogeneous networks. In this paper, we explore physical layer models for estimating dynamic node connectivity in linear networks. We present a dynamic programming framework, as well as heuristics, for the linear network deployment to achieve the optimal network connectivity with limited network resources.
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Applications of Nonlinear Optimization

Chair: Frank E. Curtis, Lehigh University, 200 W. Packer Avenue, Bethlehem, PA, United States of America, frank.e.curtis@gmail.com 1 - A Localized Augmented Lagrangian Method for Minimizing the Kohn-Sham Energy Marc Millstone, Research Staff Member, IBM T.J. Watson Research, P.O. Box 218, Yorktown Heights, NY, 10598, United States of America, mszetom@us.ibm.com
The combination of ever increasing computational power and new mathematical models has fundamentally changed the field of computational chemistry. One example of this is the use of new algorithms for computing the charge density of a molecular system from which one can predict many physical properties of the system. We present a new method for minimizing the Kohn-Sham energy that evaluates the energy and gradient functions at sparse iterates. Detailed numerical experiments are provided.
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Stochastic Optimization with Application to Engineering Design

Chair: Johannes Royset, Associate Professor, Naval Postgraduate School, Monterey, CA, United States of America, joroyset@nps.edu 1 - Mixed Continuous-Discrete Surrogate Models for Engineering Analysis Patty Hough, Sandia National Laboratories, P.O. Box 969, MS 9159, Livermore, CA, 94551, United States of America, pdhough@sandia.gov
Surrogates are essential for mitigating the computational expense of simulationbased optimization and uncertainty analyses. We describe our experience with categorical regression, ACOSSO splines, and treed GPs for engineering simulations with both continuous and discrete parameters. We describe the principles and metrics used for evaluating these approaches, the characteristics of the test functions, and our numerical results. We discuss our observations regarding the merits of each approach.
2 - Optimizing Coverage and Duration for a Chlamydia Trachomatis Screening Program Nan Kong, Purdue University, School of Biomedical Engineering, West Lafayette, IN, United States of America, nkong@purdue.edu, Lanshan Han, Yu Teng
Chlamydia trachomatis infection, a major sexually transmitted disease, affects millions of people worldwide. A key public health challenge in controlling such a transmittable disease is how to cost effectively identify asymptomatically infected individuals through screening. We adapt a well-established system dynamic model for the transmission dynamics and formulate a parameter optimization problem to determine the optimal coverage and duration for a public screening program.
2 - Optimal Engineering Design Using the Buffered Failure Probability Johannes Royset, Associate Professor, Naval Postgraduate School, Monterey, CA, United States of America, joroyset@nps.edu, R. Tyrrell Rockafellar
The buffered failure probability is an alternative measure of reliability related to the conditional value-at-risk that offers several theoretical, practical, and computational advantages over the traditional failure probability. In this presentation, we examine algorithmic and computational issues when solving stochastic optimization problems involving the buffered failure probability.
3 - Value Functions: Variational Properties and Applications to Inversion Aleksandr Aravkin, University of British Columbia, Earth and Ocean Sciences, Vancouver, BC, Canada, saravkin@eos.ubc.ca, James V. Burke, Michael P. Friedlander
Striking the right balance between data-fitting and regularization is an important problem in many fields, including signal processing, compressive sensing, and seismic applications. Recent advances in sparsity promotion/regularization algorithms demonstrate the importance of understanding the variational properties of value functions with respect to perturbations of the feasible region. In this talk we present a broad class of problems where differentiability of the value functions can be established, and derivatives explicitly computed, with respect to perturbations of the level set of a regularization function. The results allow us to combine robust and sparsity promoting inversion techniques for large-scale applications.
3 - Constrained Global Optimization of a Paper Helicopter Based on Experiments Raphael Haftka, Distinguished Professor, University of Florida, Mechanical and Aerospace Engineering, Gainesville, FL, 32611, United States of America, haftka@ufl.edu, Felipe A. C. Viana, Gerhard Venter, Richard Hamman
The Efficient Global Optimization (EGO) is often applied to design under uncertainty with assumed uncertainty distributions that may have little to do with reality. Here we apply it to experimentally minimizing the fall time of a paper helicopter (improving the time it takes to fall from a certain height) with substantial manufacturing and operating uncertainties. A classifier was used to reject infeasible designs. With this, we improved the initial fall time by 10%.
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Network and Power Issues in Homeland Security

Contributed Session
Chair: Sinan Tas, PhD Candidate, UW-Madison, 1513 University Avenue, Madison, WI, 53706, United States of America, tas@wisc.edu 1 - A Knapsack Approximation for the Shortest Path Network Interdiction Problem Justin Yates, Texas A&M University, 237D Zachry Engineering Center, 3131 TAMU, College Station, TX, 77843-3131, United States of America, jtyates@tamu.edu, Kavitha Lakshmanan
A modified shortest path network interdiction model is approximated by a constrained binary knapsack problem. The goal of this work is to develop a method for approximating the regional allocation of defense resources that maintains accuracy while reducing both computational effort and the sensitivity of computation time to network/regional properties. Statistical and spatial analysis methods are utilized to verify approximation performance of the knapsack method in two real-world networks.
4 - Shape Optimization with Stochastic Dominance Constraints Martin Pach, University of Duisburg-Essen, Forsthausweg 2, Duisburg, 47057, Germany, martin.pach@uni-due.de, Ruediger Schultz
We investigate the impact of uncertainty in shape optimization problems. In particular, we consider elastic structures under random forces. A formulation for shape optimization models with stochastic dominance constraints will be presented. Here, the shape function, e.g. compliance, is compared to a preselected benchmark random variable. The required numerical methods, these are level set methods and a grid generation algorithm, are discussed.
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2 - Addressing Protection, Robustness and Resilience in a Power System Vulnerability Model Sinan Tas, PhD Candidate, UW-Madison, 1513 University Avenue, Madison, WI, 53706, United States of America, tas@wisc.edu, Vicki Bier
Most past methods of vulnerability assessment focus on reducing system vulnerability through protection or hardening of critical system components. We present a greedy heuristic model of vulnerability assessment that also addresses robustness (as measured by the potential for cascading failures) and resilience (as measured by component restoration times).
Operations Management With Strategic Players

Chair: Gad Allon, Northwestern University, Evanston, IL, United States of America, g-allon@kellogg.northwestern.edu 1 - Markdown Management: Pricing as a Signaling Device Gad Allon, Northwestern University, Evanston, IL, United States of America, g-allon@kellogg.northwestern.edu, Ramandeep Randhawa, Achal Bassamboo
We study the classical revenue management scenario of a monopolist retailer selling to customers over a finite horizon. The retailer possesses information about the aggregate demand, whereas customers have private information on their valuations and are strategic. We study how the profit maximizing retailer strategically uses price as a signaling device.
3 - Nuclear Detection Using Higher Order Learning Christie Nelson, Ph.D. Student, Rutgers University, 23A Norwood Ct, Princeton, NJ, 08540, United States of America, cgrewe@eden.rutgers.edu, William M. Pottenger
The detection of potential nuclear materials is a challenging homeland security problem. This research reports on the application of a novel statistical relational learning algorithm, Higher Order Nave Bayes (HONB), to improve the detection and identification of nuclear isotopes. Traditional IID machine learning methods are applied to the area of nuclear detection, and the results compared with the performance of leveraging higher-order dependencies between feature values using HONB.
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2 - Revenue Sharing and Information Leakage in a Supply Chain Guangwen Kong, Ph.D. Candidate, University of Southern California, 3670 Trousdale Parkway, Los Angeles, 90089, United States of America, Guangwen.Kong.2013@marshall.usc.edu, Raj Rajagopalan, Hao Zhang
Information sharing in a supply chain has many benefits but information leakage reduces the incentive to share information. An upstream supplier in a two-level supply chain may be better off by leaking information from an informed retailer to an uninformed retailer, reducing the incentive of the informed retailer to share information. We explore how a revenue sharing contract can reduce the incentive of upstream suppliers to leak information and when such a nonleakage equilibrium will exist.
Mixed-Integer Programming Theory and Applications

Chair: Simge Kucukyavuz, Ohio State University, 1971 Neil Avenue, Columbus, OH, United States of America, kucukyavuz.2@osu.edu 1 - Computational Study of Chance Constrained Linear Program Feng Qiu, PhD Student, Georgia Tech, 765 Ferst Dr. Nw., Atlanta, GA, 30332, United States of America, fqiu@gatech.edu, Shabbir Ahmed, Santanu S. Dey, Laurence Wolsey
A general Chance Constrained Linear Program (CCLP) that has non-negative random coefficients on the left hand side is considered. We show this problem is generally NP-hard even though the probabilistically constrained system contains only one linear inequality. CCLP can be approximated using the Sample Approximation Approach (SAA). We propose several approaches to solve the SAA MIP model and present preliminary computational results.
3 - Saving Seats for Strategic Customers Eren Cil, University of Oregon, 1208 University of Oregon, Eugene, OR, 97403-1208, United States of America, erencil@uoregon.edu, Martin Lariviere
We consider a firm serving two segments. The first segment requests a reservation while the second segment, who behaves strategically, walks in. The firm decides how much of its capacity to make available to reservation customers. When the reservation customers are more valuable, the firm may decline some reservation requests to bolster walk-in demand. When walk-ins are more valuable, the firm may save no capacity for walk-ins. Thus, it may be better to ignore rather than pamper walk-ins.
2 - A Method for Computing the Efficient Frontier of Chanceconstrained Optimization Models Jim Luedtke, Assistant Professor, University of WisconsinMadison, 3236 Mechanical Engineering Building, 1513 University Avenue, Madison, WI, 5370, United States of America, jrluedt1@wisc.edu
Chance-constrained optimization models minimize cost while limiting the likelihood of a bad outcome to a specified level. This model can be seen as a bicriteria model with objectives of risk and cost, and hence it is important to explore the efficient frontier between these objectives by solving it for multiple risk levels. We describe how a recently introduced integer programming decomposition algorithm can solve this sequence of problems more efficiently than considering them separately.
4 - Impact of Delay Announcement Achal Bassamboo, Northwestern University, Evanston, IL, United States of America, a-bassamboo@kellogg.northwestern.edu, Qiuping Yu, Gad Allon
Many service system announce anticipated delay to the customers. In this paper, we explore the impact of such announcement. We study the data from a medium size call center where the customers are provided announcement concerning their delay. The data provides information about how long the customer stayed in system before they decided to abandon or entered service, whichever occurred first.
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3 - Arc-Residual Capacity Inequalities for Robust Network Design Arie Koster, Professor Dr., RWTH Aachen University, Lehrstuhl II fr Mathematik, Wllnerstr. 5b, Aachen, 52062, Germany, koster@math2.rwth-aachen.de, Manuel Kutschka
Arc-Residual Capacity Inequalities are a well-known class of valid inequalities for capacitated network design problems. In robust network design demand uncertainty is modeled following the approach of Bertsimas and Sim (2003,2004). In this talk we generalize the class of arc-residual capacity inequalities to robust network design. Preliminary computational experiments will be presented to evaluate the effectiveness of the new inequalities.
Consumer Driven OM Models

Chair: Muge Yayla-Kullu, Assistant Professor, Rensselaer Polytechnic Institute, Lally School, 110 8th Street, Troy, NY, 12180, United States of America, YAYLAH@rpi.edu 1 - Advance Selling and Supply Chain Decisions Xuying Zhao, University of Notre Dame, Mendoza College of Business, Notre Dame, United States of America, Xuying.Zhao.29@nd.edu, Kathryn Stecke, Zhan Pang
We study a two-level supply chain with a supplier and a newsvendor retailer who may adopt advance selling to consumers through pre-orders. The interaction between advance selling and supply chain decisions including prices and quantity is analyzed. We show the impact of a decentralized supply chain on a retailers advance selling strategy.
4 - Exact Interdiction Models and Algorithms for Disconnecting Networks via Node Deletions Siqian Shen, Assistant Professor, University of Michigan, Industrial & Operations Engineering, 1205 Beal Avenue, Ann Arbor, MI, 48109, United States of America, siqian@umich.edu, Roshan Goli, J. Cole Smith
We study the problem of maximizing the graph disconnectivity by deleting a subset of nodes. We consider three connectivity metrics: the number of components (which we attempt to maximize), the largest component size (which we minimize), and the minimum cost required to reconnect the graph (which we maximize). We formulate each problem as a MIP, and study valid inequalities for the first two objectives by examining intermediate dynamic programming solutions to $k$-hole subgraphs.
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2 - Pricing Policies for Heterogeneous Quality Products Yalcin Akcay, Koc University, Rumelifeneri Yolu, Sariyer, Istanbul, Turkey, yakcay@ku.edu.tr, Fikri Karaesmen
We study the pricing of inventories of items whose quality levels are heterogeneous. All else being equal, customers have preferences for higher quality items, while lower quality items tend to stay unsold longer. We investigate an environment where the same price is charged for the inventory but customers choose the best available items first. As inventory is depleted, adjusting the prices enables the seller to better exploit the current supplydemand mismatch.
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4 - Traffic Arrivals Into Retail Stores - Distributional Assumptions and Why They Matter? Jayashankar Swaminathan, University of North Carolina at Chapel Hill, McColl Building, Chapel Hill, NC, United States of America, msj@unc.edu, Saravanan Kesavan, Vidya Mani
Most analytical work on customer arrivals into a retail store assume Poisson distribution for tractability. In this study, using hourly traffic data from a major retailer, we identify the underlying distribution of incoming traffic and explore the implications of incorrect arrival distributional assumptions on store planning and execution.
3 - Is Better Place Really Better?: An Analysis of a New Electrical Vehicle Business Model Serguei Netessine, Professor, INSEAD, Boulevard De Constance, Fontainebleau, 77300, France, serguei.netessine@insead.edu, Buket Avci, Karan Girotra
We analyze and compare a novel business model for the deployment of electric vehicles, best exemplified by Better Place (BP) to the traditional EV sales model. BP charges customers for the miles driven and establishes a network of battery swapping stations to enable rapid change of batteries. We compare BP model to the traditional EV sales model in terms of adoption and environmental impact. We also study the impact of different public policy mechanisms to reduce carbon emissions on both models.
WB28
C - Room 215
Scheduling and Logistics

Chair: R. Logen Logendran, Professor, Oregon State University, School of Mech, Indust, and Mfgr Engr., 204 Rogers Hall, Corvallis, OR, 97331-6001, United States of America, logendrr@engr.orst.edu 1 - Single Machine Carryover Sequence-Dependent Group Scheduling Problems in PCB Manufacturing Mohammad Yazdani Sabouni, PhD Student, Oregon State University, School of Mech, Indust, and Mfgr Engr., 204 Rogers Hall, Corvallis, OR, 97331-6001, United States of America, yazdanim@onid.orst.edu, R. Logen Logendran
We consider a single machine problem with carryover sequence-dependent setup time in PCB manufacturing. We introduce a setup time called external setup time and integrate it with the machine setup time. A branch-and-bound algorithm with a lower bound is developed to minimize the completion time of PCBs in a way repeated solutions or those inferior in quality can be identified. The algorithm can optimally solve small problems and for large problems we present its deviation from the lower bound.
4 - The Interplay between Perceived Quality and Resource Utilization: Does Product Size Matter? Muge Yayla-Kullu, Assistant Professor, Rensselaer Polytechnic Institute, Lally School, 110 8th Street, Troy, NY, 12180, United States of America, YAYLAH@rpi.edu, Praowpan Tansitpong
We empirically investigate how the customer perceived quality and the resource consumption differences of products may impact product line decisions, and how they are related to firms market performances. Using an international airline data set and path analysis methodology, we find that the firms that implement correct capacity utilization strategies during product line design make significantly more money than the firms that do not.
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C - Room 214
Empirical Work in OM
Chair: Baris Ata, Professor, Northwestern University, Kellogg School of Management, 2001 Sheridan Road, Evanston, IL, 60208, United States of America, b-ata@kellogg.northwestern.edu Co-Chair: Che-lin Su, Professor, University of Chicago Booth School of Business, 5807 S. Woodlawn Avenue, Chicago, IL, 60637, United States of America, che-lin.su@chicagobooth.edu 1 - The Impact of Schedules on Delays: understanding the Heterogeneity in Airline Scheduling Decisions Mazhar Arikan, Purdue University, West Lafayette, IN, United States of America, marikan@purdue.edu, Vinayak Deshpande
From the systems approach point of view, delays in the US air transportation system is a symptom of poor customer service and ineffective resource planning. We present a study that investigates the drivers of the heterogeneity in airline scheduling decisions. Using publicly available flight data, we provide a method for forecasting scheduled on-time arrival probability for each US domestic flight, which captures the heterogeneity in various factors that affects the on-time arrivals.
2 - Supply Planning Models for JIT Manufacturing Environment with Remanufacturing and Reverse Logistics Kyung Sung Jung, PhD Student, The Unversity of Texas at Dallas/School of Management, 800 W. Campbell Rd, SM30, Richardson, TX, 75083, United States of America, kysung63@utdallas.edu, Milind Dawande, Neil Geismar, Chelliah Sriskandarajah
A supply planning problem at the remanufacturer is studied. Optimal production plans are developed for different production strategies which are differentiated by whether inventories of products are carried, and the demand of retailers are resequenced. Production policies are devised to minimize the total cost. Effects of production capacity are also explored. A comprehensive computational study provides insights into this closed-loop supply chain for different production strategies.
3 - Group Scheduling on Unrelated-Parallel Machines Mir Abbas Bozorgirad, PhD Student, Oregon State University, School of Mech, Indust, and Mfgr Engr., 204 Rogers Hall, Corvallis, OR, United States of America, bozorgim@onid.orst.edu, R. Logen Logendran
We develop a model to optimally solve the group scheduling problem on a set of unrelated parallel machines. We consider sequence-dependent setup times, machine eligibility, and dynamic job releases/machine availabilities. For large industry-size problems, a tabu search based algorithm is developed to minimize the weighted sum of total weighted completion times and total weighted tardiness to benefit both the producer and customers. Also, its applicability is demonstrated on an example problem.
2 - Empirical Analysis of Pricing in the Automotive Supply Chain Antonio Moreno-Garcia, Northwestern University, Kellogg School of Management, Evanston, IL, United States of America, a-morenogarcia@kellogg.northwestern.edu, Christian Terwiesch
Demand for new automobiles has been subject to a very high volatility over the last few years, affected by the evolution of gas prices, the introduction of new products and the recent economic turmoil. Using a detailed dataset of the U.S. auto industry, we study how manufacturers respond to this increased volatility.
3 - Structural Estimation of Callers Delay Sensitivity in Call Centers Seyedmorteza Emadi, PhD Student, Kellogg School of Management, 2001 Sheridan Road, Evanston, IL, 60208, United States of America, s-emadi@kellogg.northwestern.edu, Che-lin Su, Baris Ata, Zeynep Aksin
We model callers decision making process in call centers as an optimal stopping problem. After each period of waiting a caller decides whether to abandon or to continue to wait. The utility of a caller is modeled as a function of his waiting cost and reward for service. We use random coefficient model to capture the heterogeneity of the callers. Using the data of individual calls made to an Israeli call center, we estimate the cost and reward parameters of the callers.
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C - Room 216A

Point of care (POC) testing is becoming increasingly popular in US hospitals as a way to speed up testing processes, reduce patient length of stay, and improve patient satisfaction. This study uses propensity score matching (PSM) to test the impact of POC versus central lab testing on patient length of stay, using two years of patient data collected at an American hospital. Our analysis shows a significant reduction in length of stay for patients that underwent POC testing.
Real Asset Valuation

Cluster: Quantitative Finance Invited Session
Chair: Steven Golbeck, Northwestern University, 2145 Sheridan Road, Room C210, Evanston, IL, 60208, United States of America, stevengolbeck2008@u.northwestern.edu Co-Chair: Lingfei Li, Northwestern University, Department of Industrial Engineering, 2145 Sheridan Road, Evanston, IL, 60208, United States of America, lingfeili2012@u.northwestern.edu 1 - The Electricity Stack: Linking Coal, Gas, Power and Emissions Markets Michael Coulon, Princeton University, 117 Sherrerd Hall, Princeton University, Princeton, NJ, 08544, United States of America, mcoulon@princeton.edu
Observed bidding of power generators shows the clear link between the dynamics of underlying fuel and emissions costs and resulting power prices. We propose an intuitive and tractable structural model, capturing key effects such as merit order changes, crucial for the pricing of spread options and the valuation of physical assets. We discuss the resulting dependence structure between energy prices, implications for option pricing and the availability of some closed-form expressions.
2 - A Large Scale ICU Simulation Model with Blocking Theologos Bountourelis, Post Doctoral Associate, University of Pittsburgh, 1048 Benedum Hall, Pittsburgh, United States of America, bountourelis@gmail.com, Spencer Nabors, Gilles Clermont, Louis Luangkesorn, Andrew Schaefer
As patients transition through Intensive Care Units, a lack of available beds in a requested unit may cause patient blocking leading to unnecessary costs. This work concerns the methodology behind the compilation, validation and calibration of a large scale ICU simulation model designed to predict patient blocking. The model is validated and calibrated using real patient blocking data derived from patient movement databases of a large hospital.
3 - Storing and Dispensing Medical Supplies Taking Advantage of Technology Claudia Rosales, Michigan State University, N301 North Business Complex, East Lansing, MI, 48824, United States of America, rosales@bus.msu.edu, uday Rao, Michael Magazine
Two-bin inventory systems have been used at hospitals to store and replenish large numbers of medical supplies. The adoption of RFID technology to track empty bins has enabled continuous time tracking of system conditions. We present a semi-Markov decision model for the two-bin system. We characterize the optimal replenishment policy. We validate our results with data obtained from a Canadian hospital where RFID-enabled two-bin systems are currently in use.
2 - Stochastic Models for Asset-backed Financing and Leasing Steven Golbeck, Northwestern University, 2145 Sheridan Road, Room C210, Evanston, IL, 60208, United States of America, stevengolbeck2008@u.northwestern.edu, Vadim Linetsky
We discuss a stochastic model for the valuation of leases and loans secured by assets that generate a stochastic service flow or rental stream to the owneroperator. In particular, we examine the impact of credit and asset risk on secured financing, and introduce a method to imply risk premia, due to asset volatility, from observed market spreads on secured financing transactions.
4 - Who is the Next Patient in ICU? Muer Yang, Assistant Professor, University of St Thomas, MCH 316, 2115 Summit Avenue, St Paul, MN, 55105, United States of America, yangmuer@stthomas.edu, Michael Fry, Corey Scurlock
Mt. Sinai Hospital is struggling to respond to the high demand for Intensive Care Units (ICUs). Post-surgery, patients are generally transferred to the ICU. If no ICU bed is available, a scheduled surgery has to be postponed deferring the profits from surgery and costing both the hospital and the patients health. Our goal is to help the hospital optimally schedule surgeries given the limited number of beds in ICU. Our solution method combines simulation and optimization techniques.
3 - An Eigenfunction Expansion Approach to Optimal Stopping with Applications to Commodity Derivatives Lingfei Li, Northwestern University, Department of Industrial Engineering, 2145 Sheridan Road, Evanston, IL, 60208, United States of America, lingfeili2012@u.northwestern.edu, Vadim Linetsky
In this paper, we solve the finite horizon discrete time optimal stopping problem for one-dimensional m-symmetric Markov processes using eigenfunction expansion. Under general conditions, we prove that the corresponding continuous time solution is the limit of the discrete time solution. As an application, we consider pricing Bermudan style commodity futures option under the SubOU model introduced in Li and Linetsky (2010), and obtain the American option value by extrapolation.
WB32
C - Room 217BC
High-Speed Rail: International Experience and Research Needs in US

Sponsor: Railway Applications Sponsored Session
Chair: Xuesong Zhou, University of Utah, Salt Lake City, UT, 84112, United States of America, zhou@eng.utah.edu 1 - Analyzing the Influence of Train Operation Plan on Passenger Demands of High Speed Railway Shiwei He, Professor, Beijing JiaoTong University, School of Traffic and Transportation, Beijing, 100044, China, shwhe@bjtu.edu.cn, Zuoyi Liu
This talk evaluates the potential market share of high speed rail (HSR) by calibrating the Nested Logit mode choice models. With the sample data of Wuhan to Guangzhou HSR in China, the relationship of the passenger volume split share proportion and the several key operation factors such as the train stop plan, operation frequency, operating time and fares are analyzed. The findings are valuable for predicting HSR market shares by improving the train operation plan.
4 - Adaptive Algorithmic Trading with Market Impact Shijie Deng, Georgia Institute of Technology, School of ISYE, Atlanta, GA, United States of America, deng@isye.gatech.edu, Jiangchuan Yuan, Jim Dai
We develop an adaptive trading algorithmic for trading large quantity of stocks. The objective is to minimize mean-variance of the implementation shortfall through trading off the market impact cost of fast-trading with the volatility risk from slow trading. By reformulating the problem into MDPs and using a parsimonious state representation, we obtain fully price-adaptive trading strategy that numerically outperforms alternative trading schemes proposed in existing literature.
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C - Room 217A
Improving Efficiency in Healthcare Operations

Chair: Muer Yang, Assistant Professor, University of St Thomas, MCH 316, 2115 Summit Avenue, St Paul, MN, 55105, United States of America, yangmuer@stthomas.edu 1 - Reducing Length of Stay in Hospital Emergency Rooms through Process Redesign Lijie Song, MIT-Zaragoza International Logistics Program, Edificio Nayade - Portal 5, c/bari 55, PLAZA, Zaragoza, Spain, lsong@zlc.edu.es, Nicole DeHoratius, Thomas Lee
2 - High Speed Rail Requirements in North America Steven Harrod, Asst. Professor, University of Dayton, 300 College Park, Dayton, OH, 45459, United States of America, Steven.Harrod@udayton.edu
Multiple economic and demographic indicators (population, fuel cost) project that high speed rail will grow in importance in the United States and Canada. However, North America lags behind other nations in high speed rail operating mileage, and consequently, lags behind in research depth. Further, North America operates a much higher freight traffic density than Europe. Consequently, North American high speed rail requires greater investigation into shared network operations and scheduling.
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3 - High-Speed Railway in Korea: Past, Present and Future Jun Oh, Associate Professor, Western Michigan University, Kalamazoo, MI, 49008-5316, United States of America, jun.oh@wmich.edu, Yeonkyu Kim
The presentation talks about the high-speed railway in Korea. Koreas high-speed railway, called Korea Train Express (KTX), connects major cities in Korea along the Koreas major transportation corridor between Seoul and Busan. Its first stage was completed in 2004, and the second stage in 2010. KTX has greatly changed the intercity travel pattern and mode choices. Korea plans to expand the high-speed railway network for better rail services.
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5 - Robust Optimization Approach to Uncertain Redundancy Allocation Problems Mohammadjavad Feizollahi, Student, Georgia Institute of Technology, 1760 Northside Dr. N.W., Apt:102, Atlanta, GA, 30318, United States of America, feyzollahi@gmail.com, Mohammad Modarres, Shabbir Ahmed
We consider redundancy allocation in series-parallel reliability optimization problems and develop linear equivalent mixed integer programming and binary models. Then, we consider interval and budgeted uncertainty in component reliabilities, develop the robust counterparts of the problems, and develop different methods to solve them. Finally, we compare these methods with respect to their relative computational performance and examine the quality of robust solutions by simulation.
4 - An Integrated Optimization Model and Algorithm for Rail Train Operating Plan and Locomotive Baohua Wang, Staff Researcher, IBM Research - China, Analytic & Optimization, Beijing, China, baohuaw@cn.ibm.com, Howard Rosen
Train operating plan and locomotive allocation are optimized in an integrated model. A continuous time-space network is constructed to describe the train plan while locomotives can be treated as a special kind of flow as well as cars which should be transported. The objective is minimizing the train operating cost and light travel of locomotives. There are some rules (maintenance and fueling, etc.) when allocating locomotives. The algorithm should take the rules into consideration.
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C - Room 218A
Operations Research in the Federal and Governmental Sectors

Chair: Lawrence Fulton, Texas State University, 601 University Drive, San Marcos, TX, 78108, United States of America, lf25@txstate.edu 1 - Optimizing Army MEDEVAC Helicopter Emplacement: A Scenario-based, Multi-criteria Modeling Approach Nathaniel D. Bastian, Center for AMEDD Strategic Studies, U.S. Army Medical Department Center & School; Center for Operations Research in Medicine and Healthcare, Georgia Institute of Technology, 94-277 Makapipipi St Apt 121, Mililani, HI, 96789, United States of America, nathaniel.bastian@fulbrightmail.org
The U.S. Armys health service support system remains particularly effective by employing aeromedical evacuation (MEDEVAC) assets to efficiently evacuate casualties from the battlefield. Military commanders in Afghanistan have faced a significant combinatorial challenge integrating these life-saving yet limited assets into a comprehensive system for the entire combat theatre. This work describes a scenario-based, multi-criteria modeling approach to optimize Army MEDEVAC helicopter emplacement.
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C - Room 217D
Large-Scale Networks and Applications

Chair: Abe Zeid, Northeastern University, Room 334SN, Boston, MA, United States of America, zeid@coe.neu.edu Chair: Sagar Kamarthi, sagar@coe.neu.edu 1 - Exploring the Foreclosure Contagion Effect Using Agent-Based Modeling with Social Networks Andrew Collins, Research Assistant Professor, VMASC, Old Dominion University, 1030 University Blvd, Suffolk, VA, 23435, United States of America, ajcollin@odu.edu, Seiler Michael, Nina Fefferman
The global financial markets have experienced a significant recession over the last several years; as a result the number of foreclosures has risen dramatically. Recent studies have shown reduction in real-estate values due to neighboring foreclosures. This presentation shows the results from applying an agent-based model to explore the foreclosure contagion effect including imposing a social network on the model to investigate the impact of strategic defaults becoming more socially acceptable.
2 - Manpower Optimization Models in Army Healthcare Pat Downes, PhD Student, McCombs School of Business, University of Texas, 1 University Station, B6000, Austin, TX, 78712-1178, United States of America, Patrick.Downes@phd.mccombs.utexas.edu
The U.S. Armys Medical Department (AMEDD) uses goal programming models to manage manpower policies. AMEDD models determine the annual number of officer accessions and promotions to meet the Armys personnel requirements. This research investigates whether a single optimization model encompassing the six diverse career management branches might be implemented as a decision support tool to ensure truly optimal manpower planning policies.
2 - A Decision on Innovativeness Focusing on an Efficient Social Network Structure Oguz Cimenler, University of South Florida, 4202 E. Fowler Avenue, ENB118, Tampa, Tampa, FL, 33620, United States of America, ocimenle@mail.usf.edu, Kingsley A. Reeves
This paper describes our work towards determining the potential innovativeness of an individual in a social network. To accomplish this, we will compute the number of appearances that a particular node has in the complete graphs that are found.
3 - A Discrete Event Simulation of Future Aerial Vehicles Lawrence Fulton, Texas State University, 601 University Drive, San Marcos, TX, 78108, United States of America, lf25@txstate.edu
We use discrete event simulation to estimate the effects of emerging aerial capability in executing the scout, attack, and medical evacuation missions given certain military scenarios. The results of the discrete event simulation will be used to inform both civilian and military decision makers regarding cost-utility trade-off considerations. Manipulated variables include speed, survivability, lift capacity, hover capability, payload capability, maintenance characteristics, and others.
3 - Community Detection in Social News Websites Roja Bandari, Ph.D. Student, UCLA, 56-125B Engineering IV Building, los angeles, CA, 90095, United States of America, roja.bandari@gmail.com, Hazhir Rahmandad
Social news websites, where users post, read, and rate stories, are now an integral part of the online experience. Detecting the social communities underlying these websites is hard due to their complex dynamics and lack of benchmark graphs. We develop validation methods and find appropriate algorithms for detection of community structures from the voting patterns in these contexts. The approach is tested on data from a large social news website.
4 - Reliability Evaluation Using Fuzzy Sets for Systems with Continuous Performance Degradation Zhaojun Li, University of Washington, Department of Industrial and Systems Eng, Box 352650, Seattle, WA, 98105, United States of America, zjli@uw.edu, Kailash Kapur
This paper proposes a new approach to model reliability for a system using fuzzy sets. The fuzzy success membership function is defined over the universal set of performance degradation. For systems with continuous performance levels, it is shown that the time to fuzzy failure can be modeled as a fuzzy random variable. The membership function for the expectation of TTFF can be evaluated using the decomposition theorem or extension principle with theoretical results showing their equivalency.
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C - Room 218B

3 - Change Point Problems in Complex Data from Health Care and Clinical Area Sung Won Han, Researcher, University of Pennsylvania, 423 Guardian Dr, Philadelphia, PA, United States of America, hansungw@mail.med.upenn.edu
The detection of the change point or the starting point of drop-down is one of the key problems in health care and biostatistics. However, the recent data from diseases spreading or clinical area in hospitals are so complex that the existing methods may not work well. In this presentation, we discuss several challenging issues in the change-point problems from complex data and propose better approaches based on the likelihood ratios or the reproducing kernel Hilbert space-based spline.
Quality Management
Contributed Session
Chair: Raja Jayaraman, Assistant Professor, Khalifa University of Science, Technology & Research, P.O. Box 127788, Abu Dhabi, United Arab Emirates, raja.jayaraman@kustar.ac.ae 1 - Non-GE Six Sigma Thong Goh, Professor, National University of Singapore, 10 Kent Ridge Crescent, Singapore, 119260, Singapore, isegohtn@nus.edu.sg
After a quarter of a century, Six Sigma and its variants such as Design for Six Sigma and Lean Six Sigma is still being promoted frequently on the basis of greed and fear: greed for the promise of three hundred thousand dollars return per project, and fear because figures seem to show that ninety-nine percent defect-free is not good enough. Whats more, If GE can, why cant we? So the question is, does Six Sigma have to be promoted this way? Or, indeed, is Six Sigma the only way?
4 - Postsurgical Complication Patterns Based on Laboratory Test Results and Electrical Heart Signals Diego Martinez, PhD Student, University of South Florida, 4202 E Fowler Avenue, ENB 118, Tampa, FL, United States of America, Monica Puertas, Jos L. Zayas-Castro, Peter Fabri, Hui Yang
The objective of the proposed research is to develop an alarm system that monitors post-surgical patients using laboratory blood test results and electrical heart signals; cardiovascular surgery is used as a prototype. The system will help physicians to timely identify and assess the risk of complications and death during the patients recovery cycle, advancing the provision of personalized patient care.
2 - Six Sigma Program Evaluations in Healthcare: A Case Study Andres David Gonzalez, Universidad de los Andes, Cra 1 Este #19A-40, Bogota, Colombia, david-g1@uniandes.edu.co, Raha Akhavan-Tabatabaei
We present a case study for evaluating the effect of Six Sigma program in a medical hospital over its ten years of operation. A set of over ninety Six Sigma projects is evaluated for their impact on the organizational strategic objectives, financial benefits, organizational culture and sustainability of results.
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3 - Optimization of Pro-Rata Warranty Models with Burn-in Criteria Raja Jayaraman, Assistant Professor, Khalifa University of Science, Technology & Research, P.O. Box 127788, Abu Dhabi, United Arab Emirates, raja.jayaraman@kustar.ac.ae, Edward Pohl, Timothy Matis
Designing optimal product warranties include issues such as reliability, product conformance, customer satisfaction besides minimizing expected costs for servicing. In this presentation we develop a new warranty model considering burn-in and pro-rata costs for servicing product warranties.
Vehicle Routing Problem

Contributed Session
Chair: Ertan Yakici, Middle East Technical University, Ankara, Turkey, rtnykc@gmail.com 1 - Ant Colony Optimization (ACO) Solution for Split Delivery Vehicle Routing Problem (SDVRP) Joseph Wilck, University of Tennessee, Knoxville, 411 East Stadium Hall, Knoxville, TN, 37996, United States of America, joe.wilck@gmail.com, Gautham Rajappa
Split Delivery Vehicle Routing Problem (SDVRP) is a relaxed form of Capacitated Vehicle Routing Problem (CVRP) in which a customer can be visited by more than one vehicle i.e. customers can be assigned to multiple routes. An Ant Colony Optimization based algorithm is presented to solve the SDVRP and is tested on benchmark test problems.
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C - Room 219B
Complex Systems Quality Monitoring and Control

Chair: Hui Yang, Assistant Professor, University of South Florida, 4202 E Fowler Avenue ENB118, Tampa, FL, 33647, United States of America, huiyang@usf.edu 1 - Fault Diagnosis Using Relevance Vector Machine for underdetermined Multistage Assembly Processes Zhenyu (James) Kong, Assistant Professor, Oklahoma State University, Stillwater, OK, 74078, United States of America, james.kong@okstate.edu, Kaveh Bastani, Wenzhen Huang
Fault diagnosis has a significant impact on providing high quality products in multistage assembly processes. Various diagnosis methodologies have been proposed based upon product quality measurements. They mostly focus on determined multistage cases where the number of measurements is greater than the number of error sources. This paper proposes a diagnosis method integrating state space approach and relevance vector machine for underdetermined cases that have not been systematically studied.
2 - A Heuristic Method for Solving Capacitated Team Orienteering Problem Behrooz Kamali, Ph.D. Student, Virginia Tech, 250 Durham Hall, Blacksburg, VA, 24061, United States of America, kamali@vt.edu, Leily Farrokhvar, Ashlea Bennett
In a given network, there are profits and demands associated with each vertex and travel times associated with each edge. A fleet of capacitated vehicles, each constrained by a travel time limit, is to serve these vertices. Each vehicle is only allowed to serve one vertex. The goal in this problem, which is called capacitated team orienteering problem (CTOP), is to maximize the collected profit. We propose a heuristic to solve this problem for large instances and present the numerical results.
3 - Parallel Strategies for Rich Large-Scale VRPs Arne Lkketangen, Professor, Molde University College, Briveien 2, Molde, 6411, Norway, arne.lokketangen@himolde.no, Jianyong Jin, Teodor Gabriel Crainic
We look at various strategies for communication and cooperation between parallel cooperative meta-heuristic solvers for rich, large-scale VRPs. Results on the solution quality and the robustness aspects of the resulting solver system will be presented.
2 - Multiscale Recurrence Analysis of Long-term Nonlinear and Nonstationary Time Series Hui Yang, Assistant Professor, University of South Florida, 4202 E Fowler Avenue ENB118, Tampa, FL, 33647, United States of America, huiyang@usf.edu, Yun Chen
Recurrence analysis is a powerful tool to characterize nonlinear and nonstationary behaviors in complex systems. However, recurrence computation is highly expensive as the size of time series increases. To address the problem of large-scale recurrence computation, we have investigated the recurrence dynamics in multiple wavelet scales as oppose to the traditional single scale. This presented paper experimentally demonstrates the effective applications in complex systems.
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WB41
Service in E-Business and Pricing

Chair: Jianqing Chen, The University of Texas at Dallas, School of Management, Richardson, TX, United States of America, chenjq@utdallas.edu 1 - Software-as-a-Service Model: Elaborating Client-side Adoption Factors Mingdi Xin, Assistant Professor, University of British Columbia, Sauder School of Business, 660-2053 Main Mall, Vancouver, BC, V6T1Z2, Canada, Mingdi.Xin@sauder.ubc.ca
The Software-as-a-Service (SaaS) model is emerging as a viable outsourcing option. SaaS model employs the new multi-tenant architecture, which makes this outsourcing model quite intriguing. In this paper we investigate clients side determinants of SaaS adoption. We draw on economic, strategic management, and Information Systems theories to develop an empirical framework. A pilot study using data collected from an online survey provides interesting suggestive results on the empirical framework.
2 - The Effect of Learning and Integration Investment on Manufacturing Outsourcing Decisions Wenli Xiao, Ph.D. Candidate, College of Management, Georgia Institute of Technology, 800 West Peachtree NW, Atlanta, GA, 30308, United States of America, wxiao6@gatech.edu, Cheryl Gaimon
In a two-period game, a buyer determines the portion of demand to manufacture in-house versus outsource; the supplier determines the price and the investment in integration process improvement. The buyer realizes learning in its manufacturing and outsourcing costs. The supplier realizes learning in its manufacturing cost. We show how the suppliers price and integration investment decisions interact with the buyers outsourcing decision and how both firms decisions are impacted by learning.
3 - Knowledge Management Strategies for Product and Process Design Teams Gulru Ozkan, Assistant Professor, Clemson University, Department of Management, 101 Sirrine Hall, Clemson, SC, 29634, United States of America, gulruo@clemson.edu, Cheryl Gaimon, Stelios Kavadias
A managers knowledge creation strategy for product and process design teams developing a single new product is examined. Knowledge development for each team and knowledge transfer between teams create knowledge that increase levels of product and process performance (after the errors in design knowledge is recovered) which in turn drive expected net revenue. Results include the impact of rates of recovery from errors and drivers of expected net revenue on dynamic knowledge creation strategies.
2 - Does Service Quality Guarantee High Prices Online? An Integrated Model and Empirical Test Jifeng Luo, Assistant Professor, Shanghai Jiao Tong University, 535 Fahuazhen Road, Shanghai, China, jifengluo@gmail.com
The advent of the Internet has led to a proliferation of empirical work on price differences. Empirical studies suggest that a negative relationship between service quality and prices rather than a positive one is often found in online markets. An integrated model is proposed to accommodate the gaps between theories and reality. Online price data on 106 randomly selected books was collected and used for empirical tests. Our theoretical results are generally supported.
WB41
Research and Development Planning

Contributed Session
Chair: Maryam Hafezi, Wilfrid Laurier University, 75 University Avenue West, Waterloo ON N2L 3C5, Canada, hafe1390@mylaurier.ca 1 - Communicating the Value of Intangibles: The Role of Capitalization and Patent in the Software Industry Pantea Alirezazadeh, Uconn, 2100 Hillside Rd. Unit 1041, Storrs, CT, 06269, United States of America, pantea.alirezazadeh@business.uconn.edu, Amit Mehra, Ram Gopal, Sarah Rice
This study examines the relationship between patent filings and the practice of capitalizing of software development costs. We explore the impact of successfully issued patents and the firms capitalization choice, on information asymmetry between the firm and the market, analysts forecast error, and the cost of equity capital.
3 - An Economic Analysis of Online Advertising Using Behavioral Targeting Jianqing Chen, The University of Texas at Dallas, School of Management, Richardson, TX, United States of America, chenjq@utdallas.edu, Jan Stallaert
Behavioral targeting, under which users are presented with advertisements based on their past browsing and search behavior and other available information (e.g., hobbies registered on a website), has been hailed as the new Holy Grail in online advertising. In this paper, we study the economic implications when an online publisher engages in behavioral targeting.
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Organizational Learning
Chair: Charles Weber, Associate Professor, Portland State University, P.O. Box 751, Engineering and Technology Management, Portland, OR, 97207, United States of America, webercm@gmail.com 1 - The Effect of Problem Population Demographics on Organizational Learning Marcelo Pancotto, Professor, IAE Business School, Mariano Acosta s/n y Ruta Nac. 8, Casilla de Correo Nro 49, Pilar, BA, 1629, Argentina, mpancotto@iae.edu.ar
This paper contributes to research on organizational learning by defining and estimating metrics on problem population demographics, and testing their effect on quality improvement learning curves at 17 automobile assembly plants. Problem category frequency distributions follow a Power Law distribution, with high problem population diversity and low frequency counts even among the most frequent problems. These two problem population characteristics are associated to lower learning rates.
2 - A Centralized versus a Global Approach: Case Study of the Expansion Into Global Software Development Mark Colosimo, Global Director of Integrated Analytics, Urban Science, 200 Renaissance Center, Suite #1800, Detroit, MI, 48243, United States of America, macolosimo@urbanscience.com
In transforming an organization into a global, flexible organization from centralized, team-based product teams, a point of change is necessary. At Urban Science, this point occurred as the need for a new product surfaced, centralized resources were limited, and the deadlines were imminent. In order to overcome obstacles, a diverse group of resources had to be organized and managed. This case focuses on how this was accomplished and the lesson learned that could be applied to future scenarios.
3 - The Design of Green Product: The Impact of Development Cost Maryam Hafezi, Wilfrid Laurier University, 75 University Avenue West, Waterloo, ON, N2L 3C5, Canada, hafe1390@mylaurier.ca, Chunming Shi
In this research, we investigate the effect of product development cost on the decision of monopolist for selecting the proper product development strategies (Mass marketing versus Market segmentation) when a durable product is differentiated on two dimensions of qualities; called environmental and traditional quality. Our model is also considering the consumers intensity of preference for the quality of product and their willingness to pay. The environmental and economic consequences according to environmental quality, potential profit and total greenness of monopolists decision are provided at the end.
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3 - Being Held Back by the Old: Technological Adoption in the Energy Industry Ekundayo Shittu, Tulane University, A.B. Freeman School of Business, New Orleans, United States of America, eshittu@tulane.edu, Carmen Weigelt
To understand the strategic mechanisms driving the adoption of new technologies, we examine how energy firms competitive advantage is shaped by inter-temporal regulatory and market prescriptions. We apply time series crosssectional model on firm-level data with prevailing regulations to test hypotheses on the institutional characteristics of adoption. We present outcomes on the influences of green demand, knowledge complementarity, market share, and network effects on adoption strategies.
Personalized Recommender Systems

Chair: Nachiketa Sahoo, Visiting Assistant Professor, Carnegie Mellon University, 5000 Forbes ave, Posner 233A, Pittsburgh, PA, 15213, United States of America, nsahoo@cmu.edu 1 - Expecting the Unexpected: On Unexpectedness in Recommender Systems Alexander Tuzhilin, Professor of Information Systems, Stern School of Business,New York University, 44 West 4th Street, Room 8-92, New York, NY, 10012, United States of America, ATuzhili@stern.nyu.edu, Panagiotis Adamopoulos
We propose a new concept of unexpectedness as recommending those items that depart from what the user expects from a recommender system. We define and formalize this concept and discuss how it differs from the related notions of novelty, serendipity and diversity. We also propose to measure the quality of unexpected recommendations using a certain utility function. Finally, we present algorithms for providing unexpected recommendations and compare our results with some other baseline methods.
4 - Production Intermittence in Spot Markets Augusto Ruprez Micola, Universitat Pompeu Fabra, Ramon Trias Fargas 25, Barcelona, Spain, augusto.ruperezmicola@gmail.com
We address three questions, Does supply variability influence market prices?, does asset ownership mediate on the variability effects? and what is the impact of replacing reliable by intermittent capacity, as opposed to keeping them both? We study these questions analytically, and through simulations to find that the relationship between intermittent capacity and prices is negative and strongly influenced by pivotal dynamics and asset ownership.
2 - Maximizing Accuracy and Stability of Recommender Systems: A Meta-Learning Approach Gediminas Adomavicius, University of Minnesota, 321 19th Avenue South, Minneapolis, MN, United States of America, gedas@umn.edu, Jingjing Zhang
Recommendation stability is a desired property that measures the consistency of predictions. Prior research has suggested that some popular recommendation algorithms can be highly unstable. We propose a novel meta-learning approach that can be integrated with different recommendation techniques to maximize stability. Experimental results suggest that our proposed approach can achieve substantially higher stability as compared to traditional algorithms, while also improving predictive accuracy.
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Supply Chain Management II

Contributed Session
Chair: Asli Sencer Erdem, Associate Professor, Bogazici University, Department Management Information Systems, Hisar Campus, Bebek, Istanbul, 34342, Turkey, asli.erdem@boun.edu.tr 1 - Supply Chain Contract Design with Extended Warranties Kunpeng Li, Sam Houston State University, 1821 Avenue I, Huntsville, TX, United States of America, kli@shsu.edu, Suman Mallik, Dilip Chhajed
We designed supply chain contracts in the extended warranty market. We studied two commonly observed practices of selling extended warranties: through the manufacturer and through the retailer. We identify the different causes of inefficiencies in each of the two decentralized models and propose coordination mechanisms that eliminate the inefficiencies. We then provide contracts to achieve both coordination and a Pareto improvement over a wholesale price contract.
3 - Count Amplification in Top-N News Recommender Systems Balaji Padmanabhan, Anderson Professor of Global Management, University of South Florida, Tampa, FL, United States of America, bp@usf.edu, Shankar Prawesh
We focus on a common method used by media sites of recommending the N most viewed articles. For this Top-N recommender we show that the marginal next article - which may have just missed making the cutoff - is unduly penalized under simple user models. Small differences initially are easily amplified. Probabilistic selection, a simple variant that we propose and study here, creates no such artificial penalty. We present analytical and simulation results to illustrate our findings.
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2 - Sales Forecast Inaccuracy and Inventory Turnover Performance:An Empirical Study of US Retail Sector Gulsah Hancerliogullari, PhD Student, Old Dominion University, Engineering Management & Systems Enginee, 241 Kaufman Hall, Norfolk, VA, 23529, United States of America, ghancerl@odu.edu, Alper Sen, Esra Agca
An empirical model is developed to investigate the impact of various financial measures on inventory turnover performance. In particular, we use inaccuracy of quarterly sales forecasts as a proxy for demand uncertainty and study its impact on firm level inventory turnover ratios. The model is implemented on a sample financial data for 304 publicly listed U.S. retail firms for the 25-year period 19852009.
Modelling Energy Markets

Chair: Augusto Ruprez Micola, Universitat Pompeu Fabra, Ramon Trias Fargas 25, Barcelona, Spain, augusto.ruperezmicola@gmail.com 1 - Modeling Returns to Scale in an Integrated Assessment Model Erin Baker, Associate Professor, University of Massachusetts, Amherst, Amherst, MA, United States of America, edbaker@ecs.umass.edu, Greg Nemet, Robert Barron
We investigate the optimal portfolio of technology policies, choosing among R&D investment and subsidies. We consider solar PV in the context of climate change, and under the assumption of increasing returns to scale. We add technology competition and increasing returns to scale into a modified version of the DICE Integrated Assessment Model.
3 - Capacity Option Transfer Rights: When and How Do They Benefit Suppliers? Linlin Li, Northwestern University, 2145 Sheridan Road, Room C210, Evanston, IL, 60201, United States of America, linlinli2008@u.northwestern.edu, Izak Duenyas, Seyed Iravani
We consider situations where firms buy option to use the capacity of suppliers. We explore whether suppliers should provide transfer rights such that, a firm that cannot use all its reserved capacity can sell it to another firm that may need more. Comparing three strategies, we find that providing transfer rights to the buyers is better for the supplier than reserving transfer rights to itself in many cases. We provide managerial insights of the tradeoff between two typical transfer strategies.
2 - Reaction-consistent Equilibria and the Central Weakness of Oligopoly Theory Frederic Murphy, fmurphy@temple.edu, Steve Kimbrough, Yves Smeers
The Cournot model assumes that each player believes that the other players will not respond to its actions. We change the Cournot model by assuming each player has beliefs consistent with the reactions of the other players. The resulting equilibria differ from many recent results of oligopoly theory. We use agentbased models to find reaction-consistent equilibria in markets and thereby to better represent player behavior.
4 - Customer Experience Management through Supply Chain Management Hyejeong Gwon, Graduate student, Korea University, Room #516 main Bldg.of business school, Anam-dong, Seongbuk-gu, Seoul, Korea, Republic of, 11ku11@korea.ac.kr, Daeki Kim
Managing customer experience is essential in the competitive business environment. Customer experience management represents a business strategy designed to enhance customer experience all the time. It could be affected by many operations activities. In this research, we will propose some SCM topics which have the potential effect on customer experience.
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5 - A DSS for Generating Optimal Raw Milk Management Strategies in a Dairy Supply Chain Asli Sencer Erdem, Associate Professor, Bogazici University, Department Management Information Systems, Hisar Campus, Bebek, Istanbul, 34342, Turkey, asli.erdem@boun.edu.tr, Burak Gul
Raw milk in dairy system has high supply seasonality that contradicts with the demand. The inventory alternatives are very limited and demand is highly sensitive to lost sales. In this study, a mathematical model is developed to find an optimal mix of strategies that considers the whole raw milk management system. The model is embedded into a DSS where the user interface design is developed by the new generation Microsoft Ribbon interface. The DSS is applied in a real diary system.
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Individuals in Organizations II
Contributed Session
Chair: Mengxiao Zhu, 2145 Sheridan RD, C210, Evanston, IL, 60208, United States of America, mzhu@northwestern.edu 1 - Karaseks JDCS Model in China: Test and Extension Mi Zhou, School of Management, Xian Jiaotong University, No.28, Xianning West Road, Xian,China, Xian, 710049, China, zhoumi@mail.xjtu.edu.cn, Xiping Zhao, Xin Zhao
Employing data of 357 Chinese nurses, this article tests Karaseks Job DemandsControl-Support Model, finding that the two stress-relieving factors (job control and social support) cannot take effect simultaneously. In view of individual differences, this study introduces self-efficacy, and proposes that either the match between job control and high self-efficacy or the match between social support and low self-efficacy can relieve work stress. Results support hypotheses and the expanded model.
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Reliability
Contributed Session
Chair: Carlos Solorio, Assistant Professor, CETYS Universidad, Calz. CETYS s/n, Mexicali, Mexico, carlos.solorio@cetys.mx 1 - A Comparison of Metaheuristic Algorithms for Multiple Multi-level Redundancy Allocation Problem Jae-Hwan Kim, Korea Maritime University, #1813, Taejong-ro, Yeoungdo-Gu, Busan, Korea, Republic of, jhkim@hhu.ac.kr, Kil-Woong Jang
We consider a MMRAP (Multiple Multi-level Redundancy Allocation Problem) in which all available items for redundancy (system, module, and component) can be simultaneously chosen. A tabu search of memory-based mechanisms is proposed for its solution. Our algorithm is compared with the memetic algorithm which is the best in the literature on the benchmark problems. Computational results show that the tabu search substantially outperforms the memetic algorithm.
2 - Psychological Empowerment Mechanisms Linking Service Support to Job Satisfaction: A Moderated Mediation Jianling Wang, Nanjing University of Aeronautics and Astronautics, 29# Yudao Street, Economics and Managemnt College, Nanjing, 210016, China, WJL7520@126.com, Shan Li, Robin Qiu
This study examined the association between superior support and job satisfaction, and data included measures of psychological empowerment and fit as well. Using a survey from automobile repair service employees, the authors tested the proposed relationships. Results demonstrated that empowerment and fit represent key mechanisms in determining how support is associated with team performance.
2 - A Monte Carlo Method for Estimating the Global Reliability of General Networks Jess A. Rodrguez-Sarasty, Pontificia Universidad Javeriana Cali, Calle 18 No. 118-250, Cali, Colombia, rodriguez@ingenieros.com, Noel Artiles-Leon
Global Reliability is defined as the probability that there exists at least one path between each pair of nodes in a network. In telecommunications networks this is an important reliability measure whose assessment is known to be an NP-Hard problem. By means of network reductions, necessary and sufficient connectivity conditions, efficient connectivity evaluation methods and variance reduction techniques, we propose an algorithm for estimating the Global Reliability of general networks.
3 - Individual and Network Motivations for Assembling Into Project Teams Mengxiao Zhu, 2145 Sheridan RD, C210, Evanston, IL, 60208, United States of America, mzhu@northwestern.edu, Yun Huang, Noshir Contractor
This study investigates motivations for individuals to assemble in project teams. Using Bipartite Exponential Random Graph Models (or p*), we investigated players assembly into combat teams in an online game. Results show that people are more likely to join project teams to satisfy individual and social interests and accomplish difficult tasks. Further, individuals were more likely to choose teammates who have complementary skills, similar status or age, and same organization affiliation.
3 - Use of the Disutility Function on Dynamic Reliability Bounds for Multi-state Systems Carlos Solorio, Assistant Professor, CETYS Universidad, Calz. CETYS s/n, Mexicali, Mexico, carlos.solorio@cetys.mx, Kailash Kapur
The disutility function captures the customers preferences and is important to consider it when evaluating the performance of a system. Performance measures are used to compare multi-state systems with multi-states components which degrade over time. Computing dynamic reliability bounds for performance measures is easier than calculating exact values because it is computationally complex. Bounds are proposed for modeling system degradation using the homogeneous continuous time Markov process.
4 - The Effect of the Norm of Reciprocity on Organizational Citizneship Behavior: An Experimental Research Jing Yan, Xian Jiaotong University, School of Management, No.28, Xianning West Road, Xian, 710049, China, yj04081008@163.com, Yun Fan
The norm of reciprocity has effect on organizational citizenship behavior(OCB)by two ways:the obligation to reciprocite and the expectation to reciprocite.Using experimental methods, we design two scenarios to reflect the two ways of influence.Then it analyzes OCB with different other-orientation.The experimental results indicate that, facing the obligation,employees with higher other orientation exert more OCB;facing the expectation,employees with lower other orientation exert more OCB.
4 - Optimal Control of Stochastically Failing Systems with Costly Partial Information Michael Kim, PhD Candidate, University of Toronto, 5 Kings College Road, Toronto, ON, M5S 3G8, Canada, kimmi@mie.utoronto.ca, Viliam Makis
We model a partially observable deteriorating system subject to random failure. The state process follows an unobservable continuous time homogeneous Markov process. At equidistant sampling times multivariate observations that are stochastically related to the state process are obtained at a positive cost. Structural properties of the optimal control policy are analyzed, and it is shown that a control limit policy is optimal for the practical 3-state version of the problem.
5 - How Different Mass, Lean and STS Are: from Social Capital and Organizational Learning Perspective HoWook Shin, Michigan State University HRLR, 6125 Buckden Way, Apt 2i9, East Lansing, MI, 48823, United States of America, moltke777@gmail.com
High performance work system (HPWS) is characterized by an employee participation, HR practices increasing workforce skills, and higher level of wages. In this paper, I advance the theory of HWPS by comparatively analyzing traditional mass production system, LS, and STS in terms of social capital and organizational learning that have the most significant implications on HPWS because employee involvement and continuous improvement are two most representative characters of HPWS.
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Reverse Logistics and Supply Chain II

Chair: Guoqing Zhang, Professor, University of Windsor, Department of Industrial Engineering, 401 Sunset Avenue, Windsor, ON, N9B3P4, Canada, gzhang@uwindsor.ca Co-Chair: Theresa Barker, Affiliate Assistant Professor, University of Washington, Box 352650, Seattle, WA, 98115, United States of America, barkertj@uw.edu 1 - Optimal Supply Planning for a Closed Loop System with Uncertain Demand and Return Guoqing Zhang, Professor, University of Windsor, Department of Industrial Engineering, 401 Sunset Avenue, Windsor, ON, N9B3P4, Canada, gzhang@uwindsor.ca, Jianmai Shi
We study the production planning problem for a closed loop system, in which the manufacturer has two channels for supplying products: producing brand-new products and remanufacturing returns into as-new ones. A mathematical model is presented to formulate the problem and a Lagrangian relaxation based approach is developed to solve the problem. Numerical examples are presented to illustrate the model and test the solution approach.
Time in Transportation Problems

Chair: Lei Zhang, Assistant Professor, University of Maryland, 1173 Glenn Martin Hall, College Park, MD, 20742, United States of America, lei@umd.edu 1 - Integrating Dynamic Departure Time, Routing, and Traffic Simulation Models for Traffic Operations and Dynamic Pricing Analysis Lei Zhang, Assistant Professor, University of Maryland, 1173 Glenn Martin Hall, College Park, MD, 20742, United States of America, lei@umd.edu, Shanjiang Zhu, Longyuan Du, Gan-Len Chang
Subarea traffic operations and congestion management analysis often requires accurate representation of both supply-side congestion evolutions and demandside user behavior responses. This research integrates a traffic microsimulation model and a rule-based departure time and routing model to consider supplyand demand-side dynamics. The models are empirically estimated, validated, and applied to analyze the peak spreading and route diversion effects of a brand new tolled freeway in Maryland.
2 - Design of Integrated Forward and Reverse Logistics Network with Time Periods Hyangsook Lee, Rutgers University, 100 Brett Road, Piscataway, NJ, 08854, United States of America, lee.hyangsook@gmail.com, Maria Boile, Sotiris Theofanis, Georgios Saharidis, Ti Zhang
The paper presents a facility location problem of the integrated logistics network aiming to improve the efficiency of both forward and reverse logistics. Three types of facilities are identified: warehouse (forward), collection center (reverse) and hybrid center (both). The paper proposes a nonlinear mixed integer model addressing the dynamic integrated distribution network design problem. A biobjective model is developed to minimize the total shipping cost and time simultaneously.
2 - A Newton-type Algorithm for Dynamic Traffic Assignment Steve Boyles, University of Wyoming, 1000 E. University Avenue, Laramie, WY, 82071, United States of America, sboyles@uwyo.edu, Ruoyu Liu
Algorithms based on Newton-type flow shifts lead to rapid convergence for static traffic assignment; this project considers its application to dynamic traffic assignment based on the cell transmission model. Although a convex programming formulation is unavailable, path travel time derivatives can be used to generate shifts among paths. Properties of the cell transmission model are used to calculate these derivatives, and convergence properties are studied.
3 - On the Study of Reverse Logistics Channels and Inentives in a Closed-loop Supply Chain Dennis Z Yu, Assistant Professor, Clarkson University, 8 Clarkson Avenue, Potsdam, NY, 13699, United States of America, dyu@clarkson.edu, Chester Xiang
We study impacts of reverse logistics channel structures and incentives in a closed-loop supply chain. The business and individual demand segments show heterogeneous responses to the used-product return incentives. A third party may be used as an agent to collect used-products and exploit economies of scale. Three reverse logistics channel structures are investigated for the optimal incentive schemes, reverse logistics channel strategies, and resulting financial and social impacts.
3 - Simulation-based Optimization for Urban Traffic Management Carolina Osorio, Assistant Professor, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Office 1-232, Cambridge, MA, 02139, United States of America, osorioc@mit.edu, Michel Bierlaire
We present a simulation-based optimization framework that allows urban traffic simulators to be used in a tractable manner for optimization. The metamodel approach combines information from the simulator and an analytical network model. We resort to a derivative-free trust region algorithm. We evaluate the performance of the method with a signal control problem for the city of Lausanne. This method is computationally efficient and suitable for problems with tight computational budgets.
4 - Coordinating the Discount for Purchase Quantity and Transportation in a Three-party Supply Chain Ginger Y. Ke, University of Waterloo, 200 University Avenue West, Waterloo, ON, N2L 3G1, Canada, y3ke@engmail.uwaterloo.ca, James H. Bookbinder
This research studies the coordination of the quantity and transportation discount decisions in a supply chain system involving the buyer, supplier and carrier. More specifically, the discount decisions are analyzed from the perspectives of the parties who offer the discount, rather than the one that takes them. The improvements of system performance obtained from several different models are observed and compared to achieve further understandings of the coordination.
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Simulation Optimization: Ranking and Selection

Chair: Seong-Hee Kim, Associate Professor, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, GA, 30332, Georgia, skim@isye.gatech.edu 1 - Bayesian Optimization via Simulation with Correlated Sampling and Correlated Prior Beliefs Jing Xie, Cornell University, 232 Rhodes Hall, Ithaca, NY, United States of America, jx66@cornell.edu, Peter Frazier, Stephen Chick
We consider optimization via simulation over a finite set of alternatives. We employ a Bayesian value-of-information approach in which we allow both correlated prior beliefs and correlated sampling to improve overall efficiency. Correlations in prior beliefs allow us to learn about an alternatives value from samples of similar alternatives. Correlations in sampling due to common random numbers allow us to reduce the variance in comparing one alternative to another.
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2 - Indifference-zone Ranking and Selection with 10,000 or More Alternatives Peter Frazier, Assistant Professor, Cornell University, 232 Rhodes Hall, Ithaca, NY, 14853, United States of America, pf98@cornell.edu
We present a new elimination-based sequential indifference-zone procedure whose lower bound on probability of correct selection (PCS) is tight in continuous-time, and nearly tight in discrete-time. To the authors knowledge, this is the first such procedure with tight PCS bounds. The tightness of this bound now makes it computationally tractable to select the best among more than 10,000 noisy alternatives. This extends previous work on non-elimination procedures with tight PCS bounds.
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forecasters tendency to make decisions within that optimal time frame depends on his or her cognitive reflection.
4 - Buyback vs. Revenue-sharing Contracts: Influence of Suppliers Loss Aversion Yinghao Zhang, University of Minnesota, 321 19th Avenue South, Minneapolis, MN, 55108, United States of America, zhang786@umn.edu, Karen Donohue, Tony Cui
Prior analytical research shows that buyback and revenue-sharing contracts achieve equivalent channel-coordinating solutions when applied in a single supplier-buyer setting. We examine how loss aversion can lead suppliers to prefer one contract type over the other. The model predicts that loss averse suppliers prefer buyback contract in low profit margin environment while prefer revenuesharing contract in high profit margin environment. The results of a human experiment confirm our theory.
3 - Rare-event Splitting for Power Grid Problems John Shortle, George Mason University, 4400 University Dr., MSN 4A6, Fairfax, VA, United States of America, jshortle@gmu.edu, Chun-Hung Chen
One approach for simulating rare-event problems is to split the simulation into separate copies whenever it gets near the rare event. This talk investigates the application of splitting techniques to simulate blackouts in a power grid. We investigate theoretical properties of some simple grid structures in order to determine good level functions for the splitting technique. Then we apply results to more complicated networks and give numerical results.
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Transportation Modeling and Privacy Protection

Chair: Jeff Ban, Rensselaer Polytechnic Institute, 110 8th Street, Troy, NY, United States of America, banx@rpi.edu 1 - VTL Zone-Based Path Cloaking Algorithm Bin Zan, zanb@winlab.rutgers.edu, Peng Hao, Marco Gruteser, Jeff Ban
Traffic engineering applications often benefit from collecting vehicle GPS traces in well-defined locations. However, exist techniques do not guarantee both data accuracy for application requirement and privacy preserving for users consideration. In this talk, we will present a virtual trip line zone-aware path cloaking algorithm which can be used to solve this problem. Zones where data should be retained can be predefined over the intersections of interest and the path cloaking algorithm uses entropy-estimates to decide whether the data can be revealed. By comparing to a zone-unaware scheme through simulation, we will also show the significant achievement the proposed scheme can obtain.
4 - New Fully Sequential Ranking and Selection Procedure Based on Bivariate Brownian Motion Processes Seong-Hee Kim, Associate Professor, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, GA, 30332, Georgia, skim@isye.gatech.edu, Ton Dieker
We propose a new fully sequential procedure for finding a system with the largest or smallest performance measure among a finite number of simulated systems. The procedure compares systems in a group of three and eliminates a system when there is an evidence that the system is not better than the other two systems. The procedures derivation is based on the behaviors of bivariate Brownian motion processes exiting an ellipse.
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A Behavioral Perspective on Demand and Inventory Management

Sponsor: Behavioral Operations Management Sponsored Session
Chair: Enno Siemsen, Assistant Professor, University Minnesota, Carlson School, Minneapolis, MN, United States of America, siems017@umn.edu 1 - The Effect of Payment Schemes on Inventory Decisions: The Role of Mental Accounting Jordan Tong, Duke University, The Fuqua School of Business, Durham, NC, United States of America, jordan.tong@duke.edu, Gurhan Kok, Li Chen
Keeping the net cost structure constant, we study newsvendor behavior under three payment schemes the newsvendor, supplier, or customer finances the newsvendors order. We find orders are highest under newsvendor financing and lowest under customer financing. A second study shows that simply changing the framing of the problem induces similar results, suggesting the reason lies in the mental accounting of payments. Finally, we show the phenomenon is robust over high and low profit margins.
2 - Evaluation of Transportation Privacy Preserving Algorithms Using Traffic Knowledge Based Adversary Models Zhanbo Sun, sunz2@rpi.edu, Bin Zan, Jeff Ban, Marco Gruteser, Peng Hao
Mobile traffic sensors have quickly emerged recently as an important data source for traffic applications. In this research, we develop traffic-knowledge-based adversary models to attack privacy algorithms that have been proposed so far for protecting mobile data privacy. The results can hopefully provide some insight on how mobile data should be collected and processed in order to ensure both privacy and application data needs.
3 - Value of Travel Information: Implications for Quality of Travel Experience Yu-Ting Hsu, Purdue University, Nextrans Center, 3000 Kent Avenue, West Lafayette, IN, 47906, United States of America, yhsu@purdue.edu, Dong Yoon Song, Srinivas Peeta
We explore the value of real-time travel information in terms of the improvement in traveler experience, which involves both physical and psychological aspects. In the context of different travel environments, an analytical framework based on traveler behavioral aspects is proposed to discuss the psychological effects of information provision on travelers decision-making processes and their perceptions of the system.
2 - Planning for Uncertainty with Bankruptcy Risk and Target-based Payoffs Nelson Lau, INSEAD, 1 Ayer Rajah Avenue, Singapore, 138676, Singapore, Nelson.LAU@insead.edu, Neil Bearden
The Newsvendor model assumes unlimited wealth. Outcomes in one period are inconsequential for subsequent decisions. We consider carryover wealth effects. An agent begins with an endowment. Each season, he may only order up to his current wealth if wealth falls below unit cost, the agent is bankrupt. This prescribes conservatism in early ordering decisions. We experimentally investigate real agents behavior. We also explore how the model and behavior change with target-based payoffs.
4 - Modeling Route Choice Behavior in a Driving Simulator with Real-time Information Hengliang Tian, University of Massachusetts Amherst, 141 Marston Hall, 130 Natural Resources Road, Amherst, MA, 01003, United States of America, thliang17@gmail.com, Donald L. Fisher, Brian Post, Song Gao
We investigate travelers strategic route choice behavior in a risky traffic networks using data collected from a driving simulator, namely whether travelers plan ahead for real-time information en-route. A mixed logit model with latent classes is estimated, and the results show that both strategic and non-strategic types of users exist, a moderate learning effect, and the adverse impact of network complexity on forward thinking.
3 - Deliberate or Intuitive: Decision Speed and Cognitive Reflection in Demand Forecasting Behavior Enno Siemsen, Assistant Professor, University Minnesota, Carlson School, Minneapolis, MN, United States of America, siems017@umn.edu, Mirko Kremer, Brent Moritz
This research analyzes how decision speed in time series forecasting impacts forecast performance, and how individual differences influence this decision speed. Data from a behavioral experiment shows that forecasting decisions that are either too slow or too fast lead to poorer forecasting performance. Further, a
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5 - A New One-Level Convex Optimization Approach for Estimating Origin-Destination Demand Wei Shen, Post-doctoral Researcher, IBM Watson Research Center, 1101 Kitchawan Rd, Yorktown Heights, NY, 10598, United States of America, wshen@us.ibm.com, Laura Wynter
We propose a new one-level convex optimization formulation to reasonably approximate the bilevel OD estimation structure, thus allowing the development of efficient solution algorithms. The approach improves previous one-level formulations in the literature by equilibrating flows using external path cost parameters. It can be viewed as a special case of UE assignment with elastic demand, and be solved efficiently by path-based assignment algorithms with an iterative parameter updating scheme.
Bayesian Inference and Computational Issues

Chair: Tevfik Aktekin, University of New Hampshire, 15 Academic Way, McConnell 439, Durham, NH, 03824, United States of America, tevfik.aktekin@unh.edu 1 - Health Insurance Fraud Detection through Bayesian Clustering Toros Caglar, The George Washington University, 2201 G ST NW, Funger Hall, Suite 415, Washington, DC, 20052, United States of America, toros@gwu.edu
One popular healthcare fraud scheme involves sharing stolen patient identities among groups of healthcare providers, where the stolen information can be used to bill false claims. In this work, we develop a Bayesian grouping methodology to help identify potentially stolen patient identities as well as the groups of providers that show sharing behavior. The proposed approach brings additional information by creating the patient and provider groups simultaneously at the cost of computation time.
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Facility Logistics VI
Sponsor: Transportation Science and Logistics/Facility Logistics Sponsored Session
Chair: Yugang Yu, Assistant Professor, Rotterdam School of Management, Erasmus University, Rotterdam, Netherlands, yyugang@rsm.nl 1 - Generalized Asymmetric Traveling Salesman Problem: Sequencing Storage and Retrieval Containers Amir Hossein Gharehgozli, PhD Candidate, Rotterdam School of Management, P.O. Box 1738, Rotterdam, 3000 DR, Netherlands, AGharehgozli@rsm.nl, Yugang Yu, Rene de Koster
We study how to select storage locations for storage containers while a set of storage and retrieval containers are sequenced in a block by minimizing the travel time of an automated crane. Multiple input/output (I/O) points are located at each side of the block. Every I/O point has a set of storage containers each with a given set of storage locations. The problem is modeled as a generalized asymmetric traveling salesman problem (GATSP) and solved by transforming the GATSP to the ATSP.
2 - A Hierarchical Bayesian Model with Inflated Beta Mixtures R. Muzaffer Musal, Assistant Professor, Texas State University, 115 Sandra Muraida Way apt 207, Austin, TX, 78703, United States of America, rm84@txstate.edu, Lawrence Fulton
We investigate questions involving the impact of covariates on the scores of a comprehensive exit exam that 120 undergraduate students via a Bayesian hierarchical model. The model makes use of a mixture of Beta distributions, inflated for the purposes of modeling students who are no-shows. We come up with the probability distribution of letter grade test scores as well as the probability that a student will belong to a particular grade cluster. We discuss model fit via cross validation.
2 - Decentralization and Trade-offs of Equity and Efficiency in Humanitarian Fleet Management Systems Maria Besiou, Postdoctoral Fellow, INSEAD, Social Innovation Centre, Fontainebleau, France, Maria.Besiou@insead.edu, Alfonso J. Pedraza-Martinez, Luk Van Wassenhove
Humanitarian Organizations manage the fleets using three systems: Centralized: decisions are made by the fleet management unit (FMU). Decentralized: there is no global FMU, decisions are made at program level. Hybrid: combines features of centralized and decentralized. Using system dynamics, we model the three systems exploring trade-offs of equity and efficiency for relief and development programs. Our findings help understand which system should best satisfy a particular organizations needs.
3 - Bayesian State Space Modeling of Poisson Time Series Tevfik Aktekin, University of New Hampshire, 15 Academic Way, McConnell 439, Durham, NH, 03824, United States of America, tevfik.aktekin@unh.edu, Refik Soyer
In this study, we introduce a general class of Poisson time series models. In doing so, we develop discrete time state space models with Poisson measurements and their Bayesian inference via Markov chain Monte Carlo methods. Furthermore, we discuss issues of model properties, sequential updating/filtering, smoothing and forecasting. In order to show the implementation of the proposed models, we use real count data and discuss further implications of the Bayesian approach.
4 - Dynamic Probit Models Refik Soyer, Professor, George Washington University, Department of Decision Sciences, Washington D.C. 20052, United States of America, soyer@gwu.edu
In this paper we consider a dynamic probit model where the coefficients follow a first-order Markov process. We present an exact Gibbs sampler for Bayesian analysis of the model using the data augmentation approach of Albert and Chib (1993) and the forward filtering backward sampling algorithm of FruhwirthSchnatter (1994) for dynamic linear models. We discuss how our approach can be used for dynamic probit models as well its generalizations including Markov regressions and models with Student link functions. We also present an approach to compare static and dynamic probit models as well as for Markov order selection in these class of dynamic models. We implement our approach to some actual data.
3 - Reduction of CO2 & Energy Cconsumption in Logistics in Bulgaria by Development of Green Supply Chains Vikenti Spassov, Professor, University of Transport, 158 Geo Milev Street, 16 en.B Hemus Street, Sofia, 1111, Bulgaria, vikenti.spassov@yahoo.com
The trend towards developing a green supply chain is now gaining popularity but most companies are still coming to terms with how this can be achieved.The paper presents results of projects for the decreasing of the power consumption in cold storage by optimization of the storage systems and the organization and using a fuel cell lift trucks.For minimizing of the space of storage by the optimization of storage systems we propose two alternatives and the mathematical models for them.
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4 - Game Theoretic Models for Competition in Public Transit Services Janny M.Y. Leung, The Chinese University of Hong Kong, Systems Engineering & Eng. Mgt. Department, Hong Kong, Hong Kong PRC, janny@se.cuhk.edu.hk, Eddie Chan
As metropolitan areas grow, commuting needs increase the burden on public transport systems, leading to traffic congestion and pollution. We model the competitive situation when several service providers offer public transit services using potential games, and discuss mathematical programmes for finding their Nash equilibria. We investigate the relative merits and tradeoffs for different structures of transit networks, and the interplay between the services offered and system ridership.
Joint Session JFIG/INFORM-Ed: Panel Discussion: Distance, Not Distant Education

Sponsor: Junior Faculty Interest Group/INFORM-ED Sponsored Session
Chair: Malini Natarajarathinam, Assistant Professor, Texas A&M University, 3367 TAMU, College Station, TX, 77843, United States of America, malini@entc.tamu.edu 1 - Distance Education, Not Distant Education Moderator: John Kros, Associate Professor of Marketing and Supply Chain Management, East Carolina University, 3205 Harold Bate, Greenville, NC, 27858, United States of America, krosj@ecu.edu, Panelists: Daniel Conway, Chris Keller, James Barnard, Malini Natarajarathinam
JFIG/INFORM-Ed panel on distance learning. 5 Panelists will interactively discuss distance education.
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3 - The Impact of Physician Processes on Cost and Quality of Care Jillian Berry, Harvard Business School, Boston, MA, 02163, United States of America, jberry@hbs.edu, Anita Tucker
We are interested in understanding the relationship between quality and cost in the hospital setting, a field characterized by high worker autonomy and few defined processes. First we provide a broader overview of the relationship between cost and quality and then we move deeper into specific processes that affect each metric.
Joint Session Analytics/CPMS: O.R. Practice for a Smarter Energy Industry

Chair: Weiwei Chen, Scientist, GE Global Research, 1 Research Circle, Niskayuna, NY, 12309, United States of America, chenw@ge.com 1 - Integrated Order Allocation and Distribution Scheduling for Wind Turbine Supply Chain Bex Thomas, Researcher, General Electric Global Research, 1 Research Circle, Niskayuna, NY, 12309, United States of America, thomasb@ge.com
We present a structured optimization based framework to allocate order quantities of wind turbine parts for active projects to selected turbine part suppliers and schedule the dispatch of these orders on a daily basis to meet required service levels and target costs.
4 - RTLS-based Ubiquitous Healthcare Management System Design and Implementation Xiaoyu Ma, Wayne State University, Detroit, MI, United States of America, xiaoyu.ma@wayne.edu, Kai Yang
The healthcare system has been challenged by ineffective medical supply, countless medical errors and escalating costs. Real-time Location System (RTLS) is recognized as a new resolution to increase visibility and drive operational efficiency. According to the theory of Information System Design Theory, lean management and task-technology fit, a hybrid design and implementation framework to implement RTLS in a hospital is proposed to reduce costs and improve medical service performance. A case study in the Veterans Affairs hospital system is presented.
2 - Agent Based Modeling of Home Electricity Consumption Jason Black, GE Global Research, 1 Research Circle, Niskayuna, NY, 12309, United States of America, blackj@ge.com
The talk presents an agent based modeling methodology for assessing consumer electricity consumption behavior. End use devices are modeled physically and their usage is able to be modified by assigning behavioral profiles for each consumer. The model enables assessment of various consumer behavioral responses to time of use pricing schemes and calculates teh changes in household energy consumption based on pricing and behavioral scenarios.
5 - Characterizing Gap between Healthcare vs. Retail Supply Chain Vijith Malayil Varghese, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, AR, 72701, United States of America, vvarghe@uark.edu, Heather Nachtmann, Manuel Rossetti, Brian Smith, Edward Pohl, Server Apras, Fan Zhang, Tanvir Sattar
In this presentation we identify and characterize some gaps between the retail and healthcare supply chains and assess the potential impact if the practices associated with the gaps were utilized to a higher degree in the healthcare sector. We focus on best supply chain practices from the retail sector and determine opportunities and implementation issues related to pursuing these practices in the healthcare supply chain. Preliminary project findings are presented.
3 - Optimal Scheduling of Demand Response Events for Electric Utilities Weiwei Chen, Scientist, GE Global Research, 1 Research Circle, Niskayuna, NY, 12309, United States of America, chenw@ge.com, Rajesh Tyagi, Jason Black
In demand response programs, electric utilities are usually allowed to schedule a limited number of events per year. For some programs, such as variable peak pricing, there are multiple electricity pricing levels that make the event scheduling more complicated. We propose a solution approach to optimize the expected total savings, accounting for potential benefit of deferring an event and future temperature prediction. Dynamic threshold values are provided to utilities for decision making.
WB57
Optimization and Analysis Models for Air Traffic Management

Chair: Ioannis Simaiakis, PhD Candidate, Massachusetts Institute of Technology, 77 Massachusetts Avenue, 35-217, Cambridge, MA, 02139, United States of America, ioa_sim@mit.edu 1 - An Assessment of the New Runway at Charlotte Airport Hamsa Balakrishnan, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, hamsa@mit.edu, Ioannis Simaiakis
We assess the impact of the new runway at Charlotte Airport. We investigate the trade-off between longer taxi-in times and higher capacity and the utilization of the new runway. We show that the added capacity is underutilized, although taxi-times have decreased. For this, we use new capacity estimation methods and the DELAYS queuing engine for the simulation of operations. We show the need to go beyond traditional capacity estimation and steady-state queuing analysis in studying this problem.
WB56
Topics in Health Care

Contributed Session
Chair: Vijith Malayil Varghese, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, AR, 72701, United States of America, vvarghe@uark.edu 1 - Analysis and Exploration of Health Care Supply Chains Zhongxian Wang, Montclair State University, 1 Normal Avenue, Montclair, NJ, 07043, United States of America, wangj@mail.montclair.edu
The health care industry is one of the largest enterprises in the United States. Contradictory health care reform debates have never been diminished. The health care supply chain has received increasing attention in recent years. In this paper, we will review the current state of health care supply chains and the future trends.
2 - The Impact of Security Practices on Regulatory Compliance and Security Performance Juhee Kwon, Center for Digital Strategies, Tuck School of Business, Dartmouth College, Hanover, NH, 03755, United States of America, juhee.kwon@tuck.dartmouth.edu, M.Eric Johnson
The study examines how a healthcare organizations security practices (including IT controls, policies, education, and hiring practices) influence their perceived regulatory compliance as well as their actual security performance. We utilized qualitative and quantitative survey data from 250 healthcare organizations. Using the HLM, we demonstrate that audit polices are positively associated with perceived regulatory compliance and security policies are associated with security performance.
2 - Exploring Different Problem Formulations to Evaluate Environmental Impact of Aviation Isaac Tetzloff, Graduate Student, Purdue University, 701 W. Stadium Avenue, West Lafayette, IN, 47907, United States of America, isaact@purdue.edu, William Crossley
Engineering analyses can predict noise and emissions of new aircraft; however, evaluating the new aircrafts fleet-level environmental impact needs a representation of how airlines use the new aircraft. This involves a problem to maximize airline profit while meeting demand. Formulations explored include an integer allocation, a linear allocation, and a binary scheduling problem; the desired formulation provides appropriate fleet environmental metrics at reasonable computational cost.
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2 - Dynamic Knowledge Management with Rotating Personnel Resources in a Service Setting Robert Burgess, Georgia Tech, College of Managemenet, Atlanta, GA, 30308, United States of America, Robert.burgess@mgt.gatech.edu, Craig Hill
Many service environments struggle with knowledge management and its continuity going forward. Some organizations are further constrained by gaining and losing their operating personnel based on a finite planning horizon. This presentation reports on the investigation of this problem as it specifically impacts several organizations on college campuses.
3 - Robust Optimization for Runway Configuration Management Rex K. Kincaid, Computational Operations Research Director, College of William and Mary, Sloan School of Management, Department of Mathematics, Williamsburg, VA, 23187-8795, United States of America, rrkinc@wm.edu
The Runway Configuration Management (RCM) problem governs what combinations of airport runways are in use at a given time for an airport or a collection of airports. Runway configurations (groupings of runways), operate under Runway Configuration Capacity Envelopes(RCCEs) which limit arrival and departure capacities. The RCCE identifies unique capacity constraints based on which runways are used for arrivals, departures, and their direction of travel. When switching between RCCEs, due to a change in weather conditions or a change in the demand pattern, some decrement in arrival and departure capacities is incurred during the transition. A two-stage computational experiment is conducted to collect data. We report computational experience with two distinct model approaches-robust optimization, and a deterministic mixed integer linear program. Strengths and weaknesses of each approach are discussed. Test case scenarios are based on data from the John F. Kennedy international airport in New York.
3 - Adaptive Replication: The Reutilization of Knowledge Assets in Fast Changing Environments Stefano Miraglia, Imperial College Business School, Tanaka Building, South Kensington Campus, London, SW7 2AZ, United Kingdom, stefano.miraglia@imperial.ac.uk, Andrea Prencipe, Andrew Davies
Reusing knowledge entails dealing with two opposing forces: while the advantages of replication push for reproducing knowledge exactly, exogenous changes impose some adaptation. This qualitative study analyzes two large firms that have been dealing with replication and adaptation for decades. Findings show that replication and adaptation are treated as interplaying rather than opposed. The new concept of adaptive replication is introduced to explain such interplay.
4 - A Two State Dynamic Control Model for the Airport Departure Queue Ioannis Simaiakis, PhD Candidate, Massachusetts Institute of Technology, 77 Massachusetts Avenue, 35-217, Cambridge, MA, 02139, United States of America, ioa_sim@mit.edu, Hamsa Balakrishnan
We formulate the airport surface congestion management problem as a dynamic control problem. There are two main control challenges: the random delay from the control point (the gate) to the server (the runway) and the desire to avoid threshold policies. We represent the process by a two-state semi-Markov process, and use ground surveillance data to illustrate its applicability. Finally, we use this modeling framework to derive and characterize optimal pushback policies to control congestion.
4 - Fuzzy-control Models of Knowledge-based Intelligent Service Ralph Badinelli, Professor, Virginia Tech, Department of Business Information Technology, Virginia Tech 0235, Blacksburg, VA, 24061, United States of America, ralphb@vt.edu
This paper presents conceptual models and simulation experiments of an agents epistemology and decision-making in service systems by modeling the agent as a fuzzy controller. For each engagement, an agent must make resourcecommitment decisions with incomplete knowledge of the resource requirements and the value of the outcomes the service engagement. Through fuzzy models we capture an agents abductive and inductive reasoning in adapting to knowledge-based intelligent-service offerings.
WB58
Joint Session MAS/Tutorial: Modern Design of Experiments Recent Advances in Screening Methods
Sponsor: Military Applications Society/Turorial Sponsored Session
Chair: Tom Donnelly, SAS Institute Inc, Newark, DE, United States of America, tom.donnelly@jmp.com 1 - Modern Design of Experiments Recent Advances in Screening Methods Tom Donnelly, SAS Institute Inc, Newark, DE, United States of America, tom.donnelly@jmp.com
Attendees will be introduced to recently published Design of Experiments for screening factors. Relative to traditional regular fractional-factorial designs these new designs - non-regular fractional-factorial, definitive screening, and aliasoptimal designs - allow experimenters to run fewer trials or learn more about interactions or quadratic behavior. Graphical comparisons between these alternative methods and traditional designs will show the new ones to be superior or strong competitors.
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First-order Methods for Convex Programming and Their Applications

Sponsor: Optimization/Linear Programming and Complementarity Sponsored Session
Chair: Guanghui Lan, Assistant Professor, University of Florida, Industrial & Systems Engineering, Gainesville, FL, United States of America, glan@ise.ufl.edu 1 - A Block Decomposition Algorithm for Solving Large-scale Conic Optimization Problems Camilo Ortiz, PhD Student, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, GA, 30318, United States of America, camiort@gatech.edu, Renato D. C. Monteiro, Benar F. Svaiter
A recent work by Monteiro and Svaiter (2010) studied the complexity of block decomposition methods for solving monotone inclusion and convex optimization problems. These methods and their corresponding complexity bounds are reviewed. We also report very encouraging computational results comparing our methods with the second order algorithm SDPNAL (X. Zhao et al.) and the boundary point method introduced by J. Povh et al. The results on various large scale conic problems are quite promising.
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Models of Service Co-creation Processes

Chair: Ralph Badinelli, Professor, Virginia Tech, Department of Business Information Technology, Virginia Tech 0235, Blacksburg, VA, 24061, United States of America, ralphb@vt.edu Co-Chair: Robert Burgess, Georgia Tech, College of Managemenet, Atlanta, GA, 30308, United States of America, Robert.burgess@mgt.gatech.edu 1 - Optimally Improving Service Systems Organizational Behavior Robin Qiu, Penn State, Department of Information Science, Malvern, PA, 19355, United States of America, robinqiu@psu.edu
We show how to quantitatively model the organizational behavior of an automobile service compnay. An approach to optimally improving this service organizational behavior will be presented.
2 - Minimizing Condition Number via Convex Programming Zhaosong Lu, Assistant Professor of Operations Research, Simon Fraser University, zhaosong@sfu.ca, Ting Kei Pong
We consider minimizing the condition number of a positive semidefinite matrix over a nonempty closed convex set. We show that it can be solved as a convex programming problem. We then propose a first-order method to solve the latter problem. We also propose a convex relaxation for finding positive definite preconditioners for a positive definite matrix. This relaxation turns out to be exact when finding optimal diagonal preconditioners.
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3 - Level Methods Uniformly Optimal for Composite and Structured Nonsmooth Convex Optimization Guanghui Lan, Assistant Professor, University of Florida, Industrial & Systems Engineering, Gainesville, FL, United States of America, glan@ise.ufl.edu
In this talk, we present optimal first-order methods for large-scale convex programming (CP) without requiring the input of any problem parameters. More specifically, we present the accelerated level method and demonstrate that it can uniformly achieve the optimal iteration complexity for solving nonsmooth, weakly smooth, smooth, minmax, composite and regularized problems etc. We then present a variant of this level method uniformly optimal for solving certain bilinear saddle point problems.
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3 - Price Vs. Quantities Regulation Cristian Figueroa, Massachusetts Insitute of Technology, 77 Massachusetts Avenue, E40-149, Cambridge, MA, 02139, United States of America, cfiguero@mit.edu, David Simchi-Levi
We study regulation methods for externalities of a market equilibrium. We consider two methods: pigovian tax and the creation of quotas of the externality and auctioning of its rights. We study both methods in order to compare them, initially we show they are equivalent in a full information, no uncertainty setting. Next, we show that when uncertainties arise, tax induces a lower price under general conditions.
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4 - Impact of Carbon Credits Commercialization on Optimal Forest Harvesting Alvaro Mendoza, Ph.D. student, Duke University, Fuqua School of Business, 100 Fuqua Drive, Box 90120, Durham, NC, 27708, United States of America, alvaro.mendoza@duke.edu, Robert Clemen
We consider a forest that sells lumber and carbon credits, and develop a stochastic dynamic programming model to find the optimal harvesting and credits commercialization policy. We numerically show, for different carbon price scenarios, that the optimal expected harvest time, profit and carbon sequestered are different from those obtained when the forest only sells lumber or when, in addition to the lumber, receives (pays) payments (penalties) for the carbon sequestered (released).
Networks in Planning
Contributed Session
Chair: Simme Douwe Flapper, Eindhoven University of Technology, Den Dolech 2, Eindhoven, Netherlands, s.d.p.flapper@tue.nl 1 - A Graph-Based Hierarchical Routing Algorithm under ITS Mahyar Movahednejad, Wayne State University, Manufacturing Engineering Building, 4815 Fourth St., Detroit, MI, 48202, United States of America, mahyar@wayne.edu, Ratna Chinnam
We propose an algorithm to extract a graph-based hierarchical structure in the road network. This algorithm provides an efficient representation of the network for rerouting an en route vehicle in real-time. We then develop a routing algorithm to the extracted hierarchical network. We demonstrate the performance of the proposed algorithm using actual road network data from Southeast Michigan.
WB63
Methodological and Application Issues in MCDM Models

Chair: Adiel T de Almeida, Professor, Federal University of Pernambuco, Cx. Postal 7462, Recife, PE, 50.630-970, Brazil, almeidaatd@gmail.com 1 - Project Portfolios Selection Based on MCDM Models Adiel T de Almeida, Professor, Federal University of Pernambuco, Cx. Postal 7462, Recife, PE, 50.630-970, Brazil, almeidaatd@gmail.com, Rudolf Vetscher
Project portfolio based on multicriteria decision making (MCDM) methods area analyzed. Considerations are given to situations where the decision maker requires compensatory and non-compensatory methods. Several problems regarding the scales used for criteria are considered both in PROMETHEE and additive methods. Applications on Research and Development (R&D) project portfolio are also analyzed regarding as the scaling used for criteria.
2 - Dynamic Vehicle Routing in Networks with Arc Interactions under ITS Ali Guner, Research Assistant, Wayne State University, 4815 Fourth St., Detroit, MI, 48202, United States of America, arguner@wayne.edu, Ratna Chinnam, Alper Murat
We consider dynamic routing of a vehicle on stochastic time- and arc-dependent networks using real-time information available through ITS sources. We model arc interactions and congestion states using historical data and forecast statetransition dynamics of the network using time dependent Markov chains. The travel time and delivery performance savings can be very significant, depending on the time of day and state of the network.
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Carbon and Regulation Issues

Contributed Session
Chair: Alvaro Mendoza, Ph.D. Student, Duke University, Fuqua School of Business, 100 Fuqua Drive, Box 90120, Durham, NC, 27708, United States of America, alvaro.mendoza@duke.edu 1 - Price-Volume Dynamics of Carbon Emission Permits Ulku Gurler, Department of Industrial Engineering, Bilkent University, Ankara, Turkey, ulku@bilkent.edu.tr
Under the Kyoto Protocol, industrialized nations are required to reduce their carbon emissions. This has generated a market for emission permit trading in Europe and it is expected that similar markets will emerge globally. Based on the past and recent data, we examine the structural properties of traded permit prices and volumes within auto-regressive and Brownian motion process frameworks.
2 - Adapted Simos Prodedure for Evaluating Value Functions of Qualitative Criteria in Additive Models Danielle Morais, Assistant Professor, Federal University of Pernambuco, Av.Acad. Hlio Ramos, s/n, Cidade Universitria, Recife, PE, 50740-530, Brazil, daniellemorais@yahoo.com.br
Due to the difficulties that some decision makers have in evaluating alternatives under qualitative criteria, we propose to adapt Simos procedure to facilitate the elicitation of intra-criteria information. Associating playing cards make easier to obtain the performance of alternatives with a cardinal notion. This approach fits well within additive models which are more sensitive in assessments, increasing the importance of using an appropriate procedure rather than a simple nominal scale.
2 - Electricity Planning with Environmental Policy Uncertainty Using ADP Carbon Policies and Renewables Bryan Palmintier, PhD Candidate, Massachusetts Institute of Technology, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA United States of America, b_p@mit.edu, Mort Webster
Electric power planners and policy makers use scenario analysis for uncertainty in carbon policy and renewable incentives. These scenarios reduce model dimensionality but may miss truly optimal near-term flexible solutions. Here, we use approximate dynamic programming (ADP) to tractably find such flexible optimums despite the resulting complexity of the stochastic model (discrete, multi-period with recourse, operating reserves). Examples illustrate improved expansion plans with this approach.
3 - An MCDM Model for Orders Sequencing Adiel Almeida-Filho, Assistant Professor, Federal University of Pernambuco, Cx. Postal 7471, Recife, PE, 50630-970, Brazil, atalmeidafilho@yahoo.com.br, Marcos Sobral, Ana Paula Costa
This work presents a model and a case study for the problem of sequencing clients service orders using MCDM to consider traditional sequencing criteria and also strategic criteria which will refer specifically to the case study context, such as risk of supply shortage, transportation issues and technical aspects of the operation. The case study was performed using a Promethee method which considers outranking relations.
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4 - Model Structure for Assigning Priorities to Activities in Project Management Based on MCDM Sorting Caroline Mota, Assistant Professor, Universidade Federal de Pernambuco, Av. Acadmico Hlio Ramos, s/n - Cidade, Recife, Brazil, carol3m@gmail.com
This study proposes a decision model for helping project managers to focus on the main tasks of a project network based on a MCDA (multiple criteria decision analysis) method. As the environment is very dynamic, the model was built taking into consideration changes that may occur while a project is being carried out, and therefore the model must be reassessed during the project life cycle. An application of the model is presented in order to demonstrate the use of the model.
Retailing and Customers

Contributed Session
Chair: Qin Geng, Associate Professor, Kutztown University, 2A DF, Kutztown, PA, 19530, United States of America, qingeng@bus.illinois.edu 1 - An Analysis of Retailer Buy Back Programs Zhongwen Ma, University of Texas at Dallas, Richardson, TX, 75080, United States of America, zxm093020@utdallas.edu, Jun Zhang
Buy back programs are specially designed to mitigate the uncertainty of future value of consumer electronics. With this program, retailers can guarantee consumers a fixed residual value during a specific period of time. In this paper, we evaluate how the program works by pricing three parameters concurrently: product price, upfront fee and guaranteed refund. We also investigate how consumers risk preference impacts the policy.
WB64
Policy: Pandemic Response and Sustainable Operations

Sponsor: Public Programs, Service and Needs Sponsored Session
Chair: Dionne Aleman, University of Toronto, 5 Kings College Road, Toronto, ON, M5S 3G8, Canada, aleman@mie.utoronto.ca 1 - Optimality Gaps in Resource Allocation Decisions Caused by Using Deterministic Epidemic Models Reza Yaesoubi, Post-Doctoral Research Staff, IBM Watson Research Center, 19 Skyline Dr., Hawthorne, NY, 10532, United States of America, reza.yaesoubi@gmail.com, Ted Cohen
We consider an SIR epidemic model in which resource allocation decisions include recommendations for (1) the number of initial susceptibles to vaccinate, and (2) the number of antiviral doses needed during the epidemic. We find that the resource allocation decision informed by a deterministic model may deviate significantly from the optimal decision obtained from an equivalent stochastic model. We will discuss at length the causes of these optimality gaps.
2 - Retailing Shelf Space Allocation: A Critical Review Mehmet Erdem COSKUN, Mr., McMaster University, 385 Herkimer Street, Hamilton, ON, L8P 2J2, Canada, mehmeterdemcoskun@gmail.com
There are many products in the same category which are competing for a limited space in a retailers shelves. We conduct an extensive review the existing literature. We focus on how demand is being modelled in this context and present the major optimization models that have been used as well as the different solution approaches that have been employed. We conclude by proposing a practical and general space allocation optimization model and a research agenda in this field.
3 - Customer Arrival Process in an Appointment-based Service System Daiki Min, Assistant Professor, Ewha Womans University, 52, Ewhayeodae-gil, Seodaemun-gu, Seoul, Korea, Republic of, dmin@ewha.ac.kr
The appointment system is widely used to facilitate customer access to service in many industries including healthcare. Much research has employed queueing models, but they analyzed the system on the basis of independent customer arrivals and ignored the effects of appointment schedules. The objective of this work is to propose a model for understanding the appointment-based customer arrival process and to evaluate several appointment policies under the proposed model.
2 - Design for the Environment Life Cycle Approach Using a Newsvendor Model Gal Raz, University of Virginia, Darden Business School, 100 Darden Blvd., Charlottesville, VA, 22903, United States of America, razg@darden.virginia.edu, Cheryl Druehl, Vered Doctori Blass
Introducing environmental innovations in product and process design can affect the products cost and demand, as well as the environmental performance in different stages of its life cycle, from manufacturing, via use, and all the way to product end-of-life. In this paper, we consider a profit maximizing firm (Newsvendor) deciding on the production quantity and the environmentallyfocused design efforts. We further consider the effect of environmental carbon tax policy on the firms decision.
4 - How to Grow and Maintain a Profitable Customer Base: A Resource Allocation Perspective Greg King, University of Michigan, 1205 Beal Avenue, Ann Arbor, MI, 48109, United States of America, gjking@umich.edu, Xiuli Chao, Izak Duenyas
Striking an appropriate balance between meeting the satisfactions of existing customers and acquiring new customers is a common problem faced by firms that maintain long-term customer relationships. In this paper, we consider the investment decisions that a firm makes dynamically to allocate internal resources towards acquisition of new customers, and retention of existing ones. We use a Markov decision model approach and prove structural properties of the optimal solution.
3 - Alleviating the Cost of an Influenza Pandemic Ana Cecilia Zenteno, PhD candidate, Columbia University, 342 S. W. Mudd Building, 500 W. 120th Street, New York, NY, 10027, United States of America, acz2103@columbia.edu, Daniel Bienstock
We analyze strategies for mitigating the impact of a severe influenza epidemic on critical social infrastructure. Our approach involves the procurement of additional resources in response to a robust model of the epidemics evolution. We describe an algorithm analogous to generalized Benders decomposition that proves fast and numerically accurate. Our goal is to bring insights on the structure of optimal robust strategies and on practical rules-of-thumb that can be deployed during the epidemic.
5 - On-Air Ad Inventory Decisions under Competition Qin Geng, Associate Professor, Kutztown University, 2A DF, Kutztown, PA, 19530, United States of America, qingeng@bus.illinois.edu, Suman Mallik
We present a model for managing on-air ad inventory in broadcast television under competition. The ad inventory in this industry is sold through two distinct processes: the Upfront, which occurs before the broadcast season, and the Scatter, which occurs during the broadcast season. A firm needs to allocate its total ad inventory to these two markets before knowing either the performance of its shows or the Scatter market price.
4 - Using OR to Improve Voting Operations Theodore Allen, Ohio State University, Columbus, OH, allen.515@osu.edu, W. David Kelton, Muer Yang, Michael Fry
We propose methods to achieve equity in workload allocation problems and focus on applications to direct recording equipment (DRE) machine allocation for voting. Recent elections in the US and elsewhere have been plagued by long lines and charges of systematic bias. We develop algorithms to achieve minimax optimality for deterministic problems and rigorous bounds for formulations involving simulation. We also explore other equity objectives and compare alternatives using numerical examples and real-world election data from a case in which our methods were applied.
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Analytics Tools for Logistics II

Contributed Session
Chair: Shaligram Pokharel, Associate Professor, Qatar University, Department of Mech. and Ind. Engineering, Doha, 2713, Qatar, shaligram@qu.edu.qa 1 - Effect of Beacon Orientation on Beacon Placement Strategies in the Ultrasonic Positioning System Bin Dai, PhD Sstudent, The Hong Kong University of Science and Technology, Industrial Engineering &Logistics Manage, Tower A001, HKUST, Clear Water Bay, Kowloon, Hong Kong - PRC, dbbudstar@gmail.com, Kashek Lee
Beacon placement is critical in designing ultrasonic positioning system. Existing literature only studies placing beacons perpendicularly downward to the target moving plane. In this study, by relaxing the beacon orientation with regular lattices, we find that the hexagon placement is preferred and an improvement with a factor of 7 is readily achievable.
2 - A Pricing Model for Private and Premium Brands under Different Supply Chain Coordinations Seyed ali Hojjat, Graduate Student, Charlton College of Business, University of Massachusetts Dartmouth, 285 Old Westport Road, North Dartmouth, MA, 02747, United States of America, shojjat@umassd.edu, Soheil Sibdari, Ling Ge, Liwen Chen
A game theoretic approach is taken to model the competition between private and premium brands in a two-level supply chain. The existence and characteristics of Nash equilibrium is investigated under different supply chain coordinations in which: 1) both agents have the same bargaining power, 2) one agent moves as the Stackelberg leader, and 3) under a revenue sharing contract. We further identify the criteria under which each scenario may benefit each individual or the supply chain as a whole.
3 - Optimal Network Design for Time-varying Risk Averse Traffic Assignment Suh-Wen Chiou, National Dong Hwa University, 1 DaHsueh Road, Hualien, Taiwan - ROC, chiou@mail.ndhu.edu.tw
We propose a bilevel program to optimize network performance in a timevarying environment. A risk-averse traffic assignment is considered. Network users face link failure probabilities when choosing their best routes. Numerical case will be discussed.
2 - Logistics Warehouse Layout Design Todd Benanzer, Sr Engineer, Caterpillar, Inc, 1901 S. First St, Caterpillar, Champaign, IL, 61820, United States of America, benanzer_todd_w@cat.com, Chris Ha
Logistics warehouses contain millions of part numbers, moving tens of thousands of parts per day. A combination of automatic and manually operated transport vehicles operate around the clock to make sure all of the material is received, stored, retrieved, and shipped on time. In order to ensure an efficient operation, discrete event simulation can be used to analyze layout and equipment options. Heuristic optimization can be applied to identify the best available designs for the facility.
4 - Regulated Design-and-Pricing in Differentiated Product Markets W. Ross Morrow, Assistant Professor, Iowa State University, Department of Mechanical Engineering, Ames, IA, 50014, United States of America, wrmorrow@iastate.edu
Game theory provides an ideal framework for integrating models of regulatory policy, engineering technology, marketing strategy, and consumer preferences in differentiated product markets. This talk presents a two-stage regulated designand-pricing model being developed to assess the interplay between regulatory policies and product design. Applications to analysis of the DOT/EPAs National Program that combines fuel economy and Greenhouse Gas emissions intensity standards are discussed.
3 - A Combined Inventory and Vehicle Routing Problem Taking Third Party Logistics Provider Into Consideration Hadi Sadrsadat, Research Assistant, University of Maryland, Department of Civil & Environmental Eng., 1173 Glenn L. Martin Hall, UMD, College Park, MD, 20742, United States of America, hadisadr@umd.edu, Ali Haghani, Elham Sharifi
This research addresses the optimization of private sector inventory and distribution system. The objective is to obtain the routes for a non-homogenous fleet to meet the customers demands within their requested time window considering the inventory level at warehouses. The problem takes into account the availability of rental vehicles and subcontracting of transportation service in cases where it is more beneficial to use these services in lieu of vehicles owned.
WB68
Shipping and Transportation in Supply Chain

Contributed Session
Chair: Suri Gurumurthi, Visiting Assistant Professor, University of Illinois, Urbana Champaign, 350 Wohlers Hall, 1206 South Sixth Street, Champaign, IL, 61820, United States of America, surig@illinois.edu 1 - A Heuristic Algorithm for the Capacitated Shipping Network Scheduling with Receiving Deadlines Gang(Gabriel) Wang, Rutgers, The State University of New Jersey, 1 Wanshington Park, Newark, NJ, 07102, United States of America, gangwang@pegasus.rutgers.edu
We study the problem of scheduling a capacitated supply chain network with delivery deadlines. This problem is computationally difficult since it contains generalized assignment problem as a sub problem. We introduce a hybrid heuristic algorithm based on first-fit decreasing, our proposed special case and LP relaxation. This heuristics allows us to avoid dealing with the generalized knapsack problem directly. Empirical observations from over 500 randomly generated test cases are also reported.
4 - Analysis of Pricing of Used Products Shaligram Pokharel, Associate Professor, Qatar University, Department of Mech. and Ind. Engineering, Doha 2713, Qatar, shaligram@qu.edu.qa, Yijiong Liang
We propose a model here to analyze the price of returned products based on their quality and based on the demand on such products by the remanufacturer. The model will focus on developing pricing policy to collect used products based on the quality and the demand quantity of used products. The pricing policy and demand quantity are to be provided to the collectors of the used products. The impact of the model is analyzed through a numerical study.
WB67
Applications of Game Theory

Contributed Session
Chair: W. Ross Morrow, Assistant Professor, Iowa State University, Department of Mechanical Engineering, Ames, IA, 50014, United States of America, wrmorrow@iastate.edu 1 - Stochastic Game Models on Organ Acceptance in Liver Transplant Zhe Li, PhD Student, Northwestern University, 2145 Sheridan Road Room C231, Evanston, IL, 60208, United States of America, lizhe@iems.northwestern.edu, Gordon Hazen, Anton Skaro, James Schummer
The rank of individuals on the U.S. liver transplant wait list is determined by MELD score, which evolves stochastically. A transplant center may accept a donated organ for its patient or leave the patient on the list hoping for a better quality organ and pass the offer to lower ranked individuals. We model this situation as a stochastic game with players as transplant centers. We examine individual benefits under the equilibrium strategies.
2 - through-Store-Transshipment: A Distribution Practice for Retail Full Pallet Demand Fulfillment Agha Iqbal Ali, Isenberg School of Management\UMASS, 121 Presidents Dr., Amherst, 01003, United States of America, aiali@som.umass.edu, Milad Ebtehaj
Large discount retailers are increasing the practice of full pallet shipments to fulfill demand at their stores. In this paper, we examine the transshipment of pallet-in-pallet-out products through stores selected to serve as transfer points. We employ a clustering and optimization methodology for identifying ``throughstore-transshipment distribution channels. The methodology is applied in a computational study for the New England and Mid-Atlantic regions.
3 - Performance-based Logistic Risk Management in Closed-loop Supply Chains Rommert Dekker, Professor, Erasmus University-Rotterdam, Rotterdam, Netherlands, rdekker@ese.eur.nl, Guangyuan Yang
LATE CANCELLATION
To mitigate risks of extreme repair costs in closed-loop supply chains with performance-based contracts, we provide purchasing limits (both price and quantity) for the proactive procurement of spare parts, such that extremely expensive repairs can be prevented with limited investment in spare parts. A case study in an aircraft MRO service provider shows our results are very promising, such that the provider has implemented our decision support system in its procurement and repair operations.
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WB69
4 - Capacity Planning For Collaborative Logistics: Decentralized Equilibria and Coordination Mechanisms. Suri Gurumurthi, Visiting Assistant Professor, University of Illinois, Urbana Champaign, 350 Wohlers Hall, 1206 South Sixth Stree, Champaign, IL, 61820, United States of America, surig@illinois.edu
For a dynamic multi-commodity logistics network spanning several firms, we show how and why decentralized capacity investment equilibria are inefficient relative to the centralized optimal capacity investments. As a remedy, we are able to demonstrate that a combination of incentive and disincentive mechanisms, based on proportional risk sharing, can help coordinate the capacity investments. We highlight investment behavior for different operating regimes such as Just-inTime and Make-to-Stock.
Wednesday, 12:45pm - 2:15pm

WC01
C - Room 201A
Sourcing/Procurement and Supply Chain Management

Chair: Cuihong Li, University of Connecticut, 2100 Hillside Road, Unit 1041, Storrs, CT, 06269, United States of America, Cuihong.Li@business.uconn.edu 1 - Managing Salesforce under Demand Censorship Leon Chu, University of Southern California, Marshall School of Business, University Park Campus, Los Angeles, CA, 90089, United States of America, leonyzhu@usc.edu, Guoming Lai
We study the optimal sales force compensation under demand censorship. Under classic regularity condition, the step function is the optimal contract format. Furthermore, depending on whether the effort is additive or multiplicative, the optimal effort level may be higher or lower than the first-best effort level, and the agent may earn a demand censorship rent while the agent earns zero rent when the demand information is available.
WB69
New Business Models for Sustainable Operations

Chair: Laurens Debo, University of Chicago, 5807 South Woodlawn Avenue, Chicago, IL, United States of America, Laurens.Debo@chicagobooth.edu 1 - Collective Extended Producer Responsibility Legislation: Implementation and Design Implications Luyi Gui, Industrial and Systems Engineering, Georgia Tech, 765 Ferst Drive NW, Atlanta, GA, 30332, United States of America, luyi.gui@gatech.edu, Atalay Atasu, Ozlem Ergun, Beril Toktay
Extended Producer Responsibility (EPR) is a policy tool that holds producers financially responsible for the post-use processing of their products. EPR implementations are typically collective and the total cost is then allocated among the producers. We study efficient and fair implementation of collective EPR by designing fair and transparent cost allocation schemes. We also analyze the implications of a collective EPR policy in terms of providing design incentives to producers.
2 - Auctions for Leftovers and Returns - B2B Secondary Markets Wedad Elmaghraby, University of Maryland, College Park, MD, United States of America, Wedad_Elmaghraby@rhsmith.umd.edu, Anand Gopal, Ali Pilehvar
Using data collected from a large reverse logistics company who offers their clients auction services to facilitate the sale of overstock, returned or salvaged items, we study the behavior of these secondary market auctions. We empirically study the bidding behavior in these auctions and characterize how a buyers purchase decision and his willingness to pay is driven by certain bundles characteristics.
2 - Product Reuse in Innovative Industries Tamer Boyaci, Associate Professor, McGill University, 1001 Sherbrooke St West, Montreal, QC, Canada, tamer.boyaci@mcgill.ca, Michael Galbreth, Vedat Verter
We consider a firm producing a modular product in an industry that experiences technological innovation over time. Innovation affects consumer valuations and firm costs to keep up with advances over time. Investing in reusability allows the firm to acquire used items and reuse in future production. Used products can be remanufactured and/or upgraded to include the innovations that has occurred since the item was originally produced. We examine both profit and environmental impact.
3 - Sourcing through Intermediaries Karan Girotra, INSEAD, Boulevard De Constance, Fontainebleau, 77300, France, karan@girotra.com, Elena Belavina
Inspired by the rise of sourcing intermediaries like Li and Fung Ltd., we examine the advantages and disadvantages of sourcing through intermediaries. Our analysis illustrates that sourcing through an intermediary reduces the supplierside incentives for self-interested, inefficient behavior by limiting the immediate gains from such behavior and by providing more long-term sourcing business in its absence.
3 - How Cooperative Can Firms be in Green Production? Fang Tian, Ph.D. Student, University of Southern California, Bridge Hall B6, USC University Park Campus, Los Angeles, CA, 90089, United States of America, tianfang@usc.edu, Laurens Debo, Greys Sosic
Some large manufacturers have established their own recycling channels, while others choose to use common recycling channels. This paper studies the farsighted stable structure for manufacturers to form coalitions when they employ a third-party recycling facility. There are two main findings drawn from our study: the degree of substitute determines the stable structure; cooperation at the end-of-life stage influences the degree of competition among manufacturers in the Oligopoly market.
4 - Managing Risk of Supply Disruptions: Incentives for Capacity Restoration Xinxin Hu, Assist Professor, Indiana University, 1309 E 10th Street, Kelley School of Business, Bloomington, IN, 47405, United States of America, hux@indiana.edu, Ling Wang, Haresh Gurnani
We compare two different strategies, Restoration Incentive strategy and Supplier Diversification strategy, taken by the retailers in response of the suppliers possible investment on capacity restoration in the case of disruption.
5 - Sourcing for Quality: Pricing, Inspection, and Cooperation Cuihong Li, University of Connecticut, 2100 Hillside Road, Unit 1041, Storrs, CT, 06269, United States of America, Cuihong.Li@business.uconn.edu, Hsiao-Hui Lee
A buyer may use different instruments to manage the quality of a sourced product: She can provide price incentive for the supplier to exert quality improvement effort, use inspection to screen out nonconforming products, or spend her own resource on cooperating with the supplier to improve the product quality. We investigate the use of the three instruments, considering both complementary and substitutable relationships between the buyers cooperation effort and suppliers improvement effort.
4 - Optimizing Seed Stock Quantities for Remanufacturable Automotive Replacement Parts Elif Akcali, Associate Professor, University of Florida, 303 Weil Hall, Gainesville, FL, 32611, United States of America, akcali@ise.ufl.edu, Ibrahim Karakayali, Sila Cetinkaya
Determining the optimal seed stock for remanufacturable automotive replacement parts is an important problem encountered in the context of service part planning in the automotive industry. To address this problem, we develop stochastic dynamic models to characterize the optimal seed stock. We begin our analysis by considering a single part in a single-period setting and extend our work to consider multiple parts n a multi-period setting.
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INFORMS Charlotte 2011 WC03

C - Room 202A
WC06
Inventory Management II
Contributed Session
Chair: Alireza Kabirian, California State University-Northridge, College of Engineering, Northridge, CA, United States of America, a_kabirian@yahoo.com 1 - Influence of the Suppliers Capacity and Warehouse Capacity for Western and Asian Companies Kai Luo, PhD Candidate, HEC Paris, 1, rue de la Libration, 78351 Jouy en Josas, Paris, France, kai.luo@mailhec.net, Laoucine Kerbache, Ramesh Bollapragada
We build models to study both Western and Asian companies having one product produced locally and the other produced far away. These models share a common basic model: a three-period, two-stage, two-product, two capacitated suppliers, single capacitated retailer model. The problems of the Western and Asian companies are formulated as a three-period problem and a multi-period problem respectively. Optimal and heuristic solutions are discussed and managerial insights are provided.
horizon returns is included in the mean-variance portfolio selection decision adding a time dimension to portfolio theory. DPT is effective in identifying size constrained optimal portfolios. Lower risk optimal portfolios have fewer feasible size possibilities.
3 - Algebraic Methods for the Stochastic Shortest Path Problem Douglas Shier, Math Sciences, Clemson University, Clemson, SC, 29634, United States of America, shierd@clemson.edu, Katherine Hastings
We consider stochastic networks in which arc lengths follow discrete probability distributions. Using an algebraic formulation, we analyze algorithms for determining exactly or approximately the distribution of the shortest path length between two specified nodes. This algebraic viewpoint unifies known algorithms and also provides a mechanism for establishing majorization results between these approximations and the exact distribution. Bounds on the expected path length are also derived.
4 - Time-dependent Reliable Shortest Path Problem Xing Wu, Northwestern University, 2145 Sheridan Rd, RM A316, Evanston, IL, 60201, United States of America, xingw@northwestern.edu
Reliable shortest paths are those requiring the least time to ensure a desired ontime arrival probability in a stochastic network. Link travel time distributions depend on the entry time. We give a dynamic programming formulation and a label-correcting algorithm. An approximation method using second-order stochastic dominance and a Fourier transform based convolution scheme are proposed. Numerical experiments are conducted to explore the right balance between efficiency and accuracy.
2 - A Model for Delivery Mode Splitting in a Two-Stage Supply Chain Cinthia Perez, PhD Student, University of Florida, 450 Weil Hall, Gainesville, FL, 32611, United States of America, ccperez@ufl.edu, Joseph Geunes
Although splitting shipments across multiple delivery modes typically increases total shipping costs, it may offer certain benefits that can more than offset these costs. These benefits include a reduction in lead time variance and a corresponding reduction in the probability of stockouts at the downstream stage. We consider a two-stage supply chain inventory model that permits characterizing and quantifying the critical tradeoffs and potential benefits associated with delivery mode splitting.
5 - Design Power Supply Scheme in Power Distribution Network with Network Flow Model Xinjie Lv, IBM Research, Building 19A, Zhongguancun Software Park, Haidian District, Bejing, 100193, China, lvxinjie@cn.ibm.com, Feng Gao, Jinyan Shao, Tianzhi Zhao, Hairong Lv, Jin Dong
Power supply scheme is a very important task to keep power network operation safe and reliable. As there are huge electrical equipment and complex network topology in distribution network, designing a suitable power supply scheme is difficult. With network flow model, automatic power supply scheme design is implemented based on distribution network analysis, operational data analysis and many constraints.
3 - Applying Delivery Window Optimization for Inventory Models Maxim Bushuev, Kent State University, Business Administration Building, A419, Kent State University, Kent, OH, 44242, United States of America, mbushuev@kent.edu
Delivery window optimization approach id used to solve stochastic inventory problems. The model includes stockouts and overloads (when inventory level exceeds a certain amount). The optimal solution includes the optimal order quantity and the reorder point which minimize the total expected cost.
4 - Economic Lot-Size Scheduling: An ERP View Alireza Kabirian, California State University-Northridge, College of Engineering, Northridge, CA, United States of America, a_kabirian@yahoo.com
We develop and solve a mathematical programming model for the pricing and production planning of multiple items on a single machine. The demand of each product depends on the prices of all products. Multiple resources are shared for the production of these items. The acquisition cost of each resource depends on the quantity acquired. The model aims at maximizing net profit as a function of sales revenue and costs of holding the items in stock, machine setup, and resources acquisition.
WC06
C - Room 203B
Classic Scheduling II
Contributed Session
Chair: Ali Allahverdi, Kuwait University, Department of IMSE, P.O. Box 5969, Safat, 13060, Kuwait, ali.allahverdi@ku.edu.kw 1 - Tight Lower Bound for a Class of Two-Machine Flow Shop Problems Mohamed Haouari, Prof, INSAT Tunis, INSAT Centre Urbain Nord BP 676 - 1080, Tunis, Tunisia, mh6368@yahoo.com, Mohamed Kharbeche
We present an assignment-based lower bound that is valid for a wide class of two-machine flow shop problems with a regular additive performance criterion. Also, we propose valid inequalities that aim at tightening the linear programming relaxation of two important special cases. Finally, we provide empirical evidence that these new bound consistently outperform state-of-the-art lower bounds.
WC04
C - Room 202B
Robust and Stochastic Network Optimization

Contributed Session
Chair: Hairong Lv, IBM Research, Building 19A, Zhongguancun Software Park, Haidian District, Bejing, China, lvhr@cn.ibm.com 1 - Robust Network Design Problems Long Zhao, Doctoral Student, University of South Florida, Department of Industrial and Management Syste, Tampa, FL, United States of America, longzhao@mail.usf.edu, Bo Zeng
We consider robust network flow problems and propose a new class of two-stage robust optimization. For different uncertain sets we propose different solution strategies, including linear reformulation and a general branch and bound algorithm. Numerical experiments are conducted to show or compare efficiency of different algorithms.
2 - Total Tardiness for the Two Stage Assembly Flowshop Scheduling Problem Ali Allahverdi, Kuwait University, Department of IMSE, P.O. Box 5969, Safat, 13060, Kuwait, ali.allahverdi@ku.edu.kw, Harun Aydilek
The two stage assembly flowshop scheduling problem with the objective of minimizing total tardiness is addressed. We propose an insertion based algorithm, a genetic algorithm, and a combination of both. Computational experiments reveal that the combination of both insertion and genetic algorithms performs as the best.
2 - Portfolio Size and 0-1 Variables in Stochastic Portfolio Networks Using Digital Portfolio Theory Ken Jones, PortfolioNetworks.com, 4300 NW 23rd Avenue Ste 125, Gainesville, FL 32606, United States of America, kenjones@portfolionetworks.com
We use zero-one variables to control portfolio size in stochastic portfolio networks. Digital Portfolio Theory represents return processes as digital signals and uses power spectral density to describe risk. The variance of long and short
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WC07 WC07
C - Room 204

3 - The Solver GCG - An Easy Way to Use Branch-and-Price Gerald Gamrath, PhD Student, Zuse Institute Berlin, Takustrasse 7, Berlin, 14195, Germany, gamrath@zib.de, Marco E. Lbbecke
We present GCG, a generic branch-and-price solver that builds on the noncommercial constraint integer programming framework SCIP. While problem specific implementations of branch-and-price are widely used, only few general puropose software is available in this area. After a short introduction to the Dantzig-Wolfe decomposition, we discuss the design of GCG and present results for three classes of combinatorial optimization problems.
Simulation and Optimization

Contributed Session
Chair: Ozan Kocadagli, Research Assistant, MSGSU/TUBITAK, Ciragan Cad. Cigdem Sok. No.1 MSGSU, Fen-Edebiyat Fakltesi Istatistik Blm, Istanbul, 34347, Turkey, ozankocadagli@msgsu.edu.tr 1 - Paint Bank Sequence Optimization on Assembly in an Automotive Manufacturing Plant Ahad Ali, Assistant Professor, Lawrence Technological Univeristy, 21000 West Ten Mile Road, Southfield, MI, 48188, United States of America, aali@ltu.edu
Automotive assembly plants have many different available options to release the order from the paint shop to assembly. The paint bank sequence impacts on assembly shop. This study develops a sequencing algorithm for the paint-toassembly bank. It addresses the impact of changes to the product mix as well as to the vehicle options through performance analysis on the final assembly schedule based on paint shop disruption. The results provide improvement in production as well as less interruption.
4 - A Mathematical Programming Approach to Political Redistricting with Compactness and Contiguity Hayri Onal, Professor, Department of Agricultural and Consumer Economics, Univ of Illinois at Urbana-Champaign, Urbana, United States of America, h-onal@illinois.edu, Kevin Patrick
We present a linear integer programming approach to partition indivisible spatial units and configure a specified number of political districts around selected centers so districts have almost equal populations; are contiguous and compact; and consider minority representation when possible. We present empirical applications to legislative districting cases for Illinois. Results show that the model-generated districts are more compact than the actual plan while improving minority representation.
2 - Hierarchical Full Bayesian Learning for Neural Networks Ozan Kocadagli, Research Assistant, MSGSU/TUBITAK, iragan Cad. igdem Sok. No.1 MSGSU, Fen-Edebiyat Fakltesi Istatistik Blm, Istanbul, 34347, Turkey, ozankocadagli@msgsu.edu.tr
LATE CANCELLATION
The aim of this study is to estimate parameters and hyperparameters in the Neural Networks by the hierarchical full Bayesian approach. For this learning process, a novel Markov chain Monte Carlo (MCMC) method is proposed. This method maximizes the joint posterior distribution of the network parameters and hyperparameters.
5 - A New Optimization Framework for Solving Mixed Integer Programming Problems Tao Wu, Research Engineer, Meda Engineering, 31439 Mound Road, Apt. H, Warren, MI, 48092, United States of America, danielwu9999@gmail.com, Leyuan Shi
We develop a new approach, where nested partitions (a heuristic) is combined with exact methods for solving mixed integer programming problems. The merit of the approach is that a strong bound generated by exact methods can provide a good guideline on partitioning and sampling in nested partitions ensuring an efficient solution process.
3 - Bayesian Model for Spatial Count Data with Excess Zero: US Natural Fluoride Concentration Estimation Seonghye Jeon, PhD Candidate, Georgia Institute of Technology, 600 Garson Dr. NE, Apt 9304, Atlanta, GA, 30324, United States of America, sjeon8@mail.gatech.edu
Water fluoridation is listed as one of the ten greatest public health achievements of the 20th century. However, fluoride can occur naturally in water well above recommended levels, which can have several long-term adverse effects. Therefore, assessing the county level natural fluoride concentration and providing water fluoridation guideline based on the assessment plays an important role in public oral health community.
WC09
C - Room 206A
Demand Learning and Model Uncertainty in Revenue Management

Chair: Denis Roland Saure, University of Pittsburgh, Pitssburgh, PA, 15261, United States of America, dsaure@pitt.edu 1 - Optimal Stopping with Bayesian Learning in Revenue Optimization Huseyin Topaloglu, Cornell University, 223 Rhodes Hall, Ithaca, NY, United States of America, ht88@cornell.edu, Chao Ding, Paat Rusmevichientong
We consider a multi-dimensional Bayesian learning model that learns failure rates of a product from sale data, and decides if and when it is optimal to stop selling the product. We establish structural results for the optimal policy and develop bounds on the value function. Numerical results indicate that our approximations perform well.
WC08
C - Room 205
Integer Optimization
Contributed Session
Chair: Tao Wu, Research Engineer, Meda Engineering, 31439 Mound Road, Apt. H, Warren, MI, 48092, United States of America, danielwu9999@gmail.com 1 - Duality Gap Reduction and Optimality Condition for Binary Quadratic Programming Baiyi Wu, PhD Student, The Chinese University of Hong Kong, L204, Kuo Mou Hall, Sha Tin, Hong Kong - PRC, baiyiwu@gmail.com, Duan Li
For binary quadratic programming (BQP), the Lagrangian function with its multiplier vector set at the optimal dual value from SDP relaxation gives the best convex quadratic function, fstar(x), to bound all feasible points above its epigraph. By cell enumeration, we find the closest point from the integer set to minimum solution space of fstar(x). By identifying the 2nd, 3rd closest and so on, we further generate a sequence of improved bounds and derive an optimality condition for termination.
2 - Dynamic Pricing and Advance Selling under Demand Learning Rene Caldentey, New York University, New York, NY, United States of America, rcaldent@stern.nyu.edu, Victor Araman
We consider the problem faced by a retailer that is planning to introduce a new product into the marketplace under incomplete demand information. To improve his demand forecast and inventory decisions, the retailer decides to open an advance selling channel that allows buyers to place orders (at a reduced price) before the product is launched. The seller uses this advance demand information to adjust inventory and pricing decisions.
2 - Computing an Integer Point in a Polytope is in the Class PPAD When Such a Point Exists Chuangyin Dang, City University of Hong Kong, Deparment of MEEM, CityU of HK, HK, Hong Kong, Hong Kong - PRC, mecdang@cityu.edu.hk, Yinyu Ye
Let P be a polytope satisfying that each row of the defining matrix has at most one positive entry. Given that P contains an integer point, by introducing an integer labeling rule in an augmented set and applying a triangulation of the Euclidean space, we show that computing an integer point in P is in the class PPAD. Furthermore, based on the labeling rule and the augmented set, a simplicial method is developed to determine whether there is an integer point in P.
3 - Consumer Rebates for Solar Technology Adoption Georgia Perakis, Massachusetts Institute of Technology, Cambridge, MA, United States of America, georgiap@mit.edu, Maxime Cohen, Ruben Lobel
We study the problem of designing consumer subsidies for adopting solar technology from both the government and industry side. We introduce and study a model where the government sets subsidies to achieve an adoption target level while minimizing its cost, whereas industry optimizes its profit. We consider both deterministic and stochastic demands as well as the version combined with pricing.
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4 - Optimal Learning in Sequential Combinatorial Optimization Denis Roland Saure, University of Pittsburgh, Pitssburgh, PA, 15261, United States of America, dsaure@pitt.edu, Juan Pablo Vielma, Sajad Modaresi
We study the problem of a firm that maximizes periodic revenues by solving a sequence of combinatorial formulations with stochastic demands. With no prior information on demand distributions, the firm faces an exploration-exploitation dilemma with a combinatorial number of actions on each period. We develop a family of dynamic policies that judiciously balance the implied tradeoff, and prove their performance cannot be improved upon in a precise mathematical sense.
WC12
WC11
C - Room 207A
Advances in Learning and Dynamic Optimization

Chair: Ciamac Moallemi, Assistant Professor, Columbia Business School, 3022 Broadway, Uris 416, New York, NY, 10027, United States of America, ciamac@gsb.columbia.edu Co-Chair: Vivek Farias, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, vivekf@mit.edu 1 - Basis Function Selection in ADP: Bellman Error Minimization Michael Veatch, Gordon College, 255 Grapevine Rd, Wenham, MA, 01984, United States of America, Mike.Veatch@gordon.edu
After approximating the value function in approximate dynamic programming, we address how to improve the approximation by adding basis functions. Least square Bellman error methods are applied to assess large numbers of candidate functions. The method is applied to queueing networks.
WC10
C - Room 206B
Topics in Finance
Contributed Session
Chair: Nicolas Merener, Universidad Torcuato Di Tella, 1010 Saenz Valiente, Buenos Aires, Argentina, nmerener@utdt.edu 1 - Performance of the Markowitzs Portfolio Selection Model Depending on the Accuracy of the Input Data HongSeon Kim, Yonsei University, Yonsei-Ro, Seoul, Korea, Republic of, caasman@naver.com, Seongmoon Kim
This paper investigates performance of the Markowitzs portfolio selection model depending on the accuracy of the input data. According to our empirical research, the more accurate input data leads to the better performance. In detail, the return for the portfolio is significantly affected and the variance of the return for the portfolio is marginally affected by the accuracy of the input data.
2 - ADPs for Natural Gas Storage Valuation Based on Approximate Linear Programming Relaxations Selvaprabu Nadarajah, Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, snadarajah@cmu.edu, Nicola Secomandi, Francois Margot
Real option valuation of natural gas storage contracts gives rise to an intractable Markov Decision Process (MDP). We derive novel Approximate Dynamic Programs (ADPs) for this MDP from partitioned surrogate relaxations of an approximate linear program. We use our ADPs to estimate lower bounds and information relaxation upper bounds on the storage value. Our lower bounds essentially match the best known lower bounds. Our upper bounds either match or improve those available in the literature.
2 - Do Family CEOs Perform Better Than Outside CEOs in a Transition Economy? Di Cai, PhD Candidate, School of Management, Xian Jiaotong University, No.28, Xianning West Road, Xian, 710049, China, xjtucd@126.com, Difang Wan, Jin-hui Luo
Drawing on agency theory, stewardship theory and principal-principal perspective, this study examines whether family CEOs perform better than outside CEOs in a transition economy. Based on a sample of 351 Chinese family listed firms during 2004-2007, our results show that family CEO is positively associated with firm performance. Further analyses reveal that this positive association is significant only for firms with low separation of ownership and control or having multiple large shareholders.
3 - Dynamic Capacity Allocation to Customers Who Remember Past Service Adam Mersereau, University of North Carolina, Kenan-Flagler Business School, Chapel Hill, NC, United States of America, ajm@unc.edu, Dan Adelman
We study the problem faced by a supplier deciding how to dynamically allocate limited capacity among a portfolio of customers who remember the fill rates provided to them in the past. We approach the problem using approximate dynamic programming (ADP), to obtain a policy that trades off customer characteristics to rationalize the fill rates the firm should target for each customer.
3 - Option Valuation of the Value of Signaling to be a Socially Responsible Corporation naoya takezawa, professor, Nanzan University, 18 Yamazato-cho, Showa-ku, Nagoya-shi, Aichi-ken, Nagoya, 466-8673, Japan, ntakezaw@nanzan-u.ac.jp
This paper attempts to evaluate the premium on firms that act socially responsible from the perspective of the financial market. These firms are considered to be sustainable in the sense that they invest and operate in a socially responsible manner. The return distribution of a portfolio of socially responsible firms is evaluated utilizing an option evaluation technique.
4 - Pathwise Optimization for Linear Convex Systems Ciamac Moallemi, Assistant Professor, Columbia Business School, 3022 Broadway, Uris 416, New York, NY, 10027, United States of America, ciamac@gsb.columbia.edu, Vivek Farias, Vijay Desai
We describe the pathwise optimization method, an approach for obtaining lower bounds on the minimal cost of a general class of linear-convex control problems. Our method delivers tight bounds by tractably identifying an optimal information relaxation penalty function. We demonstrate our method on a high-dimensional financial application. We provide theory to show that the bounds generated by our method are provably tighter those of some other commonly used approaches.
4 - Post Performance of IPO Stocks: A Study in Indian Context Venkata Vijay K Pasupuleti, Doctoral Student, Indian Insitute of Management Indore, Rau, Pigdamber, IIM Indore campus, E 116, Indore, 453331, India, f07venkatav@iimidr.ac.in, Vijay Kumar Gupta
Study impact of liquidity, underpricing and ownership up on short term and long term performance of the IPOs in Indian market. Underpriced IPOs had higher dependence on underpricing provided for long term and short term performance, whereas overpriced IPO stocks depends on long term liquidity characteristic for long term performance.
WC12
C - Room 207BC
Stochastic Optimization in Energy

Contributed Session
Chair: Ebisa Wollega, Student, University of Oklahoma, 207 Wadsack Dr. Apt F, Norman, OK, 73072, United States of America, ebisa@ou.edu 1 - Adaptive Sampling in Stochastic Programming and its Application to Economic Dispatch for Power Systems Berk Ustun, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, ustunb@mit.edu, Panos Parpas, Mort Webster
We discuss the application of Markov Chain Monte Carlo methods as a variance reduction technique in Stochastic Dual Dynamic Programming. We introduce an open source implementation of our algorithm and compare it to existing variance reduction methods in Stochastic Programming. We illustrate how to use the algorithm to solve a economic dispatch problem for power systems, which accounts for the uncertainties in the demand and availability of intermittent resources.
5 - Distributed Production and the Rise of Emerging Markets in CME Soybean Futures Prices Nicolas Merener, Universidad Torcuato Di Tella, 1010 Saenz Valiente, Buenos Aires, Argentina, nmerener@utdt.edu
Motivated by the growing weight of emerging economies we study the effect of distributed production in Chicago Mercantile Exchange prices. We empirically estimate the sensitivity of CME soybean futures prices to local rain precipitation in Argentina and the US Midwest. We find that the aggregation of local information into CME prices reflects a globally integrated market for soybeans, and that sensitivities to local rain have correlated over time with varying shares of global production.
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3 - The Dynamic and Stochastic Knapsack Problem with Postponement Options Tianke Feng, Mr., University of Florida, 323 University Village APT 8, Gainesville, FL, 32603, United States of America, fengtk@ufl.edu, Joseph Hartman
The Dynamic and Stochastic Knapsack Problem has wide applications in yield management and finance. Existing research focuses on cases where decisions must be made upon a requests arrival, while in many applications the decisionmaker can delay decisions and maintain a queue of requests. We analyze a variety of polices for this problem and identify optimal threshold policies in a special case. We illustrate the benefit of delay through applications in yield management and capital budgeting.
2 - Multistage Energy Planning Risk Neutral and Risk Averse Approaches Wajdi Tekaya, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, United States of America, wtekaya@gatech.edu, Murilo Pereira Soares, Alexander Shapiro, Joari Paulo da Costa
Stochastic Dual Dynamic Programming algorithm is a popular approach to tackle large scale linear multistage stochastic problems like the one considered in multistage energy planning problems. In the risk neutral approach, the objective is to minimize the expected value of the total cost along the planning period, subject to feasibility constraints. In this talk we consider the adaptive and regular risk averse approaches and show their contributions compared to the risk neutral method.
3 - Entry Decisions of Energy Portfolio Investment under Tradable Carbon Dioxide Permit Jianjun Deng, Research Assistant, Missouri University of Science and Technology, 600 W. 14th St., 223 Engineering Management Building, Rolla, MO, 65401, United States of America, jddxc@mst.edu, Zhen Liu
Tradable carbon dioxide permit is an important policy to control carbon dioxide emission. This paper studies optimal investment decisions to build renewable power plants for the generator based on the price fluctuation of tradable permit and electricity. We model this problem as stochastic control and optimal stopping problem with objective to maximize the expected long term profit. We conduct numerical experiments in the case study section.
4 - Modeling a Rental Car Pricing and Relocation Problem Robert Russell, Professor, Univ of Tulsa, Finance & Operations Management, 800 S Tucker Drive, Tulsa, OK, 74104, United States of America, rrussell@utulsa.edu, Tim Madden
A rolling horizon linear programming model is developed to provide decision support and to help to integrate the pricing and relocation decisions for one-way car rentals. Computational requirements, results, and implementation difficulties are reported for a regional test problem for a major car rental company.
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C - Room 208A
4 - Ensemble Based Uncertainty Analysis and its Application for Renewable Power Forecasting Meng Zhang, Staff Researcher, zmbj@cn.ibm.com, 19A Diamond Building, 8 West Dongbeiwang Road, Beijing, 100193, China, zmbj@cn.ibm.com
The ensemble Kalman filter is introduced to help on improving the forecast skills of renewable power forecasting, which includes both the wind and solar power generations, considering their daily outputs are highly dependent on the nonlinear and stochastic processes of various weathers. In this case study, the uncertainty of the renewable power forecasting, is modeled by a ensemble group, in which particular uncertain structures have been found during the evolution of the weathers.
Stochastic Optimization in Short-Term Power Generation II

Chair: Steffen Rebennack, Assistant Professor, Colorado School of Mines, Engineering Hall 310, Golden, CO, 80401, United States of America, srebenna@mines.edu 1 - A Two-stage Stochastic Economic Dispatch Model with Minimum Frequency Constraints Yen-Yu Lee, Ph.D. Candidate, University of Texas at Austin, 2 501 Speedway, Austin, TX, 78712, United States of America, yenyu@mail.utexas.edu, Ross Baldick
A new economic dispatch model is proposed as a two-stage stochastic linear program. This model optimizes the expected operation cost under various types of uncertainties. The post-contingency transmission constraints are considered to guide the locational allocations for reserves. In addition, minimum frequency constraints are enforced to incorporate the effects of under-frequency load shedding. Small- and medium-scale system examples are provided to demonstrate the value of the model.
5 - An Application of Experimental Design to a Multicriteria Optimization: A Case for Energy Forecasting Ebisa Wollega, Student, University of Oklahoma, 207 Wadsack Dr. Apt F, Norman, OK, 73072, United States of America, ebisa@ou.edu
The objective of this presentation is to demonstrate how experimental design can be used in a goal programming multi-criteria stochastic optimization. A case problem for U.S. energy forecasting is selected. A linear goal programming is developed. Then, the experimental design procedures are shown in the process of solving the problem.
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C - Room 207D
2 - Using Benders on a Stochastic Unit Commitment Model to Estimate Demand Response Cost Savings Jennifer Van Dinter, PhD Candidate, Colorado School of Mines, 816 15th Street, Golden, CO, 80401, United States of America, jvandinter@mines.edu
Electric utilities must dispatch their generators in order to meet uncertain customer demand and satisfy spinning reserve requirements. This reserve mandate forces utilities to operate generators below their efficient levels, increasing fuel consumption. We explore potential operating costs savings from the implementation of demand response, or load shedding, using a two-stage stochastic unit commitment model solved using Benders Decomposition.
Applied Topics in Revenue and Yield Management

Contributed Session
Chair: Robert Russell, Professor, Univ of Tulsa, Finance & Operations Management, 800 S Tucker Drive, Tulsa, OK, 74104, United States of America, rrussell@utulsa.edu 1 - Booking Limit Control by Offer Sets with Discrete Choice Model Yingjie Lan, Assistant Professor, Beijing University, Guanhua School of Management, Beijing, 100871, China, ylan@pku.edu.cn
We propose a practically convenient and near-optimal control structure for single leg revenue management with customer choice behavior. This kind of control structure mimics the popular booking limit policy with independent demand model. We analyze the structural properties of this new type of policy, and propose an approximate model to solve for such policies. Numerical experiments are conducted to illustrate the effectiveness of such kind of control policies.
3 - Should Electricity Surpluses be Stored or Destroyed? Yangfang Zhou, PhD Student, Tepper School of Business, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, yangfang@andrew.cmu.edu, Alan Scheller-Wolf, Nicola Secomandi, Stephen Smith
One logical way to deal with electricity surpluses is to store them in efficient facilities for future sale. Based on analytical and empirical analysis, we discover a different strategy: buying electricity when price is negative and disposing of it using inefficient storage. We support this finding by deriving the optimal policy structure of a storage facility trading in a market with stochastic price, and then numerically evaluating the value of storage using data from NYISO.
2 - Optimizing Vacation Exchange Dasong Cao, Sr. Analytics Research Scientist, Wyndham Exchange and Rental, 7 Sylvan Way, Parsippany, NJ, 07054, United States of America, dasong.cao@rci.com, Srinidhi Melkote, Arjun Madhavan, Preeti Modgil, Ryan Connelly, Sneha Thakkar
Vacation exchange business is generally to maximize exchanges while seeking fairness. RCI, a subsidiary of Wyndham Exchange and Rentals, is the global leader in vacation exchange. Through RCI Weeks Program, a member deposits a unit of inventory, it is assigned a value called Deposit Trading Power which can then be applied towards exchanging into another unit. Pricing is to set the right exchange Trading Power. We present optimal pricing strategy using Linear and Integer Programming models.
4 - Forward Information in Hydropower Scheduling Daniel Haugstvedt, Norwegian University of Science and Technology, Department of Industrial Econ and Techn Mgm, Alfred Getz v 3, Trondheim, NO-7491, Norway, daniel.haugstvedt@iot.ntnu.no
Reservoirs give hydro power producers the option to store water for release in periods were the expect price is higher. Its profitable to wait with production if the discounted forward price in a future period is higher than the spot price and its possible to store the water. Using hourly production data from 13 hydropower plants, we investigate how the forward curve is used to plan production.
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C - Room 208B
WC17
Decision Support Models and Sensitivity Analysis III

Chair: Lorenzo Peccati, Universit Bocconi, Department of Decision Sciences, Via Roentgen, Milano, 20139, Italy, lorenzo.peccati@uni-bocconi.it 1 - Transforming Quantitative Business Decisions Using Mathematicas MANIPULATE Function Nikolaos Adamou, The City University of New York / BMCC, Business Management, 130 Barrymore Blvd, Franklin Square, NY, 11010, United States of America, nikolaoskadamou@gmail.com
This paper will demonstrate that Mathematicas MANIPULATE function is a highly flexible tool in quantitative business decision-making. Non-linearity becomes as flexible as linearity. It can also extend sensitivity analysis from its traditional usage to cover the entire spectrum of coefficients that may change simultaneously.
3 - Implementation of Bienstock and Zuckerbergs Algorithm for the Open-pit Mine Scheduling Problem Gonzalo Muoz, Universidad de Chile, Blanco Encalada 2120, Santiago, Chile, gmunoz@dim.uchile.cl, Marcos Goycoolea, Maurice Queyranne, Eduardo Moreno, Daniel Espinoza
In this talk we present our implementation of Bienstock and Zuckerbergs algorithm for solving the open-pit mine scheduling problem. Well show different features used to get a better performance of the algorithm, such as pre-processing methods to shrink the problem, exploiting the structure of the graph that represents a multi-period mine to speed-up the algorithm, etc. Finally well show experiments over real instances, identifying which features make a difference on building a good algorithm.
4 - MineLib an Open Library of Test-instances for Open-pit Mining Daniel Espinoza, Assistant Professor, Universidad de Chile, 701 Republica, Santiago, Chile, daespino@dii.uchile.cl, Marcos Goycoolea, Eduardo Moreno, Alexandra Newman
OR-techniques have been proposed to tackle mining operations since the 60s, however, a common problem for researchers is the lack of real instances where to test proposed methodologies, and that can serve as a benchmark for all to use. In this talk we present the first such set, available on-line to all for research purposes, and present some results for two clasical mining problems: The ultimate pit design, the sequencing problem over time with resource constraints.
2 - Calculating Sensitivity Information While Optimizing Genetha Gray, Sandia National Laboratories, P.O. Box 969, MS 9159, Livermore, CA, 94551-0969, United States of America, gagray@sandia.gov
In its purest form, optimization produces a single best point and does not take uncertainty into account. Most current approaches to achieving both optimization and UQ take a serial approach. First, an optimal solution is identified. Then, a series of runs dedicated to UQ analysis are completed. In this work, we will discuss an approach which achieves both simultaneously by combining tools from numerical optimization and Bayesian statistics.
WC17
C - Room 209B
Techniques in Decision Analysis

Contributed Session
Chair: Victor Richmond Jose, Assistant Professor, Georgetown University, 37th and O Sts NW, Washington, DC, 20057, United States of America, vrj2@georgetown.edu 1 - Z-Theory: Nonlinear Risk Assessment in Decision Making Behnam Malakooti, Case Western Reserve University, 10900 Euclid Avenue, Cleveland, OH, United States of America, behnam.malakooti@case.edu
This paper introduces z-theory for assessing nonlinear risk and alternative ranking. Robustness and simplicity of z-utility for assessing nonlinear functions is discussed. It is also shown how z-theory overcomes disadvantages of classical expected utility theory in explaining nonlinear utility functions. Theoretical foundation of z-theory for decision problems under risk is presented and practical examples for different risk behaviors (risk prone, neutral and risk averse) are explained.
3 - Sensitivity Analysis for Reliability-based Decisions Kaycee Wilson, University of Oklahoma, 9800 Harmony Dr., Midwest City, OK, 73130, United States of America, jo245@aol.com, Kash Barker
Many large-scale systems in the U.S. and around the globe are aging past the useful life of their planned design. Efficient maintenance decision making is essential for extending the useful life of these systems. This research includes the incorporation of reliability-based decision making with consideration of uncertainty in parameter estimation in a multiobjective framework. This framework is extended to include system-level objectives through coordination of subsystem maintenance decisions.
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C - Room 209A
Applications in Open Pit Mining

Sponsor: Energy, Natural Resources and the Environment/ Mining Sponsored Session
Chair: W. Brian Lambert, PhD Candidate, Colorado School of Mines, 1500 Illinois St., Golden, CO, 80401, United States of America, wlambert@mines.edu 1 - Improving the Tractability of Open Pit Block Sequencing Models via Exact Techniques and Heuristics Alexandra Newman, Associate Professor, Colorado School of Mines, 1500 Illinois Street, Golden, CO, 80401, United States of America, anewman@mines.edu, Kevin Wood
Open pit block sequencing formulations lend themselves to stronger and more tractable formulations through techniques such as variable definition, variable elimination via preprocessing, and simple heuristics that identify initial solutions or even provide good quality final solutions. We present an overview of and justification for such techniques, provide numerical results, and discuss problem arenas other than precedence constrained knapsack models for which these techniques are relevant.
2 - Optimal Insurance Demand under Reference Dependent Risk Attitude Babak Zafari, George Washington University, 2815 9th Street S., Apt 81A, Arlington, VA, 22204, United States of America, zafari.babak@gmail.com
Models of insurance demand based on expected utility and dual theory have been vastly studied. This article examines the robustness of their classical results by using mean-risk model obtained from Disappointment Without Prior Expectation. The results show a more realistic pattern of risk taking behavior compared to other models.
3 - Risk: A Regret Perspective Chin Hon Tan, University of Florida, Industrial and Systems Engineering, Gainesville, FL, 32611, United States of America, chinhon@ufl.edu, Joseph Hartman
Conventional risk measures that are based on reward alone are inadequate in addressing the risk preferences of individuals. Research in psychology suggests that risk preferences are influenced by feelings of regret. However, research on regret as a risk measure has largely been restricted to just two notions of regret: absolute regret and relative regret. We introduce a general framework for modeling regret and obtain stochastic dominance results for regret-theoretic and mean-risk models.
2 - Heuristics to Expedite the Solution Time of the Open Pit Block Sequencing Problem W. Brian Lambert, PhD Candidate, Colorado School of Mines, 1500 Illinois St., Golden, CO, 80401, United States of America, wlambert@mines.edu, Alexandra Newman
An open pit mine optimizes profits by maximizing the extracted orebodys net present value. Solving an integer program (IP) with time-indexed binary variables for each block representing if, and when, the block is extracted, is an exact method to determine the block extraction sequence. We present heuristics to identify an initial integer feasible solution and an algorithm to enable further variable reductions, and show that both of these expedite the IP solution time.
4 - Sequential Search with Ordinal Ranks and Cardinal Values: Theory and Experimental Evidence Asa Palley, Duke University, The Fuqua School of Business, 100 Fuqua Drive, Box 90120, Durham, NC, 27708, United States of America, asa.palley@duke.edu
We consider a sequential search problem where the DM observes only the relative ranks of up to N options, whose true values are i.i.d. random variables, and seeks to maximize the expected discounted value of the option that she selects. We show that the optimal policy converges as we relax the applicant limit and compare the results to a closely related full information problem. Experimental results suggest that subjects tend to stop too soon and obtain significantly lower payoffs than optimal.
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2 - Hybrid Neural Network Model in Forecasting Retail Sales Elizabeth Haran, Professor, Salem State University, 352 Lafayette Street, Salem, MA, 01970, United States of America, elizabeth.haran@salemstate.edu, Youqin Pan, Zaiyong Tang
This paper tries to demonstrate the feasibility and potential of applying empirical mode decomposition (EMD) in forecasting retail sales during recessions. The hybrid forecasting method integrating EMD and Neural Network was employed to predict retail sales .Findings indicate that EMD-Neural Network can significantly improve forecasting performance.
5 - Scoring Deterministic Forecasts in Decision Analysis Using Scale-Free Measures Victor Richmond Jose, Assistant Professor, Georgetown University, 37th and O Sts. NW, Washington, DC, 20057, United States of America, vrj2@georgetown.edu
The field of decision analysis relies heavily on the use of forecasts in many of its applications. Though elicitation and evaluation of deterministic forecasts have been studied extensively, we present some new and interesting results related to scale-free measures such as MAPE, sMAPE, and relative error. Some properties of these functions and their implications are discussed.
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C - Room 210A
3 - Estimating Real Money Balances for U.K: A Simultaneous Equation Approach Abul Jamal, Professor, Southeastern Louisiana University, College of Business, Hammond, LA, 70402, United States of America, ajamal@selu.edu, Yu Hsing
Equilibrium real balances and interest rates have been the subject of extensive research. Most studies presume the supply of money to be fixed by the central bank and that the interest rate is solely determined by the demand for money. In this paper we specify both the demand for and supply of money in the U.K. is estimating the real money balances.
Topics in Production and Scheduling

Contributed Session
Chair: Yasaman Mehravaran, PhD Candidate, Oergon State University, School of Mech, Indust, and Mfgr Engr., 204 Rogers Hall, Corvallis, OR, 97331-6001, United States of America, mehravay@onid.orst.edu 1 - An Efficient k-step Lookahead Search Algorithm for Scheduling Parallel Mode Cluster Tools Jin Young Choi, Associate Professor, Ajou University, San 5, Woncheon-dong, Yeongtong-gu, Suwon, Korea, Republic of, choijy@ajou.ac.kr, Hwang Ho Kim
We present an efficient k-step lookahead algorithm for scheduling parallel mode cluster tools that can process multiple types of lots at the same time. It consists of two main steps for selecting a prominent candidate node with (i) shorter cycle time and (ii) less possibility of deadlock. It is examined for its performance by generating some example configuration of cluster tools.
4 - The Equity Pledge of Controlling Shareholder of Companies Listed on Chinas GEM Jie Xiong, School of Management, Xian Jiaotong University, School of Management Box 2230, No.28 Xianning West Road, Shaanxi, Xian, China, xjstca@163.com, Dong Qian, Jue Guo
This study investigated the effects of the controlling shareholders behavior of equity pledge on the value of company listed on GEM and behavioral choices of the controlling shareholder based on the real option theory. Monte Carlo simulation analysis results indicated the relationship between pledge discount rate and equity pledge ratio of controlling shareholder, the risk level to select and the value of companies listed on GEM.
2 - Optimizing Dynamic Inventory Replenishment and Substitution for Two Products with Positive Leadtimes Jianjun Xu, Zaragoza Logistics Center, Edificio Nayade - Portal, Calle Bari 55 - Plaza, Zaragoza, 50197, Spain, jxu@zlc.edu.es, Shaohui Zheng, Youyi Feng, David D. Yao
We carry out a structural analysis for a family of two products to be replenished and supplied to a market with demand uncertainty. The ordering times are not negligible and not the same for the products. A high-end product can substitute for the low-end product. We discover the structural properties of optimal policies for dynamic replenishment and substitution of inventory management.
5 - Significant Concentration Paul Kattuman, University of Cambridge, Judge Business School, Trumpington Street, Cambridge, CB4 2BE, United Kingdom, p.kattuman@jbs.cam.ac.uk
The 80 : 20 rule speaks to the ubiquity of dominance. In empirical work, the concentration ratio is used to summarise the extent to which a market is dominated. Four growth models map to the same probability distribution for the concentration ratio. Based on this, we analyse dominance in competitive systems with positive feedback. Using an urn model and probabilistic lock-in, we find the trade-off between initial asymmetry in market shares and feedback strength for market dominance.
3 - Dual Resource Scheduling with Distinct Setup and Run Labor Yasaman Mehravaran, PhD Candidate, Oergon State University, School of Mech, Indust, and Mfgr Engr., 204 Rogers Hall, Corvallis, OR, 97331-6001, United States of America, mehravay@onid.orst.edu, R. Logen Logendran
We propose a metaheuristic algorithm to solve an unrelated-parallel machine scheduling problem in which both machines and labor are constrained. The goal is to minimize the work-in-process inventory while maximizing the service level. Different skill levels are considered for labor and the skill required for performing a jobs setup is different from its run. The setup is considered to be sequencedependent and job releases are dynamic.
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C - Room 211A
Global Optimization - Applications

Sponsor: Optimization/Global Optimization Sponsored Session
Chair: Syed Mujahid, University of Florida, 303 Weil Hall, Gainesville, United States of America, smujahid@ufl.edu 1 - Beam Angle Selection in Radiation Treatment Planning A Challenging Global Optimization Problem Robert Meyer, University of Wisconsin-Madison, Madison, United States of America, rrm@cs.wisc.edu, Siyang Gao, Weiwei Chen, Leyuan Shi, Warren DSouza, Hao Howard Zhang
An important element of radiation treatment planning for cancer therapy is the selection for a given patient of a set of 5-9 incident radiation beam angles. Machine learning tools are used in conjunction with a Nested Partitions framework for this global optimization problem.
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C - Room 210B
Empirical Analysis in Economics

Contributed Session
Chair: Paul Kattuman, University of Cambridge, Judge Business School, Trumpington Street, Cambridge, CB4 2BE, United Kingdom, p.kattuman@jbs.cam.ac.uk 1 - An Empirical Analysis of Data Breach Litigation Sasha Romanosky, Carnegie Mellon University, 5000 Forbes Ave, Pittsburgh, PA, 15213, United States of America, sromanos@andrew.cmu.edu, Alessandro Acquisti, David Hoffman
Data breach disclosure laws have prompted a flurry of lawsuits by victims of identity theft. Using data collected from Westlaw and PACER, empirically analysis federal data breach lawsuits from 2000-2010. Docket analysis is a method of empirical legal research using legal complaints and judicial rulings. We use discrete choice regression models to estimate the probability that a data breach will result in a lawsuit and the probability that, once filed, the plaintiff will achieve a settlement.
2 - A Global Optimization Technique for Spectral Peak Deconvolution of Polyhydroxy Fullerenes Vijay Pappu, University of Florida, Gainesville, FL, United States of America, psnvijay@ufl.edu, Panos Pardalos
Recently, Polyhydroxy Fullerenes (PHFs) have been effective in non-invasive Cancer imaging and treatment. As PHFs find applications for commercial use, accurate characterization of the same becomes critical. In this talk, we present peak deconvolution techniques applied to FTIR spectra of PHFs to accurately characterize them. A constrained nonlinear least-squares formulation is presented for this problem and solved to global optimality using penalty methods.
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3 - Linear Matrix Factorization: An MIP Based Approach Syed Mujahid, University of Florida, 303 Weil Hall, Gainesville, United States of America, smujahid@ufl.edu, Panos Pardalos, Pando Georgiev
Data representation is one of the important and interesting topics in the field of data analysis. The most common approach to represent data is decomposing the data into a linear matrix form. In this talk, we will present a mixed integer programming (MIP) approach for some of the special cases of data representation problem. Moreover, we will discuss the advantages and disadvantages of using MIP accproach over the traditional approaches in finding the global optimal representation.
WC23
2 - Nonparametric Estimation of Shape Constrained Functions: A Constrained Optimization Approach Jinglai Shen, Assistant Professor, Department of Math and Statistics, University of Maryland Baltimore County, 1000 Hilltop Circle, Baltimore, MD, 21250, United States of America, shenj@umbc.edu
This talk addresses spline estimation of shape constrained functions in statistics and engineering. Two spline estimators are discussed: penalized splines (ie Psplines) and smoothing splines. The P-splines yield size dependent complementarity conditions; a critical uniform Lipschitz property is established. The latter estimator is formulated as a constrained optimal control problem that leads to a complementarity system. A nonsmooth Newton method is used for numerical resolution.
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C - Room 211B
Modeling and Optimization of Risk

Chair: Michael Zabarankin, Associate professor, Stevens Institute of Technology, Castle Point on the Hudson, Hoboken, NJ, 07030, United States of America, mzabaran@stevens.edu 1 - A Risk-based Linear Separation Model Yana Morenko, Department of Mechanical and Industrial Engineering, University of Iowa, 3131 Seamans Center, Iowa City, IA, 52242, United States of America, yana-morenko@uiowa.edu, Pavlo Krokhmal
We propose a linear separation model that minimizes the risk of misclassification and reduces to LP problem with p-order conic constraints, and generalizes the model of Bennett and Mangasarian (1992). The proposed solution approach is based on reformulation of p-cones as second order cones when p is rational. An algorithm for minimal SOCP representations of rational order p-cones is given. A case study on several popular data sets illustrating the developed model is conducted.
3 - Generalized Nash Equilibria in Decentralized Network Interdiction Games Andrew Liu, Assistant Professor, Purdue University, School of Industrial Engineering, 315 N. Grant Street, West Lafayette, IN, 47907, United States of America, andrewliu@purdue.edu, Nelson Uhan
In a decentralized network interdiction game, agents seek to reduce the capabilities of adversaries in a shared network. Due to a lack of coordination and potentially conflicting objectives, the system-wide outcome of equilibria may be suboptimal compared to that of centralized actions. This motivates studying the price of anarchy (PoA) with respect to generalized Nash equilibria (GNE) in these games. We will discuss properties of the GNE and PoA in decentralized network interdiction games.
4 - Equilibrium Dynamic Traffic Assignment with Departure Time Choice Using Cell Transmission Model Kien Doan, Graduate Student, Purdue University, 550 Stadium Mall, West Lafayette, IN, 47907, United States of America, kdoan@purdue.edu, Lanshan Han, Satish Ukkusuri
In this study, we focus on solving the simultaneous route and departure time choice problem in general networks with multiple O-D pairs by embedding the cell transmission model to formulate the traffic propagation . Complementarity theory is applied to analyze the solution existence and other properties of the formulations. Extensive computational experiments are conducted to demonstrate the benefits of the proposed formulations on various test networks.
2 - Optimal Sensor Placement: Theory and Application Anton Molyboha, scientist, Chicago, United States of America, anton.molyboha@gmail.com
A framework of optimal sensor placement for threat detection is presented. It includes a range of statistical models and optimization approaches tailored to specific threat detection applications.
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C - Room 212B
3 - Risk Averse Decision Making under Catastrophic Risk Bogdan Grechuk, Professor, University of Leicester, United Kingdom, bg83@leicester.ac.uk
An axiomatic framework for risk averse decision making under catastrophic risk is presented. It embraces the safety first principle inconsistent with the classical expected utility theory.
New OR Techniques for Homeland Security

Contributed Session
Chair: Samrat Chatterjee, University of Southern California, 3710 McClintock Avenue, RTH 322, Los Angeles, CA, 90089-2902, United States of America, samrat.chatterjee@usc.edu 1 - Determining the Optimal Number of Robots in a Single Operator Multi-Robot Environment R. Darin Ellis, Associate Professor, Wayne State University, 5050 Anthony Wayne Dr, College of Engineering, Detroit, MI, 48201, United States of America, rdellis@wayne.edu, Alper Murat, Mehmet Burak Senol
We develop a model to determine the optimal number of intelligent unmanned systems (i.e. robots) a user can manage (i.e. fan-out). Autonomy advances increase the affordable neglect time, enabling management of multiple robots. Earlier work proposed simple models that are not consistent with observations. Here, we consider additional aspects (e.g. mission achievement, environment, utilization) and offer a deterministic optimization model to estimate more accurate results for predicting fan-out.
4 - General Deviation Measures: Theory and Application Michael Zabarankin, Associate professor, Stevens Institute of Technology, Castle Point on the Hudson, Hoboken, NJ, 07030, United States of America, mzabaran@stevens.edu, Bogdan Grechuk
This talk discusses recent progress in the theory and application of general measures of deviation.
WC22
C - Room 212A
Complementarity Problems: Theories and Applications

Chair: Lanshan Han, Purdue University, 550 Stadium Mall Drive, West Lafayette, IN, 47907, United States of America, han144@purdue.edu 1 - Continuous-Time Point-Queue Models in Dynamic Network Loading Jong-Shi Pang, Professor, University of Illinois at UrbanaChampaign, 104 S. Mathews Avenue, Urbana, IL, 61801, United States of America, jspang@illinois.edu
This is the beginning of a mathematically rigorous study of the continuous-time dynamic user equilibrium problem using the mathematical paradigm of differential complementarity systems. Here, we focus on the investigation of continuous-time point-queue models and identify desirable properties that they should possess and discuss their numerical solution.
2 - Tools for Investigating Cargo Screening Processes Scenario Analysis to Agent Oriented Simulation David Menachof, Peter Thompson Chair in Port Logistics, The University of Hull, Hull University Business School, Logistics Institute, Kingston upon Hull, HU6 7RX, United Kingdom, d.menachof@hull.ac.uk, Peer-Olaf Siebers, Galina Aickelin, Uwe Aickelin
2 key stakeholders with diverse interests are involved in decision-making processes regarding port operations. Port operators seek a smooth flow of ops., while the border agencys main concern is national security, but not without limits to cost. Cost Benefit Analysis (CBA) is a tool that aids in finding the right balance between service, security, and costs. We review major approaches to CBA and introduce Agent-Oriented Discrete Event Simulation as an innovative approach for this purpose.
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C - Room 213BC
3 - Multistage Sampling of Terrorist Threat Scenarios Samrat Chatterjee, University of Southern California, 3710 McClintock Avenue, RTH 322, Los Angeles, CA, 90089-2902, United States of America, samrat.chatterjee@usc.edu, Stephen Hora
This study focuses on the development of statistical sampling methods to support terrorist threat scenario quantification decisions amidst uncertainties. A multistage sampling approach is proposed to address concerns related to scenario size, importance, and stratification.
Revenue Management with Consumer Behavior Models

Chair: Ozalp Ozer, Associate Professor, The University of Texas at Dallas, School of Management, 800 West Campbell Road, Richardson, TX, 75080, United States of America, oozer@utdallas.edu Co-Chair: Yanchong Karen Zheng, Assistant Professor, Massachusetts Institute of Technology, Sloan School of Management, Cambridge, MA, 02139, United States of America, yanchong@mit.edu 1 - Event Revenue Management with Resale Yao Cui, PhD Student, Ross School of Business, University of Michigan, Ann Arbor, United States of America, cuiyao@umich.edu, Izak Duenyas, Ozge Sahin
We develop a consumer behavior model of ticket purchase/resale in which buyers purchasing decision in the primary market is based on the outcomes of the resale market and valuation uncertainty. We analyze the optimal dynamic pricing strategy in the presence of a secondary market. We compare market structures and revenues resulting from dynamic pricing and options. We show that not only options improve the revenues but also the improvement is resulting from the shrinkage of the resale market.
WC24
C - Room 213A
Mixed Integer Programming

Chair: Jean-Philippe Richard, Associate Professor, University of Florida, 303 Weil Hall, Gainesville, United States of America, richard@ise.ufl.edu 1 - Base-2 Expansions for Linearizing Products of Functions of Discrete Variables Warren Adams, Professor of Mathematical Sciences, Clemson University, O-327 Martin Hall, Clemson, SC, 29634, United States of America, wadams@clemson.edu, Stephen Henry
An approach for representing functions of discrete variables, and their products, using logarithmic numbers of binary variables is presented. The resulting forms are important for reformulating general discrete variables as binary, and also for linearizing mixed-integer generalized geometric and discrete nonlinear programs where it is desired to economize on the number of binary variables.
2 - Convexification Techniques for Linear Complementarity Constraints Trang Nguyen, University of Florida, 303 Weil Hall, Gainesville, FL, 32611, United States of America, trang@ufl.edu, Mohit Tawarmalani, Jean-Philippe Richard
We describe a convexification technique for linear programs with linear complementarity constraints that generalizes the reformulation-linearization technique of Sherali and Adams and has similar convergence properties. We then consider certain complementarity problems appearing in KKT systems. For such problems, we show that all nontrivial facet-defining inequalities can be obtained through a simple procedure that aggregates constraints and use McCormick relaxations of bilinear terms.
2 - Optimal Timing of Sequential Distribution: The Impact of Day-and-Date Strategies Hyoduk Shin, Assistant Professor, Northwestern University, Kellogg School of Management, Evanston, IL, 60201, United States of America, hyoduk-shin@kellogg.northwestern.edu, Terrence August
The window between a films theatrical and video releases has been declining with some studios now testing day-and-date strategies (i.e., when a film is released across multiple channels at once). We present a consumer choice model and study the optimal video release time, examining trade-offs between substitutable products (theatrical and video forms), the possibility of purchasing both, and the timing of consumption. We demonstrate when the day-and-date strategy can be optimal for studios.
3 - Design and Verify: A New Scheme for Generating Cutting-Planes Santanu S. Dey, Georgia Institute of Technology, 765 Ferst Dr NW, Atlanta, GA, 30318, United States of America, santanu.dey@isye.gatech.edu, Sebastian Pokutta
A cutting-plane procedure for integer programs usually involves invoking a black-box procedure (like Gomory-Chvatal procedure) to compute a cuttingplane. In this talk, we describe an alternative paradigm of using the same cutting-plane black-box: First, we design an inequality independent of the cutting-plane black-box. Then we verify that the designed inequality is a valid inequality using the cutting-plane black-box. We undertake a systematic study of properties of verifiable inequalities.
3 - Strategic Purchase with Regret and Misperception of Availability Yanchong Karen Zheng, Assistant Professor, Massachusetts Institute of Technology, Sloan School of Management, Cambridge, MA, 02139, United States of America, yanchong@mit.edu, Ozalp Ozer
We study the impact of consumers regret and misperceived product availability on a firms inventory decision under a markdown policy. We show that both late-purchase regret and misperception of availability make it less necessary for the firm to use inventory rationing, whereas early-purchase regret encourages rationing. In addition, the firm can leverage these behavioral issues on the consumer side to substantially increase its profitability.
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4 - Discrete Entropy and the Complexity of Stochastic Integer Programming Karthekeyan Chandrasekaran, Georgia Institute of Technology, College of Computing, Atlanta, GA, United States of America, karthe@gatech.edu, Santosh Vempala
We consider random integer programs defined by linear constraints whose normal vectors are chosen independently from any spherically symmetric distribution. We show that with high probability, a program defined by O(n) constraints has an integer solution provided the corresponding polytope contains a ball whose radius is larger than a universal constant. For a polytope with m constraints in n-dimensional space, with n < m < 2^O(n), a ball of radius about Omega(sqrt(log (2m/n))) suffices.
Outsourcing in IT
Contributed Session
Chair: Biao Liu, Peking University, Peking University, Beijing, China, Beijing, BJ, 100871, China, biao_liu@pku.edu.cn 1 - The Impact of Knowledge Gap on Chinas Vendor Success in IT Service Outsourcing DU Zhanhe, PH. D., the School of Management, Xian Jiaotong University, No. 28 at Xianning West Road of Xian, Xian, 710049, China, laodu.008@stu.xjtu.edu.cn, Zongming Zhang
There are a large knowledge gap between Chinas vendors and their offshoring clients due to the different culture, technology, business, relationship, and process knowledge. Knowledge gap affects Chinas vendor success through some mediators such as knowledge transfer, partnership, and control. Absorptive capacity has strong moderating effects on the above relationships.
2 - Contract Design and Information Value in IT Service Outsourcing Zongming Zhang, PHD, Xian Jiaotong University, No.28, Xianning West Road, Shaanxi, Xian, 710049, China, zhang.zongming@stu.xjtu.edu.cn, Xiuwu LIAO, Shulin LIU
We analyze contracting issues and information value arising in IT service outsourcing. Depending on whether the service providers effort information and cost information are symmetric or not, we investigate how service outsourcing contracts can be designed in four scenarios. And the value of effort information and cost information is discussed.
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3 - An Operational Model of Data Center Operators and its Application to Staffing and Quality Monitoring Masahiro Asaoka, Fujitsu Laboratories Ltd., 4-1-1 Kamikodanaka, Nakahara-ku, Kawasaki, 211-8588, Japan, asaoka.masahiro@jp.fujitsu.com, Hideki Yamanaka
In data centers, fundamentally manual operations that cannot be logged in detail (e.g. hardware visual checking, visual monitoring of running automatic operations, etc.) are still remaining and thus it is hard to grasp the accurate load of operators based on logs. To overcome the situation, we have developed a system predicting the load of operators based on operation instructions and an operational model of operators without logs so as to assist staffing and quality monitoring.
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Lifecycle Issues in Environmental Operations

Contributed Session
Chair: Kashek Lee, Associate Professor/Associate head, Department of Industrial Engineering and Logistics Management, The Hong Kong University of Science and Technology, Rm4545,HKUST,Clear Water Bay, Kowlloon, Hong Kong - PRC, nlee@ust.hk 1 - Impact of Optimal Blend Models on Estimated Uncertainty in Biodiesel Lifecycle Carbon Footprint Ece Gulsen, Massachusetts Institute of Technology, E38-435 292 Main Street, Cambridge, United States of America, ece@mit.edu, Randolph Kirchain, Elsa Olivetti
Biodiesel industry operates with access to global feedstock supply. In addition to cost and quality management of the final fuel blend, recent regulations limit estimated lifecycle greenhouse gas emissions that are highly uncertain. Uncertainty-aware optimal blend models are shown to reduce uncertainty while controlling the final fuel cost and quality.
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Managing Service Systems

Chair: Achal Bassamboo, Northwestern University, Evanston, IL, United States of America, a-bassamboo@kellogg.northwestern.edu Co-Chair: Ramandeep Randhawa, Assistant Professor, University of Southern California, Marshall School of Business, Los Angeles, CA, 90089, United States of America, Ramandeep.Randhawa@marshall.usc.edu 1 - Overflow Networks: Approximations and Implications to Call Center Outsourcing Ohad Perry, IEMS, Northwestern University, 2145 Sheridan Rd., Evanston, IL, 60208, United States of America, ohad.perry@northwestern.edu, Itai Gurvich
Motivated by call-center outsourcing problems, we consider a network with multiple call centers overflowing some of their calls to a central call center. Relying on a separation of time scales, we establish heavy-traffic approximations and prove an asymptotic-independence result which facilitates expressions for the customer waiting-time distributions. The asymptotic independence is shown to be useful in solving some call-center optimization problems.
2 - Invasive Species Control Based on a Cooperative Game Esra Buyuktahtakin, Assistant Professor, IME Department, Wichita State University, Wichita, KS, United States of America, esra.b@wichita.edu, Zhuo Feng, George Frisvold, Ferenc Szidarovszky
We study a long-term dynamic model for controlling invasive species using the theory of cooperative games, with the application to the case of buffelgrass control in the Arizona desert. The interest groups are concerned about the damages to three different valued and threatened resources including saguaros, buildings and vegetation. The model decides the optimal allocation of labor and budget to these resources to control the population of the species in a multiperiod planning horizon.
3 - Pollution Reduction Policies under Uncertainty and Their Costs Motoh Tsujimura, Doshisha University, Kamigyo-ku, Kyoto, 602-8580, Japan, mtsujimu@mail.doshisha.ac.jp
We investigate pollutant reduction policies under uncertainty. We consider two kinds of policies distinguished by their costs. One incurs proportional reduction cost and the other incurs fixed and proportional reduction costs. To solve these problems, we formulate the agents problems as a singular stochastic control problem and a stochastic impulse control problem, respectively. Using this analysis, we show optimal pollutant reduction policies and present numerical analysis.
2 - Staffing Multiclass Service Systems: Problem Formulations and Consistency Constraints Seung Bum Soh, Kellogg School of Management, 2001 Sheridan Rd., Evanston, IL, 60201, United States of America, seung-soh@kellogg.northwestern.edu, Itai Gurvich
In the presence of multiple customer classes, the problem of minimizing staffing costs subject to quality of service targets raises conceptual issues already in the formulation stage. We make a first step in studying the question of good formulations by introducing a notion of consistency amongst customer classes and examining its implications on the outcomes of the capacity planning. The solution to the resulting staffing and routing problems help us capture the cost of consistency.
4 - Performance Enhancement of the Engineered Particles for Geoengineering Kashek Lee, Associate Professor/Associate head, Department of Industrial Engineering and Logistics Management, The Hong Kong University of Science and Technology, Rm4545,HKUST,Clear Water Bay, Kowlloon, Hong Kong - PRC, nlee@ust.hk, Bin Dai
Engineered particles have many advantages in geoengineering to stabilize climate change. In this study, the performance of the engineered particles is enhanced from the radiation shielding and aerodynamics by material selection and structure design, respectively. We find that the improvement with a factor of around 1000 is readily achievable.
3 - Considering Service Quality in a Two-Stage Service Process Azin Farzan, Doctoral Student, University of Washington, Box 353226, Foster School of Business, Seattle, WA, 98195-3226, United States of America, afarzan@uw.edu, Yong-Pin Zhou
We analyze service quality in a two-stage service process. Cost depends on both staffing and effort in a multiplicative way. Waiting time at each stage is determined by local staffing level, but customer satisfaction is determined by effort at both that and the preceding stages. We consider decentralized and outsourcing scenarios and devise a coordination mechanism that is robust. We also investigate the role of pooling when multiple first-stage clients outsource to the same second-stage firm.
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Operations / Finance Interface

Contributed Session
Chair: Sandun Perera, School of Management, The University of Texas at Dallas, Richardson, TX, 75080, United States of America, scp080020@utdallas.edu 1 - Do Merged Firms Benefit from Inventory Pooling? Nagihan Comez, Assistant Professor, Bilkent University, Bilkent, Ankara, 06800, Turkey, comez@bilkent.edu.tr, Basak Tanyeri
We test the basic inventory pooling theory predictions on mergers/acquisitions using firm-level data for 246 same-industry mergers carried out in U.S. between 1981-2009. Our results provide empiric support for the theory: the inventory turnover of mergers improve relative to their industry, following the successful completion of mergers and the improvement in inventory turnover is inversely related with the pre-merger demand correlation between merging firms.
4 - The Value of Static Pricing in Queueing Systems with Uncertain Arrival Rates Ramandeep Randhawa, Assistant Professor, University of Southern California, Marshall School of Business, Los Angeles, CA, 90089, United States of America, Ramandeep.Randhawa@marshall.usc.edu, Moshe Haviv
We consider revenue and social optimization in an M/M/1 queue with price and delay sensitive customers, and study the performance of static, or arrival rate independent, pricing. We find that the value of static pricing depends both on the objective criterion and the customers delay sensitivity. In particular, the performance increases in the delay sensitivity and is always better under revenue optimization, where in some cases static pricing may capture more than 99% of the optimal revenue.
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4 - Measures of Risk in Disease Transmission Networks Eva Enns, PhD Candidate, Stanford University, 117 Encina Commons, Stanford, United States of America, evaenns@stanford.edu, Margaret Brandeau
The contact network structure through which an infectious disease spreads influences the evolution of an epidemic, both in the expected total number of infections and the speed at which the disease spreads. We explore measures of risk relating to network structure and discuss implications for disease control policies.
2 - Dynamic Financial Hedging Strategies in Storable Commodity Inventory Systems Zhan Pang, Lancaster University, Department of Management Science, Lancaster, United Kingdom, z.pang@lancaster.ac.uk, Qing Ding, Panos Kouvelis
We address a dynamic financial hedging problem in storable commodity inventory systems in a mean-variance framework. We formulate this problem as a dynamic program and characterize the structure of the optimal joint inventory control and hedging strategies. Our results shed new light into the financial risk management of operational systems.
3 - Impact of Product Recalls on Shareholder Wealth John Ni, Indiana University, Kelley School of Business, 1309 E 10th Street, Bloomington, IN, 47405, United States of America, jzni@indiana.edu, Barbara B Flynn, F. Robert Jacobs
The recalls of lead-paint related toys in 2007 caused serious concerns among consumers and investors. To estimate the impact of a recall announcement on firm value, we applied event study methodology to compute the abnormal returns around the date when a recall is announced, using data on recalls announced by the Consumer Product Safety Commission. To explain the difference in abnormal returns, we used cross-sectional regression to examine a number of firm- and recall-related characteristics.
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Research Supporting Sustainability

Contributed Session
Chair: Zhi Tao, Kent State University, 475 Terrace Drive, Kent, OH, 44242, United States of America, ztao@kent.edu 1 - Optimization of a Two Step Aluminum Recycling Production Process Tracey Brommer, Massachusetts Institute of Technology, 292 Main Street, Room E38-435, Cambridge, MA, 02142, United States of America, tbrommer@mit.edu, Elsa Olivetti, Randolph Kirchain
A large aluminum producer is considering the construction of a waste upgrading facility that would feed into a recycling plant. A recourse optimization model was developed to maximize recycling of the waste material in the presence of demand uncertainty. The challenges faced by the company stem from the variable supply of incoming materials and demand for final products as well as perishable intermediate products. The models ability to maximize material use is evaluated through simulation against actual production data.
4 - Market-reaction-adjusted Optimal Central Bank Intervention Policy in the Foreign Exchange Market Sandun Perera, School of Management, The University of Texas at Dallas, Richardson, TX, 75080, United States of America, scp080020@utdallas.edu, Alain Bensoussan, Hongwei Long, Suresh P. Sethi
We study a central bank intervention problem in the foreign exchange market when an intervention temporarily affects the market dynamics. Motivated by empirical observations, we assume that the market observes and reacts to the interventions by the central bank. Impulse control theory is used to prove a verification theorem with QVI and to solve the problem of finding the optimal times and amounts of interventions. We also discuss a practical instance of the problem and solve it numerically.
2 - Plant Root Optimization James Heppell, Southampton University, University Road, Southampton, SO17 1BJ, United Kingdom, jph106@soton.ac.uk, Tiina Roose, Joerg Fliege, Konstantinos Zygalakis
To maximise sustainable crop production, we optimise fertilised placement and root structure of plants using models from Roose and Zygalakis for plant root growth. We report the performance of several optimization techniques on this multi-objective, multi-variable problem.
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Health Systems Modeling and Decision Making

Chair: Eva Enns, PhD Candidate, Stanford University, 117 Encina Commons, Stanford, United States of America, evaenns@stanford.edu 1 - Population Sampling in Dynamic Healthcare Policy Lauren Cipriano, Stanford University, Huang Engineering Center, Stanford, United States of America, cipriano@stanford.edu, Thomas Weber
The desirability of a health program may decisively depend on population trends. We consider the decision about treating a certain cohort in a time-varying population with imperfectly observable dynamics. To reduce uncertainty it is possible to collect costly samples. We determine an optimal sampling policy and apply our results to hepatitis C screening of a population with linear prevalence dynamics.
3 - Planned Obsolescence and Recycling Costs with Product Take Backs Effie Stavrulaki, Associate Professor, Bentley University, 175 Forest Street, Waltham, MA, 02452, United States of America, estavrulaki@bentley.edu, Michael Pangburn
Legislation that requires a firm recycle its end-of-life products may encourage the firm to defer recycling costs by increasing product durability, counter to the strategy of planned obsolescence (i.e. decreasing durability). We consider the tension between planned obsolescence and recycling costs, in a 2-period setting. We analyze how recycling costs impact optimal product durability, and consider how differences in recycling costs across the first and second periods affect the firms policy.
4 - Environmental Cost Based Operation Decisions Zhi Tao, Kent State University, 475 Terrace Drive, Kent, OH, 44242, United States of America, ztao@kent.edu
This paper integrates carbon emissions in the joint economic-lot -size model under deterministic conditions and investigates how a jointly optimal ordering are beneficial for both environmental conscious parties in a single vendor and a single buyer setting. Our sensitivity analysis provides insights on the management of relationship between buyer and vendor in a environment conscious society.
2 - A Multi-agent Supply and Demand Model for Providing Health Care to a Marginalized Population Greg Werker, University of British Columbia, 3869 W. 18th Avenue, Vancouver, BC, V6S 1B4, Canada, greg.werker@sauder.ubc.ca, Martin Puterman
Motivated by Vancouvers Downtown Eastside a small geographic area with many health agencies operating independently we propose individual models to represent provision of mental health, addictions treatment, and primary care services. These models are linked at the system level by a multi-agent model containing both competitive and cooperative elements. We present mechanisms to encourage cooperative actions that benefit the clients.
3 - Using Models to Identify Risk-appropriate Cancer Screening David Hutton, University of Michigan, Ann Arbor, MI, United States of America, dwhutton@umich.edu
Cancer screening guidelines are often based on national population averages. But, there are particular population groups that have higher-than-average risks for specific cancers or cancer-precursors. I will describe three examples of how models can be used to help evaluate cost-effectiveness of cancer screening interventions. I will describe how the flexibility afforded by models can allow researchers to quickly and easily evaluate targeted cancer screening programs.
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WC36
Statistical Decision Making and Quality Estimation in Energy Manufacturing Application

Chair: Seungchul Lee, Postdoctoral Research Fellow, The University of Michigan, 1035 H.H. Dow, 2300 Hayward St., Ann Arbor, MI, 48109, United States of America, seunglee@umich.edu Co-Chair: Jeonghan Ko, Assistant Professor, University of Nebraska, Lincoln, W338 Nebraska Hall, Lincoln, NE, 68588, United States of America, jko2@unl.edu 1 - Remaining Useful Life Prediction and Optimal Replacement Policy for Battery Seungchul Lee, Postdoctoral Research Fellow, The University of Michigan, 1035 H.H. Dow, 2300 Hayward St., Ann Arbor, MI, 48109, United States of America, seunglee@umich.edu
Next-generation battery technologies will constitute the enabling tools that would lead to information-rich batteries, thus allowing the transparent assessment of a batterys health as well as the prediction of a batterys remaininguseful-life (RUL) and its subsequent impact on vehicle mobility. Therefore, we will present how to estimate RUL and how to find the optimal replacement policy for batteries using the total time on test (TTT plot).
1 - Achieving Strategic Balance in Hospital Equipment Investments: Money versus Mission Don Kleinmuntz, Executive VP, Strata Decision Technology, 2001 S First St STE 200, Champaign, IL, 61820, United States of America, dnk@strata-decision.com
Hospitals confront a growing need for newer, better medical technology, along with many other demands on scarce funds. This talk will describe my experience implementing an OR-based approach that is now used on a routine basis by hundreds of US hospitals to strategically allocate funds to competing technology projects. I will provide insight into the processes hospitals use to implement this model, along with the challenges that they encounter.
2 - An Agent-based Model Approach to Study Accountable Care Organization Pai Liu, University of Southern California, 956 W 23 St, Los Angeles, CA, 90007, United States of America, pailiu@usc.edu, Shinyi Wu
Accountable Care Organization (ACO) has been widely discussed as a strategy to control the rapidly rising healthcare costs and improve the quality of care, while there is no consensus on how to build an ACO. We proposed a conceptual framework using agent-based modeling to study the relationships between the design of the ACO and its capability of achieving its environed goals.
3 - Investment Decision Making in Hospitals: A System Dynamics Approach Andrew J. Henry, Virginia Tech, 110 Durham Hall, Blacksburg, VA, 24060, United States of America, ajhenry@vt.edu, Christian Wernz, Peter Mayer
We develop a system dynamics model to evaluate technology investment decisions in a healthcare setting. Our model provides financial justification for decisions based on area and need populations, capacity, variable costs and revenue, success rates, and market share over a time horizon. The model takes into account a dynamic market share as well a success rate based on a learning curve. Overall, the model provides a structured way of thinking about the impacts of a costly technology investment.
2 - Assembly Strategies for Product Remanufacturing with Variable Quality Returns Xiaoning Jin, PhDCandidate, University of Michigan, Ann Arbor, MI, United States of America, xnjin@umich.edu, S. Jack Hu, Jun Ni
This paper studies optimal policy for modular product reassembly in remanufacturing where a firm receives product returns with variable quality and reassembles products of multiple classes to orders. Higher quality modules are used to substitute for lower quality modules during reassembly. We show that the optimal reassembly and substitution follows a thresholdbased control policy.We compare the optimal policy to the exhaustive assembly policy and show the great benefit in substitution.
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3 - Sustainable Smart Battery Seyed Mohamma Rezvanizaniani, University of Cincinnati, 515 ludlow ave, Cincinnati, Oh, 45220, United States of America, rezvansd@mail.uc.edu
LATE CANCELLATION
Joint Session DM/HAS: Data Mining and OR in Healthcare Problem and Clinical Decision Support
Sponsor: Data Mining/Health Applications Sponsored Session
Chair: Sung Won Han, Researcher, University of Pennsylvania, 423 Guardian Dr, Philadelphia, PA, United States of America, hansungw@mail.med.upenn.edu 1 - Unified Framework for Change Point Model by Reproducing Kernel Hilbert Space-based Spline Sung Won Han, Researcher, University of Pennsylvania, 423 Guardian Dr, Philadelphia, PA, United States of America, hansungw@mail.med.upenn.edu, Mary Putt, Theresa Busch
The biological data such as blood flow shows a non-linear curve with change points, which cannot be fitted by a unique parametric model. Thus, we suggest the reproducing kernel Hilbert space-based spline, which is a unified framework for many change point models. Since the spline can be considered as the mixed effect model, we use the Bayesian approach for the estimation. We investigate the performances of them by simulation study and apply them to the data from Photodynamic therapy for cancer.
A sustainable smart battery is the result of merging the new battery technology with smart enabling tools. The smart battery is an information-rich energystorage device with enhanced capabilities. The enhanced capabilities include: embedded service capabilities; remote smart monitoring for hard-to-access applications; and online management of batteries during their life-cycle to ensure mobility.
4 - Electric Power Resource Planning: A Continuous-Discrete Modeling Approach Rhythm Suren Wadhwa, NTNU, Richard Birkelands Vei 2B, Trondheim, Norway, rhythm.s.wadhwa@ntnu.no, Seungchul Lee
In this study, we propose to develop a comprehensive simulation based decision making framework to determine the most desirable combination of resource investments for electric power generation. The distributed power system considered here has two major components including energy generation via wind farm and fossil fuel. The proposed approach has been successfully demonstrated for the electric utility resource planning in Sor-Trondelag, Norway.
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Technology Investment Decision Making in Hospitals

Chair: Andrew J. Henry, Virginia Tech, 110 Durham Hall, Blacksburg, VA, 24060, United States of America, ajhenry@vt.edu Co-Chair: Christian Wernz, Assistant Professor, Virginia Tech, 205 Durham Hall (0118), Blacksburg, VA, 24061, United States of America, cwernz@vt.edu
2 - A Location Problem for Trauma Centers and EMS Transportation Resources Taesik Lee, Assistant Professor, Korea Advanced Institute of Science and Technology, Department of Industrial & Systems Eng., 335 Gwahangno, Yuseong-gu, Daejeon, Korea, Republic of, taesik.lee@kaist.edu, Soo-Haeng Cho, Hoon Jang, John Turner
Providing appropriate care to major injury patients requires such patients be transported to a Trauma Center within 60-min. In this talk, we discuss a location problem for trauma centers and EMS transportation resources. This problem can be modeled as a capacitated facility location problem coupled with a chance constrained probabilistic model. We use our methodology to simultaneously locate trauma centers and EMS transportation resources to better serve the citizens of the Republic of Korea.
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empirically analyzes the value added by a GIS in vehicle routing by solving a standard set of vehicle routing problem instances with and without GIS intervention.
3 - Designing Optimal Association Rules for Decision-Making in Healthcare Allison Chang, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Bldg. E40-149, Cambridge, MA, 02139, United States of America, aachang@mit.edu, Dimitris Bertsimas, Cynthia Rudin
In many healthcare applications, it is advantageous to use methods that not only predict well, but are also easy to explain to patients and medical professionals. Associative classification has emerged as a means of combining the interpretability of association rules with the predictive power of classification. We propose a novel mixed integer optimization (MIO) approach for this task and report empirical evidence using medical datasets to demonstrate the performance of this method.
2 - A Review of Simulation Techniques to Solve the Vehicle Routing Problems Javier Faulin, Associate Professor, Public University of Navarre, Department of Statistics and OR, Los Magnolios Building-1st fl, Pamplona, NA, 31006, Spain, javier.faulin@unavarra.es, Angel A. Juan, Scott E. Grasman, Alejandro Garcia del Valle, Miguel A. Llorente
The use of Simulation tools is very well-known in solving many problems in Transportation and Traffic, but it is rather new in the resolution of Vehicle Routing Problems. Nevertheless, some contributions have recently been developed to provide algorithms which using Monte Carlo Simulation allow the obtaining of good solutions for different VRP models. Here, we make a review of those methods and discuss their efficiency in solving the Capacitated and Stochastic VRPs.
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C - Room 219B
Statistical Process Control and Economic Design

Chair: Justin Chimka, University of Arkansas, 800 W Dickson St, Fayetteville, United States of America, jchimka@uark.edu 1 - Economic Design for Individual Observations of a Poisson Process Ryan Black, University of Arkansas, 800 W Dickson St, Fayetteville, United States of America, rwblack@uark.edu, Justin Chimka
That probability of Type I error is not evenly distributed beyond upper and lower control limits is chief among consequences of the c chart being theoretically inappropriate for Poisson distributed defects. Furthermore the normal approximation to the Poisson is of little use when c is small. These practical and theoretical concerns should motivate the computation of true errors associated with individuals control assuming the Poisson distribution.
WC39
Software and Platform Management

Chair: Terrence August, Assistant Professor, University of CaliforniaSan Diego, Rady School of Management, La Jolla, CA, 92093, United States of America, taugust@ucsd.edu 1 - Commercialization of Platform Technologies Daewon Sun, University of Notre Dame, Notre Dame, IN, United States of America, dsun@nd.edu, Hemant Bhargava, Byung Cho Kim
We examine product line design, price discrimination, and launch timing to manage the growth vs. revenues dilemma for a platform firm that serves two markets, the user and developer markets, such that participation in one market depends positively on the size of the other market, but where there remains uncertainty in the extent of developer participation.
2 - Economic Design of the Optimal Parameters in the Presence of Skewness Paul Goethals, Department of Mathematical Sciences, United States Military Academy, West Point, NY, 10997, United States of America, pgoetha@clemson.edu, Greg Boylan, Byung Rae Cho
Many of the statistical quality tools developed for process or product optimization assume that the underlying characteristic observations are normally distributed. For a wide number of responses, however, the presence of non-zero skewness may negatively influence generating optimal solutions. This research specifically addresses the implementation of alternative statistical methods for monetary gain when working with asymmetric process distributions.
2 - A Text Mining Framework for Automatic Alliance Discovery Yilu Zhou, George Washington University, 2121 I Street, NW, Washington, DC, 20052, United States of America, yzhou@gwu.edu, Yi Zhang, Nicholas Vonortas
Strategic alliances among organizations are one of the central drivers of innovation and. However, discovery of alliances has relied on manual search and has limited scope. We address the limitation by proposing a text mining framework that automatically extracts alliances from news articles. The model not only integrates meta-search, entity extraction and shallow and deep linguistic parsing techniques, but also proposes an innovative relation extraction method to deal with the extremely skewed and noisy data and further improve the precision using various linguistic features.
3 - Statistical Process Control for the Fractal Dimension of a Time Series Jingjing Tong, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, United States of America, tong@uark.edu, Justin Chimka
The fractal dimension (FD) of a time series can be estimated to measure its selfsimilarity or complexity. By arbitrarily dividing a series of data in time and estimating the FD of each part one can monitor observations of complexity or self-similarity using statistical process control methods. For example the FD associated with a series of temperature data assumedly in control appear well suited to the individuals control chart with respect to distribution assumption and Type I error.
3 - Who Should be Responsible for Software Security? A Comparative Analysis of Liability Policies Terrence August, Assistant Professor, University of CaliforniaSan Diego, Rady School of Management, La Jolla, CA, 92093, United States of America, taugust@ucsd.edu
Vendor liability for software security vulnerabilities has been the center of an important debate gaining government attention in legislative committees. The importance of this question surrounding vendor security liability is amplified when one considers the increasing emergence of zero-day attacks. In this paper, we compare the effectiveness of three software liability policies: vendor liability for damages, vendor liability for patching costs, and government imposed security standards.
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Methodologies for VRP

Contributed Session
Chair: Javier Faulin, Associate Professor, Public University of Navarre, Department of Statistics and OR, Los Magnolios Building-1st fl, Pamplona, NA, 31006, Spain, javier.faulin@unavarra.es 1 - A Comprehensive Empirical Analysis of Value Addition of GIS in Vehicle Routing Hindupur Ramakrishna, Professor, University of Redlands, 1200 E. Colton Avenue, Redlands, CA, 92373, United States of America, Hindupur_Ramakrishna@redlands.edu, Avijit Sarkar
Geographic information systems (GIS) are being increasingly used to facilitate the solution of complex real-life problems in vehicle routing. The extent of use of GIS and its contributions vary and pointers to the value added by GIS infusion are scattered in the literature. Using an experimental design approach, this work
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2 - The Difference between Imagination and Learning Timo Ehrig, Research Scientist, Max Planck Institute, Inselstr. 22, Leipzig, 04103, Germany, ehrig@mis.mpg.de, Rich Bettis
Why are some firms -like Apple- successful in finding and implementing ideas that are different sources of competitive advantage than others are able to find and implement? We present a model to understand the difference between imagination and learning. This model helps us to identify the conditions under which superior cognition can create competitive advantages, and which skills a firm with a potentially superior cognitive insight needs to transform it into competitive advantages.
Investments in NPD Stages and Applications of Technologies

Chair: Cheryl Druehl, George Mason University, Fairfax, VA, United States of America, cdruehl@gmu.edu 1 - Optimal Portfolio Strategies for New Product Development Emre Nadar, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, enadar@andrew.cmu.edu, Laurens Debo, Alan Scheller-Wolf
We study the problem of project selection and resource allocation in a multistage new product development process with exponential experimentation times, stage-dependent resource constraints, and Bayesian updating. We model the problem as an infinite-horizon Markov decision process, establishing the optimality of a new type of policy, non-congestive promotion. We numerically evaluate the effectiveness of our non-congestive promotion policy as a heuristic in a generic problem.
3 - Knowledge Conflict in Diversified Firms: How Agglomeration Increases Monitoring Costs Charles Williams, Asst. Professor, Bocconi University, Via Sarfatti, 25, Milano, MI, 20136, Italy, fcharles.williams@gmail.com, Elena Vidal
In this paper we study the market characteristics that can raise costs of managing multiple markets in diversified firms. We explore a key driver of diseconomies of scope for diversified firms: information stickiness in geographically concentrated industries. We argue that competing in concentrated industries requires sticky information that cannot easily be transferred to non-local headquarters. We test this proposition at the industry and firm level using data from multiple archival sources.
2 - Optimal Investment in Product Support and New Product Development in Pharmaceutical Industry Zhili Tian, PhD Candidate, Washington University in St. Louis, Campus Box 1133, One Brookings Drive, St. Louis, MO, 631304899, United States of America, tianzh@wustl.edu, Panos Kouvelis
A firm invests in the support of existing product and new product development. The first influences the adoption of the existing product while the second brings new product in the future market. The firm has to balance the investment in the two competing projects. We optimize the investment in these two types of projects. We estimate the new drug adoption model, which is a function of investment in different advertisement vehicles using drugs from Pfizer and the similar drugs in the market.
4 - The Open-combined Business Model and a Firms Success Yongkyun Na, Stanford University, Huang Engineering Center, 475 Via Ortega, Stanford, United States of America, ykna@stanford.edu, Edison Tse
This paper examines by what means a firm from a newly industrialized country became a global company that can maintain a strong incumbent position and relatively secure financial performance in economic downturns. Through the indepth case study of Samsung Electronics, including its historical evolution, this study suggests that the open-combined business model can be used as a framework to increase an incumbents abilities to succeed through balancing strategies.
3 - How Green is Nano? Jos Lobo, Research Professor, Arizona State University, W.P. Carey School of Business, Tempe, AZ, 85287, United States of America, Jose.Lobo@asu.edu, Deborah Strumsky
Much of the interest in and support for nanotechnology research is motivated by the expectations that nano can play an important enabling role in the development of renewable energy, electric battery, green manufacturing, and environmental clean-up and remediation technologies. But how green is nano? Using a recently constructed concordance of green technologies for US patent data, we have explored how prevalent is the use of nanotechnology in green patented inventions.
5 - Market Structure and Strategic Corporate Social Responsibility Olga Hawn, PhD Candidate in Strategy, The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, 27708, United States of America, olga.hawn@duke.edu, Hyounggoo Kang
While the literature has generally explained why companies would engage in corporate social responsiblity (CSR) and how CSR can affect competition by generating competitive advantage, it has yet to identify the conditions under which the market structure can affect CSR, while CSR activities of a firm and its competitors can in turn impact output and prices. We build an economic model that demonstrates how the trade-offs that firms face in the market may affect their CSR choices.
4 - A Classification Methodology for Network Sensors by Technological Class Soumyo Moitra, Software Engineering Institute, 4500 Fifth Avenue, Pittsburgh, PA, 15213, United States of America, sdmoitra@hotmail.com
We consider network sensors used to monitor data traffic to detect anomalies and cyber attacks. Different classes of sensors represent different technological capabilities. From the perspective of network security, we develop a methodology to classify sensors. The aspects related to their features that are significant for network security are considered. A model is developed that assesses the effectiveness of sensors as a function of their features and capabilities.
WC42
Interface Between Information Systems and Marketing

Chair: Xinxin Li, Assistant Professor, University of Connecticut, 2100 Hillside Road U1041, Storrs, CT, 06269, United States of America, xinxin.li@business.uconn.edu 1 - News, Networks and Users: Network Properties and Online News Consumption William Rand, University of Maryland, College Park, MD wrand@umd.edu, Chrysanthos Dellarocas, David Anderson, Zsolt Katona
In order to successfully transition to digital and social media, newspapers need to have a better understanding of how users consume news online. We test the hypothesis that both network properties and content quality affect news consumption by analyzing a large clickstream dataset using traditional regression models, agent-based modeling and discrete choice models. We show that content organizations need to spend effort on both content creation and content linking to be successful.
WC41
Corporate Level Strategy

Contributed Session
Chair: Olga Hawn, PhD Candidate in Strategy, The Fuqua School of Business, Duke University, 1 Towerview Drive, Durham, 27708, United States of America, olga.hawn@duke.edu 1 - Corporate Wrongdoing, Corporate Communication Strategies, and Stakeholder Reactions Michael Hill, The University of Georgia, The University of Georgia, 400 Brooks Hall, Athens, GA, 30602, United States of America, mikehill@uga.edu, Jonathan Bundy
Using a ten-year sample of more than 2,000 aggressive earnings restatements, our study investigates the impact of corporate communication responses on stakeholder reactions (i.e., stock prices) to corporate wrongdoing. This research contributes to research on corporate wrongdoing and communication strategies by presenting a theoretical model explaining how information conveyed to key corporate constituents during times of heightened scrutiny influence stakeholders reactions.
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4 - Regional Electricy Market Impacts of GHG Emission Limits: Evidence from a Bottom-Up Top-Down Model Ian Sue Wing, Associate Professor, Boston University, Department of Geography & Environment, 675 Commonwealth Avenue, Boston, MA, 02215, United States of America, isw@bu.edu, Karina Veliz-Rojas
US greenhouse gas (GHG) emission limits would raise electricity prices by forcing costly efficiency investments and interfuel substitution away from coal. We assess the impacts on regional power markets and economic welfare using a computable general equilibrium (CGE) model that integrates bottom-up electricity supply detail at the state level. We draw implications for the effects of EPAs proposed command-and-control approach to reducing GHG emissions from the electricity sector.
2 - Price Dispersion and Loss Leader Pricing: Evidence from the Online Book Industry Xinxin Li, Assistant Professor, University of Connecticut, 2100 Hillside Road U1041, Storrs, CT, 06269, United States of America, xinxin.li@business.uconn.edu, Bin Gu, Hongju Liu
We develop a theoretical model to analyze pricing strategies of retailers with asymmetric cross-selling capabilities and empirically test our model predictions using data from the online book retailing industry. We find that retailers with better cross-selling opportunities have higher incentives to adopt loss leader pricing on high demand products. Price dispersion rises when demand increases, mainly driven by the price difference between retailers with different crossselling capabilities.
3 - A Dynamic Analysis of Competition between Content Creators in Social Media Anjana Susarla, Carnegie Mellon, Tepper School of Business, Pittsburgh, PA, 15213, United States of America, anjanas@andrew.cmu.edu
The economics of digital publishing overturns existing patterns of content production and distribution. We examine the context of YouTube to analyze how competition between content creators is shaped by (i) the collective dynamics of crowd sourcing, (ii) the role of social influence and (iii) linkages between content creators.
WC44
Optimization Methods and Applications

Contributed Session
Chair: Carolina Saldana, Research Coordinator, Universidad Extenado de Colombia, Cr 1 No 70-54 apto 803, Bogota, Colombia, jenny.saldana@uexternado.edu.co 1 - The IDR Method for Solving Large, Parameterized Linear Systems of Equations Matthias Miltenberger, PhD Student, Zuse Institute Berlin, Takustr. 7, Berlin, 14195, Germany, miltenberger@zib.de
Induced Dimension Reduction (IDR) methods as new iterative solvers are a promising approach when dealing with general matrices. In many practical problems the need for solving several similar linear systems of equations one after another occurs. Often the concept of Krylov Recycling can be applied to such a sequence to accelerate the solution process. This presentation gives an introduction to IDR methods and shows how recycling techniques can be incorporated into them.
4 - Optimal Keyword Auctions with Costly Positions De Liu, University of Kentucky, Lexington, KY, 40506, United States of America, de.liu@uky.edu, Jun Li, Shulin Liu
Search engines incur hidden costs whenever an advertisement negatively affects user experiences. Viewing such costs as provision costs of keyword advertising, we characterize the optimal mechanism for keyword advertising in a general framework that accommodates advertiser/position-specific click-through rates and provision costs. We obtain explicit allocation and payment rules for three specific settings in which advertisers can be optimally allocated using simple scoring rules.
WC43
Hybrid Models for Energy and the Environment

Chair: Pedro Linares, pedro.linares@upcomillas.es 1 - Hybrid Modeling for Electricity Policy Assessments Renato Rodrigues, Assistant Researcher, Institute for Research in Technology - IIT, C/ Santa Cruz de Marcenado 26, Madrid, 28015, Spain, renato.rodrigues@iit.upcomillas.es
This work presents a Hybrid electricity policy evaluation instrument capable of addressing energy and environmental assessments. The supply-side electricity generation detail is considered concurrently with the heterogeneity in time of the electricity market through the explicit inclusion of load duration curves within both Top-down and Bottom-up components.
2 - Development of a System Identification Method by an Optimal Control Approach Jinkun Lee, Pennsylvania State University, 1435 Harris St, State College, United States of America, leejinkun@gmail.com, Vittal Prabhu
In the optimal control theory, the minimization of cost functional is based on the system dynamics which is provided as a form of velocity function in many cases. In this work, we are focusing on finding out this system dynamic function which is unknown by an observation of cost functional trajectory which minimizing the variance by an specific controller. This work may contribute to the system identification process of a complex system without identifying all its component systems.
3 - Solving Data Related Models Within GAMS Timo Lohmann, GAMS Development Corp., 1217 Potomac St. NW, Washington, DC, United States of America, lohmann.tmo@googlemail.com, Michael Bussieck, Michael Ferris
In many applications, optimization of a collection of problems is required where each problem is structurally the same, but in which some of the data defining the instance is updated. Such models are easily specified within modeling systems, but have often been slow to solve. We describe a new GAMS language extension, GUSS, that allows efficient solving of these problems. The utility of this approach is shown in an application: SDDP. We compare the results using GUSS with ILOG CPLEX Concert.
2 - General Equilibrium, Electricity Generation Technologies and the Cost of Carbon Abatement Sebastian Rausch, Dr., Massachusetts Institute of Technology, 77 Massachusetts Avenue, Bldg E19-411, Cambridge, MA, 02139, United States of America, rausch@mit.edu
The complexity of an integrated representation of economic and electricity systems make simplifying assumptions appealing, but there is no evidence in the literature on how important the pitfalls may be. The aim of this paper is to provide such evidence, drawing on numerical simulations from a suite of partial and general equilibrium models that share common technological features and are calibrated to the same benchmark data.
3 - An IP Approach for Evaluating Energy R&D Funding Decisions with Optimal Budget Allocations Jeremy Eckhause, LMI/University of Maryland, 2000 Corporate Ridge, McLean, VA, 22206, United States of America, jeckhause@lmi.org, Danny Ray Hughes, Steven Gabriel
Using real options techniques for R&D project selection to mitigate risk can increase overall project value. Employing SDPs do not easily accommodate the inclusion of optimal a priori budgets or side constraints. We formulate an IP whose solution is equivalent to existing SDP models but incorporates these additional features. The IP formulation solves what is otherwise a nested twolevel problem where the lower-level problem is an SDP. We compare the performance of the IP to that of the SDP.
4 - Semidefinite Programming Applied to Economic Order Quantity Problems Carolina Saldana, Research Coordinator, Universidad Extenado de Colombia, Cr 1 No 70-54 apto 803, Bogota, Colombia, jenny.saldana@uexternado.edu.co, Carlos Ivan Gonzalez
This work is a research contribution in the direction to finding new ways to solve (S, s) type basic problems, as is the Economic Order Quantity (EOQ) one in an effective way. To that end alternative methods of semidefinite relaxation of dynamical programs using binary.
5 - A Successive Nested Partitions Method for Constrained Optimization Jin Sun, Staff Researcher, IBM Research China, Building 19# Zhongguancun Software Park, 8 West Dongbeiwang Rd., Haidian District, Beijing, 100094, China, sunjinsj@cn.ibm.com, Bin Zhang, Wenjun Yin, Jin Dong, Ming Xie
A successive nested partitions method is developed by embedding the nested partitions method into the Lagrangian relaxation framework. A heuristic method is developed to initialize the search of each iteration, and avoids computing from the very beginning and thus can save computational efforts. Numerical testing demonstrates the effectiveness of the successive nested partitions method.
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2 - Boom, Bust, and Renewal Capability Trajectories Michael Gary, Australian School of Business, UNSW, Sydney, Australia, sgary@unsw.au.ed
Fieldwork with a startup firm that experienced boom, bust, & renewal was the basis of a simulation model that replicates the firms historical trajectory. The model shows how excessively rapid growth undermines capabilities & nearly leads to bankruptcy. Transforming & renewing capabilities takes several years; employees must unlearn bad practices before learning superior routines. The findings yield implications for how fast firms should grow, & for future research into capability development.
Inspection and Test

Contributed Session
Chair: Seong-joon Kim, Hanyang University, 702-2 Engineering Center, 17 Haengdang-dong, Seongdong-gu, Seoul, 133-791, Korea, Republic of, sjkim@psm.hanyang.ac.kr 1 - Optimal Scheduling of Periodic Inspection on Spatially Correlated Infrastructures Hongfei Li, IBM, 1101 Kitchawan Road, Route 134, Yorktown Heights, NY, United States of America, liho@us.ibm.com, Yada Zhu
Periodic inspection and on-condition based maintenance of infrastructures distributed over space are crucial to a citys daily operations. Conventionally reliability centered maintenance planning is either at the component level by considering them independently or requires the configuration of specific system structure. In this paper, we developed optimal inspection scheduling from system level by incorporating spatial correlations of individual components.
3 - How the Value Congruence Relates to Innovation in China? The Compensatory Roles of HRPs and POS Fang Shao, PhD Candidate, Xian Jiaotong University, School of Management, Mailbox 1875, Xian, 710049, China, xjtu-shaofang@163.com, Yun Fan
We hypothesized that human resource practices (HRPs) and perceived organizational support (POS) would each interact with P-O value congruence (PVC) in relation to organizational innovation (OI). Data from over 300 workers in China related that PVC was positively related to OI when POS was low but not related to OI when POS was high, while HRPs did not moderate the relationship. Results indicated the compensatory nature of POS for low value congruence in its relation to organizational innovation.
2 - Equivalent and Optimum Simple Step-Stress Accelerated Test Plans for the Exponential Distribution Cheng-Hung Hu, Purdue University, 3132 Courthouse Dr. E., Apt.3C, West Lafayette, IN, 47906, United States of America, hu10@purdue.edu, Bob Plante, Jen Tang
Step-Stress accelerated life test (SSALT) is used in which the stress levels are changed in steps. Our paper considers three questions when designing a SSALT. (1)Can a SSALT be designed so that being equivalent to other stress loadings? (2)Should the higher stress level be set as high as possible?(3)When optimizing a multi-step SSALT, does it degenerate to a simple one with two stress levels? The answers to these questions, under reasonable assumptions, are shown to be a qualified YES.
4 - Corporate Commitment to Sustainability: A Comparative Analysis of CSR Reporting Eunsang Yoon, Professor of Marketing, University of Massachusetts Lowell, 1 University Avenue, Lowell, MA, 01854, United States of America, eunsang_yoon@uml.edu, Steven Tello
This paper compares a content analysis methodology and a survey analysis approach to analyze the Corporate Social Responsibility (CSR) reports of globally leading corporations in an effort to evaluate the driving forces of, and the level of strategic commitment to, sustainability. Similarities and discrepancies between the outcomes of applying the two methodologies are discussed to evaluate the intention and acceptability of CSR reporting.
3 - Optimal Degradation Test Plan in a Nonlinear Random Coefficients Models with Cost Function Seong-joon Kim, Hanyang University, 702-2 Engineering Center, 17 Haengdang-dong, Seongdong-gu, Seoul, 133-791, Korea, Republic of, sjkim@psm.hanyang.ac.kr, Suk Joo Bae
One goal of reliability assessment is to predict the products lifetime accurately in time. In this case, degradation tests can be effective alternative when measurement of deteriorate of performance is available and life testing is impossible to be adopted. In this paper, we propose a cost-effective optimal degradation test plan in the context of nonlinear random-coefficients model while meeting precision constraints for failure-time distribution derived from the modeling of degradation paths.
WC47
Applications of Location Routing Problems

Chair: Shirley Rong Li, PhD Candidate, The University of Alabama, 803, 12th Avenue, RM 10, Tuscaloosa, AL, 35401, United States of America, rli4@crimson.ua.edu 1 - Analysis of a Complex Location Routing Problem Stephen Hill, Assistant Professor, Weber State University, 3802 University Circle, Ogden, UT, 84408-3802, United States of America, stephenhill@weber.edu, John Mittenthal
In this work we consider a complex product distribution problem that features facility location decisions. This problem is inspired by a real-world problem instance faced by a magazine publisher located in the southeastern United States. We present a heuristic solution approach and demonstrate the effectiveness of the heuristic via a set of computational experiments. Opportunities for future work are identified and discussed.
4 - A Short Term Planning Model for Inspection Effort Allocation in Port-of-entry Environment Liangjie Xue, Arizona State University, 699 S. Mill Avenue, Tempe, AZ, 85281, United States of America, ljxue@asu.edu, J. Rene Villalobos
The inspection resources at Port-of-Entries (POEs) are scarce. Further, there are usually different conflicting objectives involved when making inspection plans, such as minimizing costs related to inspection, minimizing waiting time, and etc. This study develops a multi-objective optimization model based decision support system to generate inspection strategies. The model takes advantage of available information related the units and balances the waiting time and costs related to inspections.
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2 - Minimizing Redeployment in Ambulance Location Models Cem Saydam, Professor, UNC Charlotte, 9201 Univ City Blvd., Charlotte, NC, 28223, United States of America, saydam@uncc.edu, Hari Rajagopalan, Elizabeth Sharer, Kay Lawrimore
Demand for ambulances fluctuates spatially and temporally. Recent advances in computing enabled EMS managers to practice dynamic redeployment plans. In this paper we address the issue of redeployment and minimal fleet sizes by explicitly considering the number of redeployment trips to be made while meeting the coverage requirements and develop fast heuristics.
Corporate-level Organizational Issues

Contributed Session
Chair: Fang Shao, PhD Candidate, Xian Jiaotong University, School of Management, Mailbox 1875, Xian, 710049, China, xjtu-shaofang@163.com 1 - Organizational Constraints to Adaptation Brian Wu, University of Michigan, Ross School, Ann Arbor, MI, United States of America, wux@bus.umich.edu, Vikas Aggarwal
We examine the role of internal interdependence in influencing firm-level adaptation ability following an industry shock. Our setting is the U.S. defense industry from 1996-2006. We find that product-level interdependence can impede adaptation; customer-level interdependence, however, can reduce this disadvantage, with post-shock benefits arising from the ability to reposition old products for new customers. The locus of coordination can thus help explain post-shock adaptation ability.
3 - Bi-criteria Dynamic Location-Routing Problem for Patrol Coverage Shirley Rong Li, PhD Candidate, The University of Alabama, 803, 12th Avenue, RM 10, Tuscaloosa, AL, 35401, United States of America, rli4@crimson.ua.edu, Burcu Keskin
This paper addresses a multi-period dynamic location-routing problem. Specifically, we design patrol routes for a fixed number of state trooper cars. The routes start from a subset of given potential stations (PS) and cover critical locations with high crash frequencies. Furthermore, the selected PS may change from one period to the other. The objective is to maximize coverage benefit while minimizing costs. For this problem, we develop a MILP, solve it using heuristics, and provide insights.
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4 - Energy Consumption Efficiency in Multimodal Transportation Networks Lili Du, Research Associate, NEXTRANS, Purdue University, 3000 Kent Avenue, West Lafayette, IN, United States of America, ldu@purdue.edu, Srinivas Peeta, Dengfeng Sun, Peng Wei
This study proposes a bi-level mathematical model to optimize the operation of a multimodal transportation network by enhancing the system energy consumption efficiency. It captures the interactions between the multimodal transportation network (supply) and intermodal trips (demand). A customized branch-and-bound solution methodology and the sensitivity analysis for the key factors are discussed.
4 - Near-optimal Heuristics and Managerial Insights for the Storage Constrained, Inbound Inventory Routing Malini Natarajarathinam, Assistant Professor, Texas A&M University, 3367 TAMU, College Station, TX, 77843, United States of America, malini@entc.tamu.edu, Jennifer Stacey, Charles Sox
We develop efficient heuristics for determining the route design and inventory management of inbound parts which are delivered for manufacturing, assembly, or distribution operations that have limited storage space for these parts. The shipment frequencies and quantities are coordinated with the available storage space and the vehicle capacities.
5 - Hybrid Heuristic Algorithm for the Capacitated Multi-Echelon Shipping Network Scheduling Problem with Delivery Deadlines Gang(Gabriel) Wang, Rutgers, The State University of New Jersey, 1 Washington Park, Newark, NJ, 07102, United States of America, gangwang@pegasus.rutgers.edu, Lei Lei
We study the problem of scheduling a capacitated supply chain network with delivery deadlines. This problem is computationally difficult since it contains generalized assignment problem as a sub problem. We introduce a hybrid heuristic algorithm based on first-fit decreasing, our proposed special case and LP relaxation. This heuristics allows us to avoid dealing with the generalized knapsack problem directly. Empirical observations from over 500 randomly generated test cases are also reported.
WC49
Joint Session Simulation/MSOM: Operations Applications of Simulation

Sponsor: Simulation/Manufacturing & Service Oper Mgmt Sponsored Session
Chair: Bahar Biller, Professor, Carnegie Mellon University, 5000 Forbes Avenue, Posner Hall 360, Pittsburgh, PA, 15213, United States of America, billerb@andrew.cmu.edu Co-Chair: Alp Akcay, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, aakcay@andrew.cmu.edu 1 - Contract Complexity and Performance under Asymmetric Demand Information: An Experimental Evaluation Feryal Erhun, Stanford University, MS&E, Stanford, CA, United States of America, feryal.erhun@stanford.edu, Kay-Yut Chen, Basak Kalkanci
Exploring the tension between theory and practice regarding complexity and performance in contract design is especially relevant. The goal of this paper is to understand why simpler contracts may commonly be preferred in practice despite being theoretically suboptimal. We use simulations and the EWA model to characterize contract decisions and profits. We perform a sensitivity analysis on the parameters of the EWA model to understand potential decision biases and deviations from theory.
WC48
Topics in Transportation
Chair: ManWo Ng, Assistant Professor, Old Dominion University, 1318 Engineering and Computational, Sciences Building, Norfolk, United States of America, mng@odu.edu Chair: Lili Du, Research Associate, NEXTRANS,Purdue University, 3000 Kent Avenue, West Lafayette, IN, United States of America, ldu@purdue.edu 1 - Information Impacts on Travelers Route Choice Behavior in a Congested Risky Network Song Gao, Assistant Professor, University of Massachusetts Amherst, 130 Natural Resources Road, 214C Marston Hall, Amherst, MA, 01003, United States of America, songgao@ecs.umass.edu, Xuan Lu, Eran Ben-Alia
The paper presents laboratory interactive experiments, where in each session, 16 subjects make repeated route choices in a hypothetical network subject to random capacity reductions. There are two scenarios, one with real-time information and the other without. Non-parametric statistical tests are conducted comparing route shares, network travel time and route switches between the two scenarios. A reinforcement learning model is developed to capture subjects route choice characteristics.
2 - Complex Event Modeling Simulation and Analysis for Critical Infrastructure Disruptions Julie Waters, Section Chief for Advanced Risk Concepts, Office of Risk Management and Analysis, U.S. Department of Homeland Security, 245 Murray Lane SW, Washington, DC, 20528, United States of America, julie.waters@dhs.gov, Nabil Adam
Disruptions to critical infrastructure can cause cascading effects across interdependent systems. This presentation describes ongoing research at the U.S. DHS to provide fast analysis to National leaders of the impacts of multiple, concurrent infrastructure disruptions. Semantic-based dynamic composition of simulations using service-oriented architecture allows for dynamic quality of service and can be applied to any mission area where complex chains of simulations are required.
2 - Modeling the Car-Truck Interaction in a System Optimal Dynamic Traffic Assignment Model Rodrigo Mesa Arango, Purdue University, 550 Stadium Mall Drive, West Lafayette, IN, 47907, United States of America, rmesaa@gmail.com, Satish Ukkusuri
In this paper we propose a formulation to model car-truck interactions in a System Optimal Dynamic Traffic Assignment using Linear Programming. Traffic flow is simulated using a Cell Transmission Model. The formulation is based on assumptions related with the kinematic characteristics of these flows and their interactions. We present numerical results supporting our modeling assumptions.
3 - Designing Simulation Inputs to be Informative Probes Thomas Reed Willemain, Professor, Rensselaer Polytechnic Institute, Industrial & Systems Engineering, Troy, NY, 12180, United States of America, willet@rpi.edu
Simulationists typically regard inputs as merely anonymous random stimuli. More can be learned by viewing them as probes to discover how to manage operations and to learn more about the advantages of competing system designs. Using small queueing examples, we will illustrate (1) creation of input sequences that produce the best and worst system performance for a single system and (2) mapping of the regions in an input space that favor one or the other of competing designs.
3 - Sustainable Public Transportation Systems Maximilian M. Etschmaier, GME International Corporation, 2702 Berryland, Oakton, VA, 221124, United States of America, etschmaier@cox.net
This paper argues that the key to sustainability of public transportation systems is in the sustainment of the asset base. It will show that an approach that emanated from airlines many years ago, combined with object-based modeling, has been used to develop a new quantitative model that can lead to sustainable public transportation. Using object-based programming, this model is directly translated into systems for simulating, optimizing, and controlling public transportation systems, including airlines, public transit, and railroads.
4 - Inventory-target Estimation with Intermittent Demand Data of Limited Length Alp Akcay, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, aakcay@andrew.cmu.edu, Sridhar Tayur, Bahar Biller
Assuming an intermittent demand process represented by the highly flexible Johnson translation system, we consider a repeated newsvendor setting and study the problem of estimating an inventory target from limited historical demand data. We investigate the impact of correlation between nonzero demand size and the number of preceding zero-demand periods on the inventory-target estimation and propose a simulation-based estimation-optimization approach to solve the problem.
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Applied Data Mining

Contributed Session
Chair: ZhiLong Chen, Xiamen University, Department of Management Science, Room 409, Building 13, Xiamen, 361005, China, czl_8802@163.com 1 - Food Security in a Changing Climate Seth Guikema, Assistant Professor, Johns Hopkins University, 3400 N. Charles St., Ames Hall, Baltimore, MD, 21218, United States of America, sguikema@jhu.edu, Stefanie Falconi, Ben Zaitchik
In this paper we analyze food security, defined as calorie deficit below a UNdefined minimum caloric intake, at the country level. What influences food security? What are the roles of climate and trade in determining food security? How might food security change in the future in response to climate change? We approach this problem with regression and data mining, evaluating both the fit and out of sample predictive accuracy of our models.
Decision Support in the Petroleum Industry and General Transportation

Chair: Mikael Rnnqvist, Professor, NHH, Helleveien 30, Bergen, NO-5045, Norway, Mikael.Ronnqvist@nhh.no 1 - Robust Planning of Production, Inventory and Ship Loading at Refineries Jens Bengtsson, Norwegian School of Economics and Business Administration, Helleveien 30, Bergen, 5045, Norway, jens.bengtsson@nhh.no, Patrik Flisberg, Mikael Rnnqvist
We present an industrial case where ships/tankers are loaded with products (blend of components from refinery operations) and where the planning problem also include production and blending operations. All operations should be integrated as e.g. late arrival of tankers may overflow component tank capacities and hence reduce or stop refinery operations. We apply a robust optimization model and solution approach to establish efficient operational plans.
2 - Output Analysis of Supply Chain n/w Design by Linear & Nonlinear Dimensionality Reduction Techniques Akanksha Saxena, International Institute of Information Technology, 26/C Electronics City, Hosur Road, Bangalore, 560100, India, akanksha.saxena@iiitb.net, Peravali Nagadeepthi, G.N. Srinivasa Prasanna
Dimensionality Reduction is a well known problem. Our aim is to reduce the dimensions of Supply Chain Management system Output which is multidimensional data by adapting Linear (Principle Component Analysis) and Non Linear (Isometric Feature Mapping) Pattern Recognition algorithms. This paper will present our Simulation Results.
2 - Inventory Management of Spare Parts in an Energy Company Mario Guajardo, PhD-student, Norwegian School of Economics and Business Administration, Helleveien 30, Bergen, NO-5045, Norway, mario.guajardo@nhh.no, Jens Bengtsson, Mikael Rnnqvist
We present a case study of inventory management of spare parts in a large supplier of oil and gas. Inventory of spare parts is held to assist the repair and replacement of equipments. The inventory includes a large number of items stored in several on-shore and off-shore locations. The demand for these items is uncertain. We study how to determine inventory levels for each spare part and analyze the potential in how risk pooling between the inventory locations can be implemented.
3 - Churn Prediction Using Bayesian Ensemble in Telecommunications Market Namhyoung Kim, POSTECH, Informatics Lab. POSTECH, San 31, Hyoja-dong, Nam-gu, Pohang, Korea, Republic of, skagud@postech.ac.kr, Jaewook Lee
Churn prediction becomes a major issue of telecommunications market. In this study, we consider the customer data which are large-scaled and highly imbalanced and the two class of data highly overlap each other. To overcome this problem, we propose a novel principled Bayesian ensemble model and provide generative process based on variational analysis. The results show significantly better performance than the existing methods providing an important predictive property of the generative models.
3 - Decoupled and Integrated Planning Models for Divergent Supply Chain in an Oil Company Martin Kylinger, PhD-student, Linkping University, 581 83, Linkping, 581 83, Sweden, martin.kylinger@liu.se, Mario Guajardo, Mikael Rnnqvist
We study an oil company with a divergent supply chain. The planning is decoupled into two separate problems. The first is concerned with sales and maximizing profit and the second is with planning production, transportation and inventory to minimize cost. In the real case an internal price system attempts to coordinate the solution of the two problems. We propose and discuss models for decoupled and integrated approaches, and show how they can be used to achieve a more efficient planning.
4 - Market Share Forecasting for Technology Products with Mixed Bayesian Networks Amit Shinde, Arizona State University, 1249, E Spence Avenue, Apt 238, Tempe, AZ, 85281, United States of America, amit.shinde@asu.edu, Lei Liu, Mani Janakiram, George Runger
Price-demand relationships and related demand forecasting are important elements in supply chain management. A Bayesian network structure is developed to handle multiple competitive products that integrates and extends more traditional models. The short life cycle information of the technology products is incorporated into the model. Experiments on representative, simulated data illustrate the advantages of the approach.
4 - Route Selection in Advanced GIS Mikael Rnnqvist, Professor, NHH, Helleveien 30, Bergen, NO-5045, Norway, Mikael.Ronnqvist@nhh.no, Patrik Flisberg, Bertil Liden, Jan Selander
Contracts between transporters and companies are often based on the driven distance. However, this distance can be hard to agree on because of many attributes e.g. length, quality, width, speed limits etc. We present an approach to find optimal weights for more than 30 attributes. We use a large number of detailed ideal routes. Then an inverse optimization model is formulated where the main variables are the weights on attributes. Results from a large countrywide implementation are reported.
5 - Model of Market Segmentation for the Gas Station Convenience Store Based on Cluster Analysis ZhiLong Chen, Xiamen University, Department of Management Science, Room 409, Building 13, Xiamen, 361005, China, czl_8802@163.com, ShuiHua Han
The gas station convenience stores have extensive distribution and high consumer mobility, which made us not available to carry on the market segmentation through the geography or demography. Therefore, this thesis proposes a market segmentation model based on cluster analysis. The proposed model facilitates the identification of stores based on category role, which can be measured with the variables from the sales database. Finally the article exploits the clustering method to verify the model.
5 - Biorefinery Location and Intermodal Transportation Planning Leila Hajibabai, University of Illinois Urbana-Champaign, Department Civi & Enviromental Engineering, Urbana, IL, 61801, United States of America, hajibab1@illinois.edu, Yanfeng Ouyang
The objective of this paper is to minimize the total cost of biorefinery construction, transportation operations including the public travel and biomass/biofuel intermodal shipments, and capacity expansion for highway links and railroad segments. To solve this optimization problem, a genetic algorithm with embedded Lagrangian relaxation and traffic assignment is developed, and an empirical case study with realistic biomass/biofuel production data for the state of Illinois is applied.
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Mathematical Modeling and Data Mining

Chair: Li Zhang, Sr. Credit & Portfolio Manager, Royal Bank of Scotland, 1000 Lafayette Blvd., Bridgeport, CT, 06604, United States of America, lieezhang@gmail.com Co-Chair: Changjian Huang, UBS AG, 399 Main Avenue, Apt 614, Norwalk, United States of America, cjjhuang@gmail.com 1 - Survival to Default Modelling with Unobserved Heterogeneity Jonathan Crook, Professor, Credit Research Centre, Business School, University of Edinburgh, 29 Buccleuch Place, Edinburgh, EH8 9JY, United Kingdom, j.crook@ed.ac.uk, Mindy Leow, Tony Bellotti
We estimate hazard functions for default incorporating unexplained heterogeneity using a sample of credit card accounts. It is well known that, theoretically, the omission of a frailty term biases the baseline hazard function and the estimated parameters relating to covariates in such a model. We assess any improvement in predictive accuracy by comparing the accuracy of models which include unobserved heterogeneity with models that do not. We will also note limitations of this approach.
Processes in Health Care

Contributed Session
Chair: Brendan Bettinger, Northeastern University, 360 Huntington Avenue, Boston, MA, 02115, United States of America, bettinger.b@neu.edu 1 - Data Standards Adoption in Recall and Outdate Management of a Healthcare Provider Paiman Farrokhvar, Graduate Research Assistant, University of Arkansas, 4207 Bell Engineering Center, University of Arkansas, Fayetteville, AR, 72701, United States of America, pfarrokh@uark.edu, Nebil Buyurgan, Raja Jayaraman, Ronald Rardin, Vijith Malayil Varghese, Angelica Burbano, Eghbal Rashidi
In this presentation we investigate the impact of data standards on recall and outdate management in healthcare supply chain. Simulation models are developed for various scenarios to compare the performance of different recall and outdate management policies, and to suggest the best practices.
2 - Kernel-Based Longstaff-Schwartz Pricing Methodology for American Options and Other Derivatives Changjian Huang, UBS AG, 399 Main Avenue, Apt 614, Norwalk, United States of America, cjjhuang@gmail.com, Li Zhang
Longstaff-Schwartz method has proven to be an effective method for pricing American options. However, the type and number of basis function need to be selected properly to achieve good prediction accuracy. In this presentation, we propose a novel kernel-based machine learning along with Monte Carlo simulation methodology to avoid the selection of basis function. Additionally, kernel-based learning can be naturally extended to pricing assets with multiple underlying factors.
2 - Investigating Causes of Lab Order Cancellations Using Data Mining Kalyan Pasupathy, University of Missouri, CE732 CS&E Building, Five Hospital Drive, Columbia, MO, 65212, United States of America, pasupathyk@missouri.edu, Zeyana Hamid
Hospital lab orders have high rates of cancellations. These cancellations lead to wasted time and effort. Exploring causes of these cancellations can help to improve efficiency and may also provide insights to improve safety. This research uses data mining to investigate the causes for cancellation of more than 15 thousand orders based on attributes, including person ordering, type of order, patient location, specialty, person cancelling, time elapsed before cancellation, and cancel reason.
3 - Estimating Clearing Functions from Simulation Data Using Regression and Search Approaches Necip Kacar, PhD Student, North Carolina Satate University, Industrial & Systems Engineering, 400 Daniels Hall College of Engineering, Raleigh, NC, 27695, United States of America, nbkacar@ncsu.edu
We examine the problem of estimating clearing functions that relate the expected output of a production resource as a function of its expected workload from empirical data obtained from a simulation model. We compare several different regression approaches to an iterative optimization-based approach and report computational results.
3 - The Volunteers Dilemma in the Provision of Health Care Brendan Bettinger, Northeastern University, 360 Huntington Avenue, Boston, MA, 02115, United States of America, bettinger.b@neu.edu, James Benneyan
Healthcare coalitions and coordination across organizations are subject to the volunteers dilemma described in game theory. Each participant benefits when maximum care is provided, but also would prefer others assume more of the responsibility. The rate of failure to provide sufficient care depends on the number of partners, diffusion of responsibility, and degree of coordination. We develop probabilistic models to describe these dynamics and explore conditions affecting care provision failure.
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Airline Scheduling and Fleet Assignment

Chair: Mourad Boudia, Amadeus, Sophia Antipolis, France, mourad.boudia@amadeus.com 1 - A Simulation-optimization Model for the Problem of Scheduling Fractional Ownership Jets Claudio Cunha, University of So Paulo, Escola Politecnica, So Paulo, Brazil, cbcunha@usp.br, Juliana Lopes
We describe a spreadsheet-based model that integrates simulation and optimization for the scheduling of fractional ownership aircrafts. It aims to be used as a strategic planning tool that helps new companies to estimate the required fleet size, the amount of deadhead flight legs, as well as to evaluate the impacts of alternative locations for operational bases.
Joint Session Analytics/CPMS: Panel Dicsussion on Educating Analytics Practitioners: M.S. Degrees in Analytics
Chair: Michael Gorman, Professor, University of Dayton, School of Business, 2130, 300 College Park, Dayton, OH, 45469, United States of America, Michael.gorman@udayton.edu 1 - New Educating Analytics Practioners: M.S. Degrees in Analytics MOderator: Michael Rappa, Director and Distinguished University Professor of Computer Science, North Carolina State University, Raleigh, NC, United States of America, michael_rappa@ncsu.edu, Panelists: Kenneth Gilbert, Diego Klabjan, Helmut Schneider
This panel brings together program leaders from four universities to discuss the emergence of Master of Science degrees in the field of Analytics. The panel will highlight educational goals, curricula, skill sets and learning strategies for achieving successful student outcomes for analytics practitioners.
2 - Airline Rescheduling with Controllable Cruise Times Sinan Grel, Middle East Technical University, Industrial Engineering Department, Dumlupinar Bulv. No:1, Ankara, 06800, Turkey, sgurel@ie.metu.edu.tr, Alper Atamtrk, M. Selim Aktrk
Airline operations are subject to frequent disruptions such as unexpected aircraft maintenance requirements or undesirable weather conditions. We consider delays caused by such disruptions and formulate a rescheduling problem that involves swapping aircraft and adjusting cruise stage speed. We give a conic quadratic MIP formulation for the problem of minimizing rescheduling cost, which is the sum of delay, fuel, carbon, passenger, and deadhead costs of the repaired schedule.
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3 - A Novel Approach for Schedule Planning and Fleet Assignment Mourad Boudia, Amadeus, Sophia Antipolis, France, mourad.boudia@amadeus.com, Semi Gabteni, Rodrigo Acuna Agost
Schedule Planning is key to Airline profitability, deciding which markets are served, with which frequency. Additionally, Capacity assignment decisions are required for all flight legs, by solving the so called Fleet Assignment Problem. This talk addresses the question of the schedule quality indicators, with a focus on fleet assignment robustness, and proposes a novel approach based on demand clustering to better deal with demand forecast volatility.
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Management of Technological Innovation in the Service Sector

Chair: Tugrul Daim, Portland State University, P.O. Box 751, Portland, OR, United States of America, tugrul@etm.pdx.edu 1 - Measuring Dynamic Efficiency of Technology Licensing of U.S. Research Institutions Using Time-Lag Factored Data Jisun Kim, Portland State University, Portland, OR, United States of America, jisunk@pdx.edu, Tugrul Daim, Timothy Anderson
This study evaluates efficiencies and their changes of technology licensing practices of 46 U.S. research institutions using licensing data of the association of university technology manager (AUTM) survey from 1991 to 2007. Data envelopment analysis and Malmquist Index are well-known methods evaluating relative performance of service organizations where widely recognized standard evaluation structures do not exist. However, while Malmquist Index provides insight efficiency changes from one period to the following period, it has limitations of non-circularity and infeasibility. Therefore, this study reviews and compares the current approaches addressing these issues and adopts them to evaluate efficiency changes of licensing practices. Also, time-lag effects of the licensing variables are examined based on the findings form authors previous study and applies time-lag incorporated licensing data to the evaluation. The result presents dynamic changes and changing patterns of licensing performance.
4 - Competition and Pricing in Airline Scheduling Luis Cadarso, PhD Student, Universidad Politcnica de Madrid, E.T.S. Ingenieros Aeronuticos, Plaza Cardenal Cisneros, 3, Madrid, 28040, Spain, luis.cadarso@upm.es, Marn ngel
The airline schedule design and fleet assignment problems consist of determining departure times and fleet type for each flight. Up to now, they have been solved sequentially. A new approach is proposed accounting for competition and pricing strategies, providing robust itineraries for connecting passengers. We use Taylors series approach to the non-linear functions. An application of the model for a simplified IBERIAs network is shown.
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Disaster Relief Planning and Operations I

Sponsor: Military Applications Society Sponsored Session
Chair: Xiaofeng Nie, Assistant Professor, Nanyang Technological University, 50 Nanyang Avenue, Singapore, Singapore, xiaofengnie@ntu.edu.sg Co-Chair: Raha Akhavan-Tabatabaei, Assistant Professor, Universidad de los Andes, Cra 1 Este # 19A-40, Bogota, Colombia, r.akhavan@uniandes.edu.co 1 - Earthquake Relief Operations Management for City of Bogota Raha Akhavan-Tabatabaei, Assistant Professor, Universidad de los Andes, Cra 1 Este # 19A-40, Bogota, Colombia, r.akhavan@uniandes.edu.co, Javier Rios, Ridley Santiago Morales
We propose a simulation model to assess the amount of auxiliary medical resources required in case of a 6.2 magnitude earthquake in the city of Bogota. Using an optimization approach we then find the optimal location for the temporary medical facilities subject to area and accessibility constraints. The results are used by Bogotas Mayors Office for disaster planning and preparedness.
2 - Technology Roadmap Development Process (TRDP) for the Health Care Service Sector through Integration of Expert Judgment, Bibliometrics and Patent Analysis Hilary Martin, Intel Corporation, United States of America, hilary.t.martin@intel.com, Fredy Gomez, Joseph Cho, Tugrul Daim
This paper integrates data mining and hierarchical decision modeling tools to generate a technology roadmap. The process is applied on a product that has a feature enabling remote monitoring for patients. Data is collected from an international company and mapped to demonstrate the process.
3 - Examining Health Information Technology Implementations Using Capabilities Nima Behkami, Oregon Health & Science University, Portland, OR, United States of America, behkamin@ohsu.edu, Tugrul Daim, David Dorr, David Raffo
U.S. healthcare industry is the largest delivery system in the world. The system is facing significant pressures to transform. Use of health information technology can assist by reducing cost and increasing quality of patient care. However characteristics of adopters and quality of implementations are not well understood and are an ongoing challenge. This paper presents a conceptual model to measure prevalence of health information technology capabilities and their impact on delivery of care.
2 - Logistics Network Design for Large-scale Emergency Relief Yepeng Sun, Ph.D candidate, University of Louisville, 789 Eastern PKWY APT 4, Louisville, KY, 40217, United States of America, y0sun010@louisville.edu, Gerald Evans, Sunderesh Heragu
To build a logistics network for large-scale emergency relief, mathematical models and the relevant algorithms are developed as a large-scale emergency preparedness planning tool to determine the location of warehouses and the assignments between warehouses and demand points, the number of different types of trucks and the routing of trucks. The objective is to minimize the total cost as well as assuring that the relief materials can be delivered to demand points within a limited duration.
4 - Decision Making Process for Offshore Outsourcing for IT Services Rosine Hann, Portland State University, Portland, OR, United States of America, rosine@pdx.edu, Tugrul Daim, David Raffo
Western countries information technology and software intensive firms are increasingly producing software and IT services in developing countries. Regardless of the swift advancement of offshore outsourcing, there are array of risks that must be investigated in order for companies to benefit from the offshore outsourcing business model. Numerous significant benefits can be accomplished through the successful management of offshore outsourcing. Several studies presented frameworks that focus on guiding decision makers and information systems managers in performing offshore outsourcing. Yet, none of these frameworks provided a systematic, methodical direction concerning how to implement the entire process of offshore outsourcing for information technology services projects. This paper presents a conceptual framework to investigate offshore outsourcing in the IT services companies in terms of: 1) overall offshore outsourcing process, 2) client - supplier relationship management process and 3) risk management process.
3 - A Scenario-based Three-Stage Stochastic Programming Model for Triage Center Location in Disasters Xiaofeng Nie, Assistant Professor, Nanyang Technological University, 50 Nanyang Avenue, Singapore, Singapore, xiaofengnie@ntu.edu.sg, Aakil Caunhye
Triage centers are used to assign priorities to disaster casualties. To our knowledge, location of these centers has not been studied in the literature. We build a scenario-based three-stage stochastic programming model for triage center location, taking into account information flow phases and uncertainties of disaster situations. A Benders decomposition-based method is proposed to accelerate solution times.
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2 - A Quantitative Analysis of Railway Timetable Robustness Emma Andersson, PhD Student, Linkping University, Bredgatan 33, Norrkping, 602 21, Sweden, emma.andersson@liu.se, Johanna Trnquist Krasemann, Anders Peterson
Robustness in railway timetables often refers to the ability to cope with smaller disturbances, which is important in dense traffic. It can be defined and measured in many ways. Previous empirical studies of the Swedish railway traffic show that the punctuality of different trains differs significantly despite similar prerequisites. We are therefore performing an in-depth analysis of quantitative measures to capture the characteristics of robust train slots that leads to high punctuality.
Approximation Algorithm and Online Learning in Optimization

Sponsor: Optimization/Linear Programming and Complementarity Sponsored Session
Chair: Rui Yang, University of Illinois at Urbana-Champaign, 117 Transportation Building, 104 S. Mathews Ave., Urbana, IL, 61801, United States of America, ruiyang1@illinois.edu 1 - Online Lot-Sizing Problems with Revenues and Ordering, Holding and Shortage Costs Michael R. Wagner, Assistant Professor, Saint Marys College of California, 380 Moraga Road, Moraga, CA, 94556, United States of America, mrw2@stmarys-ca.edu
We study inventory management problems where demands are revealed incrementally and procurement decisions must be made before the demands are realized. There are no probabilistic distributions nor nontrivial bounds to characterize demands. Our objective is to maximize the worst-case profit, where unit revenues and all unit costs are period dependent. These problems are analyzed by utilizing linear-fractional programming and duality theory.
3 - A Solution Approach for Multiple Part-Type Scheduling in Robotic Cells G. Didem Batur, Gazi Universitesi Muhendislik Fakultesi Endustri Muhendisligi, Bolumu Kat:8 Oda:804, 06570 Maltepe/ANKARA, dbatur@gazi.edu.tr, Serpil Erol
We focus on the scheduling problem arising in two-machine manufacturing cells in which a set of multiple part-types are repeatedly produced, and the part movements are performed by the help of a robot. For highly flexible CNC machines, it is possible to handle all of the necessary operations of a part by any one of these machines. Besides, the processing times can be adjusted. Cycle time of the cell depends on the robot move sequence as well as the part assignments and processing times of the parts on the machines. As a result, we try to find the robot move cycle, the part sequence and the allocated processing times of the parts on each machine that jointly minimize the cycle time. A simulated annealing based algorithm is proposed in order to solve the problem of determining the best cycle in a two-machine cell. Experimental results show that this approach works well and can be extended for further cases.
2 - A Matrix-Free Approach for Gaussian Process Maximum Likelihood Calculations Jie Chen, Argonne National Laboratory, 9700 S. Cass Avenue, Argonne, IL, United States of America, jiechen@mcs.anl.gov, Mihai Anitescu
Gaussian processes Maximum Likelihood is limited by its need to use the Cholesky factorization in the computation of the likelihood. In this work, we present a stochastic programming reformulation with convergence estimates for computing the solution of the maximum likelihood problem involving Gaussian processes. For each of the examples presented, we demonstrate that the approach scales linearly with an increase in the number of data sites.
4 - A Continuous-Approximation Model to Optimize Common Stations Density for Skip-stop Operations Ricardo Giesen, Assistant Professor, Universidad Cato lica de Chile, Vicuna Mackenna 4860, Macul, Santiago, Chile, giesen@ing.puc.cl, Maxime Freyss, Juan Carlos Munoz
The skip-stop strategy allows a rail-transit line operating on a single one-way track to increase its frequency and decrease passenger travel times. A key decision in the design of this strategy is the selection of common stations. We developed a continuous approximation approach model, which allows us to obtain an analytical expression for the optimal density of common stations and their location, depending on demand and other line characteristics.
3 - Online Stochastic Matching Problem Xin Lu, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, luxin@mit.edu, Patrick Jaillet
We study an online stochastic bipartite matching problem motivated by Internet display advertisement applications. Advertisers are interested in various impressions of different types. Impressions arrive online and types are drawn independently from known distributions. We propose two online algorithms with improved competitive ratios under such assumptions. We then discuss generalizations to weighted stochastic matching and b-matching problems.
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4 - Interactive Diffusions and Congestion Games Alfredo Garcia, Associate Professor, University of Virginia, Department of Systems & Information Engineerin, University of Virginia, Charlottesville, VA, 22904, United States of America, agarcia@virginia.edu, Yue Sun
We analyze a congestion game in which players actions sets are a continuum. We show that an interactive diffusion, in which each player follows an annealinglike process for selecting an action converges (weakly) to Nash equilibrium.
Energy in Buildings
Contributed Session
Chair: Zhi Zhou, Argonne National Laboratory, 9700 South Cass Avenue, Lemont, IL, 60439, United States of America, zzhou@anl.gov 1 - Energy Demand and Energy Efficiency of U.S. Commercial Buildings: An Econometric Approach Lucy Qiu, Stanford University, 64 Abrams Ct., Apt. 103, Stanford, CA, United States of America, yuemingq@gmail.com
The concern around rebound effect is an obstacle for the diffusion of energy efficient technologies. Thus evaluating the net energy savings of adopting energy efficient technologies after the rebound is important. This paper conducts empirical analysis to quantify the net energy savings of adopting energy efficient technologies in U.S. commercial buildings, with a correction of sample bias. It also contributes to the literature of finding price elasticties of energy demand in commercial sector.
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Schedules and Timetables

Contributed Session
Chair: Ricardo Giesen, Assistant Professor, Universidad Catolica de Chile, Vicuna Mackenna 4860, Macul, Santiago, Chile, giesen@ing.puc.cl 1 - Effects of Trains Running Ahead of Schedule in a Simulated Network Hans Sipil, Royal Institute of Technology (KTH), Teknikringen 72, Stockholm, SE-10044, Sweden, hans.sipila@abe.kth.se, Anders Lindfeldt
Many lines in Sweden have mixed traffic, with both passenger and freight trains operating by defined timetables. In contrast to passenger trains, freight trains can deviate significantly from their timetable by running both ahead and behind schedule. KTH uses micro simulation as a tool for analyzing railway operation. This study evaluates the effect of modeling early departing freight trains. In previous studies at KTH early departing trains have been modeled as running on time in the simulation.
2 - Decentralized Operation Strategies for Building Cluster Using Particle Swarm Optimization Mengqi Hu, Arizona State University, 699 S. Mill Avenue, Tempe, AZ, 85281, United States of America, mengqi.hu@asu.edu, Teresa Wu, Jeffery Weir
The Net-Zero building and smart grid technologies drive research moving from centralized decision on a single building to decentralized decision on building cluster which shares energy resources. In this research, we develop a Particle Swarm Optimization based decentralized decision framework which is capable for study the tradeoff among building cluster. The derived Pareto solutions enable multiple dimensions tradeoff analysis, and assist to determine pricing mechanism and power grid capacity.
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3 - Agent-Based Electricity Market Simulation with Demand Response from Commercial Buildings Zhi Zhou, Argonne National Laboratory, 9700 South Cass Avenue, Lemont, IL, 60439, United States of America, zzhou@anl.gov, Jianhui Wang, Fei Zhao, Audun Botterud
We simulate an electricity market with demand response from commercial buildings by using agent-based simulation techniques. We focus on the consumption behavior of commercial buildings with different levels of DR penetration in different market structures. The results indicate a noticeable impact from commercial buildings with price-responsive demand on the electricity market, and this impact differs with different scales of DR participation under different levels of market competitions.
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Procurement and Pricing

Contributed Session
Chair: Jenyi (Jay) Chen, Cleveland State University, 1860 E. 18th Street, Cleveland, United States of America, j.chen27@csuohio.edu 1 - Efficient Rationing and Priority Pricing: Risk Allocation of Fluctuating Resources to Varying Demand Seyed Reza Yousefi, The University of Texas at Austin, 3555 Lake Austin Dr Apt D, AUSTIN, TX, 78703, United States of America, s.reza.y@gmail.com, Huaxia Rui, Andrew Whinston
The present study adds to the literature on designing a producers optimal allocation scheme in allotting a scarce resource in the presence of fluctuations in both demand and supply, while at the same time, customers are heterogeneous in the sensitivity towards rate of consumption. The proposed mechanism suggests that pricing schedule could be designed as contingent contracts based on priority rankings according to the customers risk aversion.
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Multiobjective Programming
Chair: Melih Ozlen, Lecturer, RMIT University, School of Mathematical and Geospatial Sc, GP.O. Box 2476V, Melbourne, 3001, Australia, melih.ozlen@rmit.edu.au 1 - Approximate Pareto Set for the Biobjective Set Covering Problem Lakmali Weerasena, PhD Student, Clemson University, O-110, Martin Hall,, Box 340975, Clemson, SC, 29634, United States of America, lweeras@clemson.edu, Margaret Wiecek
The Pareto set of a multiobjective optimization problem is approximated within a specified accuracy. Properties of this approximation are examined. Specific results are obtained for the biobjective set covering problem. An algorithm to approximate all Pareto solutions is proposed with the accuracy resulting from the problem size and data.
2 - Optimal Component Procurement Strategy in Assemble-to-Order Systems with Demand Forecast Updates James Cao, Ph.D. Student, UC Irvine, 7601 Palo Verde, Irvine, CA, 92617, United States of America, caol@uci.edu, Rick So
This paper examines the role of forecast updating in an assemble to-order environment. We consider a contract manufacturer that needs to procure the required components for a customized product. Once any component is procured, an upper bound is set on any future purchases of other components because the final product needs exactly one part of each component and there is only one ordering opportunity per supplier. Using an analytical model, we derive the optimal procurement strategies.
2 - Finding Highly Preferred Solutions for Multicriteria Integer Programs Banu Lokman, Middle East Technical University, Industrial Engineering Department, Ankara, Turkey, banutuna@ie.metu.edu.tr, Murat Koksalan
We develop an algorithm that first approximates the nondominated set with a hypersurface. It then finds a highly preferred hypothetical point on this surface interacting with the decision maker. It defines a small region around the chosen point using Tchebycheff and rectilinear distances and finds all nondominated points in this region. Computational results show that the small set of nondominated points in this region contains highly preferred solutions.
3 - Economies of Scale in Joint Procurement and Advertising Strategy for Multiple Products Mingchang Wu, Student, University of Connecticut, 2100 Hillside Road, Storrs, CT, 06269, United States of America, mingchang.wu@business.uconn.edu, Lakshman Thakur, Suresh Nair
In practice, one significant problem faced by retailers is how to coordinate inventory procurement with advertising allocation across a range of products so as to exploit economies of scale existing in advertising. This paper investigates this problem and presents an optimal joint procurement and advertising strategy for multiple products which maximizes the aggregate profit.
3 - Solving Bilevel Problem Using an Evolutionary Approach Pekka Malo, PhD, Aalto University School of Economics, Runeberginkatu 22-24, Helsinki, 00100, Finland, pekka.malo@aalto.fi, Ankur Sinha
Bilevel optimization problems are special kind of optimization problems which require every feasible upper-level solution to satisfy the optimality conditions of a lower-level optimization problem. These problems are commonly found in practice which include transportation, game-playing strategy development, coordination of multi-divisional firms, optimal control, and others. In the presentation, we discuss a practical bilevel problem and solve it using an evolutionary approach.
4 - Procurement Contract Design When Competing Buyers May Collaborate Jenyi (Jay) Chen, Cleveland State University, 1860 E. 18th Street, Cleveland, United States of America, j.chen27@csuohio.edu, Maqbool Dada, Joice Hu
When selling goods to retailers who serve the same consumer market, a manufacturer can design procurement contracts to its advantage by carefully selecting the contracting elements: multiple ordering opportunities, relative market power of retailers, and permission of retailer trade. We characterize and compare different competition models, and investigate the effect of production costs on the equilibrium strategy.
4 - Multi-objective Integer Programming: An Improved Recursive Algorithm Melih Ozlen, Lecturer, RMIT University, School of Mathematical and Geospatial Sc, GP.O. Box 2476V, Melbourne, 3001, Australia, melih.ozlen@rmit.edu.au, Benjamin A. Burton
This study introduces an improved recursive algorithm to generate the set of all nondominated objective vectors for the Multi-Objective Integer Programming problem. We significantly improve the earlier recursive algorithm of zlen and Azizoglu by using the set of already solved subproblems and their solutions to avoid solving a large number of IPs. We conduct a series of randomised computational experiments to show the amount of savings that can be obtained by this improved algorithm.
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Logistics in Action
Contributed Session
Chair: Richard Monroe, Associate Professor, East Carolina University, Department of Technology Systems, 402 Science & Tech Bldg, Greenville, NC, 27858, United States of America, monroer@ecu.edu 1 - Cross-dock Operations and Uncertainty Kanthimathi Sathasivan, Graduate Student, The University of Texas at Austin, 1 University Station C1761, Austin, TX, 78712, United States of America, kanthisatha@gmail.com, Travis Waller
As many companies choose to do cross-docking as a cost cutting measure, they are also faced with uncertainty at several levels in their cross-dock operations. This problem addresses the uncertainties that arise in the Goodwill resource center cross-dock operations which serve several Goodwill stores in the central Texas area. The formulation minimizes the cost and a robust alternative solution method is discussed together with the numerical results of the computational experiments.
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2 - The Impact of Social Communication Styles on Innovation Potential of Global Participatory Science Ozgur Ozmen, GRA, Auburn, 3301 Shelby Center, Auburn, AL, 36849, United States of America, ozo0002@auburn.edu, Levent Yilmaz, Jeffrey Smith
We call scientific knowledge creation in cyber-infrastructures Global Participatory Science. Communication preferences are posited as an important factor affecting GPS. Using agent-based modeling, we develop a complex adaptive social communication network model. Social network metrics and knowledge production patterns are used as proxy metrics to infer innovation potential. The objective is to further our understanding of GPS and facilitate developing informed policies fostering innovation.
2 - Public Logistics Information Platform Pratice in China Hongwei Ding, SCM Research Manager, IBM Research China, Diamond Building A, ZGC Software Park, Beijing, 100193, China, dinghw@cn.ibm.com, Wei Wang, Xiaoqing Wang, Hongbo Li, Jin Dong, Minmin Qiu
One major reason of the high logistics cost in China is due to the lack of scale of economy given the highly fragmented logistics industry. We developed a public logistics information platform to bring trucking companies, goods forwarders, manufacturers, 3PLs together and provide platform members with services including information sharing, supply/demand synchronization, transportation optimization, etc. Its very effective in helping small companies to grow business and reduce costs.
3 - A Logistics and Distribution Problem in a Farm-to-School Setting in Mexico Erika Murguia Blumenkranz, Consultant, TIS Consulting Group, Hermosillo, Sonora, Hermosillo, Mexico, erika.murguia@gmail.com, Octavio Sanchez Arocha, J. Rene Villalobos, Gerardo Trevino Garza, Ahumada Omar, Alejandro Sanchez Arocha
We consider a logistics and distribution problem in a farm-to-school setting in Mexico. We present results for the optimization problem and solution of the childrens diets, the optimal location of collection, food processing and distribution centers all over Mexico. The system should provide food to 21,025,391 children in elementary and middle school, divided in 135,240 schools in 2,640 cities.
3 - Fixing Process Inefficiencies Based on Pairs of Systems Factors David Hoffman, Adjunct Professor, University of Alaska Anchorage, P.O. Box 111829, Anchorage, AK, 99511, United States of America, afdbh@uaa.alaska.edu
Improving processes requires understanding the root sources of inefficiencies. Five systems factors which influence efficiency are delays, errors, variances, capacity and lack of feedback. When any two are combined they create a specific problem. For example, combining variances with capacity create dynamic limits problems. Reverse analyses lead to improvements.
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4 - Coordination in Logistics Management: How Much Information Sharing Could be Beneficial? Hossein Zolfagharinia, School of business and Economics, Wilfrid Laurier University, 75 University Avenue West, Waterloo, Ontario, N2L 3C5, Canada, Zolf1380@wlu.ca, Michael Haughton
In this study, a fairly complex network, in which suppliers, carriers and demand points are playing a role is considered. The goal of this article is to examine the value of information sharing in outsourcing of logistics activities taking demand uncertainty into account. In this regard, the proposed model is investigated under two conditions, namely full and no information sharing conditions. More than two hundred test problems in form of 48 different settings are generated to illustrate how much information sharing could be beneficial and which factors are critical in this respect. The managerial insights are provided at the end.
Simulation and Queuing in Supply Chain

Contributed Session
Chair: Jaydeep Balakrishnan, Professor, University of Calgary, Haskayne School of Business, Calgary, AB, T3A, Canada, balakris@ucalgary.ca 1 - A Queuing Model for Inventory Control in a System with Periodic Demands Sanket Bhat, University of Wisconsin-Madison, 1513 University Avenue, Madison, United States of America, sbhat2@wisc.edu, Ananth Krishnamurthy
We consider a queuing model for a production-inventory system with periodic demands. The production system is modeled as a M(t)/M/1 queue and evaluates the performance trade-offs when the system operates under a periodic base-stock policy. The model captures the effects of congestion on production inventory decisions in capacitated systems.
5 - The Current State of Intermodal Logistics: Trends and Constraints Richard Monroe, Associate Professor, East Carolina University, Department of Technology Systems, 402 Science & Tech Bldg, Greenville, NC, 27858, United States of America, monroer@ecu.edu
Containerization of raw materials, components and products facilitate the extremely long distances traveled and the multiple modes of transportation which are required in todays global supply network. Given the growth of intermodal logistics, the constraints faced by shipping firms become critical issues. This paper will present recent statistics for intermodal shipping in the U.S. and then discuss specific constraints which are impacting intermodal shipping performance and capabilities.
2 - Modeling and Design of Biopharmaceutical Production Systems Tugce Martagan, University of Wisconsin-Madison, 1513 University Avenue, Madison, United States of America, martagan@wisc.edu, Ananth Krishnamurthy
Bio-pharmaceutical production systems include complex dynamics that challenge the design of efficient production systems. The study presents analytical models to investigate the performance of upstream production processes. A queuing model is developed to analyze the trade-offs between production capacity, batch size, yield and throughput. The model incorporates the dependency between the batch size and batch failure rate, and captures the impact of various design parameters on throughput.
WC67
Systems Analysis
Contributed Session
Chair: David Hoffman, Adjunct Professor, University of Alaska Anchorage, P.O. Box 111829, Anchorage, AK, 99511, United States of America, afdbh@uaa.alaska.edu 1 - On a Simple Comparison Procedure in Analyzing Observational Data Ying Tat Leung, IBM Almaden Research Center, 650 Harry Road, San Jose, CA, 95120, United States of America, ytl@us.ibm.com, Barbara Jones
In many situations, we are interested in the impact of a single factor on the performance of a system that we can only observe. We consider a nave approach in which we perform a simple comparison of the observed system performance at different, known settings of the factor of interest. This procedure turns out to be more accurate than it appears to be.
3 - Design of a Warehouse for an Air Cargo Terminal through Discrete Simulation Carlos Osorio, Politecnico Grancolombiano, Cl 57 3 00 Este Fac. Ingeniera, Bogota, Colombia, caosorio@poli.edu.co, Oscar Parra
This paper shows the application of discrete simulation for designing the main air cargo warehouse of one of the biggest airlines in Colombia and South America. The research begins with the evaluation of the operations carried out in the warehouse; the current performance is analyzed using key logistics indicators, and prospective scenarios are then generated and evaluated. Preeliminary results are also reported.
4 - Crossdocking Operations Analysis Using Computer Simulation with Material Handling Considerations Jaydeep Balakrishnan, Professor, University of Calgary, Haskayne School of Business, Calgary, AB, T3A, Canada, balakris@ucalgary.ca, Chun-Hung Cheng, Kum Khiong Yang, Wing Shuet Wong
Crossdocking is an important distribution strategy in a supply chain management. In this work, the impact of staging in crossdocking operations is examined. Our model also considers the operations of the material handling team explicitly. Two components of processing time for the pallets can be calculated: (1) the waiting time of the pallets at the staging area (2) the processing time of the pallets by the material handling teams forklifts.
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Sustainability and Uncertainty in Competitive Supply Chains

Chair: Ekundayo Shittu, Tulane University, A.B. Freeman School of Business, New Orleans, United States of America, eshittu@tulane.edu 1 - Optimal Storage Investment for Efficient Integration of Renewable Energy with Dynamic Pricing Pavithra Harsha, IBM, 1101 Kitchawan Road, Room 34-225, Yorktown Heights, NY, United States of America, pharsha@us.ibm.com, Munther Dahleh
We address the optimal storage investment problem faced by a renewable generator the purpose of which is to support a portion of a local demand with the goal of minimizing the average cost of electric bills in the presence of dynamic pricing and storage investment. We characterize how the cost and efficiency of storage, dynamic pricing and uncertainty in generation and demand impacts the size of optimal storage and its gain and discuss experimental results on real data.
Forecasting
Contributed Session
Chair: Akkarapol Sa-ngasoongsong, Phd. Student, Oklahoma State University, 245N. University Place#301, Stillwater, OK, 74075, United States of America, akkarap@okstate.edu 1 - A Multiple Regression Forecasting Method for Short Life Cycle Products Jess A. Rodrguez-Sarasty, Pontificia Universidad Javeriana Cali, Calle 18 No. 118-250, Cali, Colombia, rodriguez@ingenieros.com, Carlos Julio Vidal Holguin
Short life cycle products are increasingly frequent in several industries. These products are characterized by a transitory, non-stationary and highly stochastic demand that cannot be adequately addressed through classical forecasting methods. We propose a multiple regression method that using sales data of similar products in previous seasons helps to forecast the demand in specific time periods. This method can be integrated into a system with multiple replenishments during the sales season.
2 - QoS-Based Capacity Modeling for Intermittent Generating Resources Xiaoyue Jiang, Assistant Professor, Tulane University, 7 McAlister Drive, New Orleans, United States of America, xjiang@tulane.edu, Geoffrey Parker, Ekundayo Shittu
We propose a network calculus (NetCal) approach to characterize the capacity of intermittent generating resources. Essentially, the power supply and demand dynamics are modeled based on deterministic queuing systems and intermittent generating resources are characterized as queuing servers whose capacity is represented as service curve. Such approach presents an alternative modeling framework under which various capacity planning and management issues can be addressed.
2 - Forecasting Practices in Food Services Industry: A Survey Amer Karim, Northwestern University, 2145 Sheridan Rd., Evanston, IL, 60208-3100, United States of America, akarim@u.northwestern.edu
A survey using a sample of 500 restaurants (excluding fast food) was conducted to provide an understanding of forecasting practices in the food service industry in a large Midwestern state. The findings are consistent with previous research. The results indicated that compared to manufacturing sector, less quantitative technique is used. Time series was the most used method. The managers used short term and medium term forecasting more frequently than long range forecasts.
3 - Generation of Correlated Probability Distributions for Future Energy Prices Rose Zdybel, University of Massachusetts Amherst, UMass/Amherst, Amherst, MA, United States of America, rozoe@msn.com, Erin Baker
We describe an approach for estimating correlated probability distributions over future energy prices, incorporating both past data and detailed forecasts. The approach we take is analogous to the decomposition method used for forecasting with seasonality. Here, however, instead of seasonality, we model general variability. We present an example using forecasts from the EIA for end-user energy prices for distillate oil, natural gas, and electricity.
3 - Forecasting Sales of Slow Moving Items Evren Tipi, Network Optimization Planning Manager, Lowes Home Improvement, 13543 Helen Benson Blvd., Davidson, NC, 28036, United States of America, evren.e.tipi@lowes.com, James R. Wilson, Russell E. King, Thom J. Hodgson
We enhance existing forecasting techniques for slow-moving items through addition of a seasonality index, a correction factor, and a modified update frequency. These new methods are shown to outperform the existing methods in terms of traditional forecast accuracy as well as inventory metrics using the sales data from one of the biggest retail companies.
4 - On Regulation and Efficient Management of Distributed Generation Systems Ekundayo Shittu, Tulane University, A.B. Freeman School of Business, New Orleans, United States of America, eshittu@tulane.edu, Geoffrey Parker, Xiaoyue Jiang
We propose a framework for the evaluation of the economic and regulatory options for grid penetration of distributed energy resources. We employ twostage stochastic programming formulation to explore the optimal scheduling of supply from intermittent sources to meet variable systemic load while satisfying operational and technological limitations. We apply this methodology to a case study to demonstrate its effectiveness under different assumptions on regulatory prescriptions.
4 - Forming Prediction Intervals for Turning Points in Economic Indices Robert Pavur, Professor, University of North Texas, Department of ITDS, 1155 Union Circle #305249, Denton, TX, 76203, United States of America, pavur@unt.edu, Youqin Pan
Consumer Sentiments Indices (CSIs), reflecting consumer confidence, are widely considered important indicators of household consumption behavior. This paper explores a methodology to provide insight into the business cycle of the CSIs by developing a methodology to forecast turning points for the index and anticipate changes in the business cycle.
5 - Nonstationary Sales Prediction Based on Hilbert-Huang Transform (HHT) Akkarapol Sa-ngasoongsong, Phd. Student, Oklahoma State University, 245N. University Place#301, Stillwater, OK, 74075, United States of America, akkarap@okstate.edu, Satish Bukkapatnam
Prediction of sales over time is crucial component of a companys planning framework. However, the sales evolution follows a nonlinear and nonstationary dynamics. In this work, we present a new approach, based on a local gaussian process (LGP) and empirical mode decomposition (EMD) for accurate prediction of automobile sales.
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2 - On Optimal Replenishment Policies under Random Lead Times and Partially Retained Demands Michael Katehakis, Professor, Rutgers University, 1 Washington Park, Newark, NJ, 07102, United States of America, mnk@rutgers.edu, Laurens Smit
We study a continuous review stochastic inventory model for a single product with random lead times and partially retained demands. We formulate the problem of computing optimal values for the reorder quantity, and the order point (Q,r). Further we introduce state aggregation which can be used to obtain efficient computational algorithms.
Promotions
Contributed Session
Chair: Salma Karray, UOIT, 2000 Simcoe Street North, Oshawa, ON, Canada, salma.karray@uoit.ca 1 - Customer Loyalty Assessment by Using Support Vector Machine Ali Dehghan, PhD Student, Eastern Michigan University, 1007 East Brooks Apt H, Norman, OK, 73071, United States of America, ali.dehghan3@gmail.com, Theodore Trafalis
Customers with a high level of satisfaction are likely to remain with their existing providers. Such loyal customers hardly switch to another service provider, in other word, they do not churn. In this paper, the applications of Support Vector Machine in assessing the Customer Loyalty are studied.
3 - Performance of the Clark-Scarf Algorithm in Multi-echelon Inventory Systems with Lost Sales Woonghee Tim Huh, Sauder School of Business, University of British Columbia, 2053 Main Mall, Vancouver, BC, V6T1Z4, Canada, tim.huh@sauder.ubc.ca, Marco Bijvank, Ganesh Janakiraman
We study a serial inventory system under periodic review when excess demand at the most downstream stage is lost. First, we show that base-stock policies are asymptotically optimal as the lost-sales penalty cost parameter grows. Next, we propose an approximation procedure to set the values of the base-stock levels with the Clark-Scarf algorithm. This procudure demonstrates excellent cost performance relative to the costs of the optimal policy with an average optimality gap of 2%.
2 - Optimal Advance Selling Strategies Using Coupons in a Monopoly Market Gang Wang, UConn Business School, 2100 Hillside Rd, Unit 1041, Storrs, CT, 06269, United States of America, gang.wang@business.uconn.edu
Lately many businesses are advance selling their products or services through some websites, like groupon.com. This new technique has the features of both advance selling and coupon promotion. We build the advance selling model and explore the effect of these coupons on consumer behavior and the sellers profits. We find the condition of marginal cost where the seller makes profit from coupons. We also suggest the optimal advance selling strategies in terms of optimal prices and coupon duration.
4 - Estimation of Disequilibrium Models under Unobserved Demand Backlogging Burcu Aydin, Research Scientist, HP Labs, 1501 Page Mill Rd. MS 1040, Palo Alto, CA, 93304, United States of America, aydin@hp.com, Mehmet Sayal, Enis Kayis, Kemal Guler
One of the core concepts in Collaborative Inventory Management is the management of inventory levels according to the forecasted demand and supply of both parties. In this work we investigate a CIM model where the issued forecasts and inventory levels (supply) are available, but the actual demand information is missing. To estimate the demand we define a novel version of the Switching Model where backlogging demand from one period to the next is allowed.
3 - Promotion Strategies Using Bayesian Networks Bumsoo Kim, PhD Candidate, George Washington University, 2201 G Street, NW, Fungar Hall 415H, Washington, DC, 20006, United States of America, bk4498@gwu.edu
In spite of the ease of accessibility to grocery stores, and recent expansion in online grocery shopping, consumers still purchase multiple items over different categories of products in a single shopping trip. Furthermore, with the improvements in IT, it is now feasible for the retailers to collect market basket level data. We use Bayesian Networks to find dependence structures among multiple products and show how a retailer may formulate the most efficient promotion strategy.
WD07
C - Room 204
4 - Effectiveness of Retail Joint Promotions under Different Channel Structures Salma Karray, UOIT, 2000 Simcoe Street North, Oshawa, ON, Canada, salma.karray@uoit.ca
We investigate the effects of horizontal joint promotions (HJP) initiated by competing retailers on the supply chains strategies and profits using a game theoretic model. We find that for low levels of promotional effectiveness, HJP improves each channel members profits through demand expansion and higher margins under all channel structures. However, a highly effective HJP can only be initiated by decentralized retailers.
Queueing Theory and Applications

Contributed Session
Chair: Fang Dong, PhD Candidate, University of Michigan, 1205 Beal Avenue, Ann Arbor, MI, 48105, United States of America, ppfang@umich.edu 1 - Modeling Departure Flow in Nonstationary Markovian Tandem Networks Ira Gerhardt, Assistant Professor, Manhattan College, 4513 Manhattan College Parkway, Department of Mathematics & Computer Science, Riverdale, NY, 10471, United States of America, ira.gerhardt@manhattan.edu, Barry L. Nelson
We examine a tandem network of queueing nodes fed by a nonstationary external Markovian arrival process. We develop methods for matching downstream interarrival moments to the departure count moments from the immediate upstream node, thereby decoupling the network. We apply these matching techniques at variable time-steps, updating the parameters of the fit at each step and holding them constant until the next update.
WD03
C - Room 202A
Stockouts, Backlogging and Lost Sales

Contributed Session
Chair: Burcu Aydin, Research Scientist, HP Labs, 1501 Page Mill Rd. MS 1040, Palo Alto, CA, 93304, United States of America, aydin@hp.com 1 - Models to Assess the Impact of Demand Loss on Ordering Behavior in Multi-Period Inventory Systems James Lavin, Student, NC State University, 1321 Crab Orchard Dr, Apt #002, Raleigh, NC, 27606, United States of America, jalavin@ncsu.edu, Semra Sebnem Ahiska, Russell E. King, Don Warsing, Anita Vila-Parrish
Stock-outs may cause customers to lose faith in a retailer, potentially driving them elsewhere to meet their future demand. Previous research modeled consumer behavior by lowering future demand using a disappointment factor that dependent on the ordering policy. Instead of traditional penalty costs imposed on stock-outs, our model lowers the demand in future periods. We extend of models from the literature to include stochastic demand and flexible ordering policies.
2 - Task Release Control Policies for State-dependent Queues Ketan Savla, Research Scientist, Massachusetts Institute of Technology, 32-D716, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, ksavla@mit.edu, Emilio Frazzoli
We consider novel state-dependent queues where the server offers a statedependent service and the state evolution is governed by its utilization history. We present results on the throughput of such queues under the task release control architecture. Special attention is given to those controllers that release a new task to the server only when its current state belongs to a specific set. The results rely on the combination of tools from dynamical systems and queuing theory.
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3 - Design and Analysis of a Multi-Product Assembly Line Kamran Moghaddam, Assistant Professor of Systems Engineering, Southern Polytechnic State University, 1100 South Marietta Parkway, Marietta, GA, 30060, United States of America, kmoghadd@spsu.edu, Xu Yang
We discuss the basic steps of design and analysis of a multi-product assembly line. We define the assumption, configuration and specification of the system and develop principle criteria of the system. These criteria will be used to evaluate the performance of the base case as well as three scenarios of the system. In order to improve the performance of this system, we consider different scenarios, and then analyze and compare them based on the defined criteria and assumptions for each scenario.
WD09
4 - Random Delayed Lot-sizing Model Wei Yuan, PhD Candidate, University of South Florida, IMSE, 4202 E. Fowler Avenue,ENB118, Tampa, 33613, United States of America, weiyuan@mail.usf.edu, Bo Zeng
We consider a lot-sizing problem with random delay as well as random demand. A two stage robust optimization mode is developed and a cutting plane algorithm is implemented. Computational results will be presented using a concrete example.
4 - Dynamic Control of an N Queueing Network with Application to Shipbuilding Fang Dong, PhD Candidate, University of Michigan, 1205 Beal Avenue, Ann Arbor, MI, 48105, United States of America, ppfang@umich.edu, Mark Van Oyen, David Singer
The well-researched N network still lacks effective, computationally lightweight policies, especially with non-preemption. We use a Markov Decision Process for benchmarking and to gain structural insights into the optimal scheduling policy. We develop a state dependent threshold policy and benchmark it against other policies to show its excellent robustness and effectiveness. We thereby substantiate the potential benefits of introducing operational flexibility into shipbuilding.
5 - A Regularized Robust Optimization Approach for Portfolio Execution Somayeh Moazeni, PhD Candidate, University of Waterloo, 200 University Avenue West, Waterloo, Canada, smoazeni@math.uwaterloo.ca, Yuying Li, Thomas Coleman
Uncertainty set is a crucial component in robust optimization. However, its specification is often unclear. Here, we concern instability of the robust solution to variations in the uncertainty set for the portfolio execution cost problem. We first illustrate potential instability of the classical robust optimization to variations in the uncertainty set. We then propose a regularized robust optimization approach based on regularizing the uncertainty set. Improvement in stability is discussed.
WD09
C - Room 206A
WD08
C - Room 205
Trends in Pricing in the Transportation and Hospitality Industries

Chair: Tom Gorin, PROS Pricing, 3100 Main Street, Houston, TX, 77002, United States of America, tgorin@prospricing.com 1 - The Future of Revenue Management: An Update from 2007 Stowe Shoemaker, Division of Research - University of Houston, Houston, TX, United States of America, sshoemaker@uh.edu
In 2007 Milla and Shoemaker published a paper on the future of revenue management in the hotel industry. The paper was based on in-depth interviews with key industry executives. The focus of the discuss at INFORMS will be an updated version of this paper. Specifically, interviews will be conducted in from July 1 - November 1 with hospitality industry executives to answer the following issues: (1) how is revenue management practiced by their organization (i.e., at property level or cluster level) (2) how has the practice of revenue management changed over the last five years (3) what problems do they face implementing revenue management (4) what, if any, initiatives are they currently working on/implementing, (5) how do they see RM changing in the future, and (6) other issues that come up in the analysis.
Robust Optimization
Contributed Session
Chair: Somayeh Moazeni, PhD Candidate, University of Waterloo, 200 University Avenue West, Waterloo, Canada, smoazeni@math.uwaterloo.ca 1 - A Robust Optimization Approach for Joint Production Planning with Uncertain Demand Alejandro Lamas, PhD Student, Facults Universitaires Catholiques de Mons/Universit Catholique de Louvain, Voie du Roman Pays 34, Louvain-la-neuve, 1348, Belgium, alejandro.lamas@student.uclouvain.be, Philippe Chevalier
We address the problem of the joint production plan of two companies, where the global cost of the system is reduced by the presence of economies of scale. However, this globally optimal solution could imply disparity in the results for each company. Assuming that customer demand is uncertain, we propose a novel robust optimization approach, which goal is to find the best trade-off between a global performance and limited disparities between the results of each participant.
2 - Solving the Robust p-hub Median Problem Paul Berglund, University at Buffalo, Department of ISE, Buffalo, United States of America, berglund@buffalo.edu, Changhyun Kwon
The deterministic p-hub median problem for a transportation network is to choose p network hubs and allocate nodes to hubs so as to minimize the total cost, given known node-to-node travel costs and demand levels. A robust version of this problem is, when travel costs and/or demands fall into some uncertainty set U, to choose p hubs so as to minimize the worst case total cost over all possible elements of U. This is an NP-hard problem; a heuristic is used to find a good quality solution.
2 - Air Canada & ExPretio: Fare Families in the Air Transportation Industry Richard Cleaz-Savoyen, Revenue Analysis Manager, Air Canada, 7373 Cte Vertu Ouest, Bat 2, Zip 1252, Ville St Laurent, QC, H4S1Z3, Canada, Richard.Cleaz-Savoyen@aircanada.ca, Anne Mercier, Louis-Philippe Bigras
In 2004, Air Canada opted for more pricing transparency, introducing the concept of Fare Families: during the entire booking window, a choice set of products would be available, at fares which could vary over time. After much experimentation, this strategic decision proved successful. In partnership with ExPretio, Air Canada recently conducted in-depth customer behavior analyses based on choice models. We will present insights on demand response to the unique pricing concept of Fare Families.
3 - On Constraint Estimation for Robust Optimization in Supply Chains Abhilasha Aswal, International Institute of Information Technology, 26/C Electronics City, Bangalore, 560100, India, abhilasha.aswal@iiitb.ac.in, Ganesh Perumal, G.N. Srinivasa Prasanna
Our robust optimization approach to supply chain mgmt uses polyhedral formulation of uncertainty where the constraints correspond to the economically meaningful correlations between uncertain parameters. As part of our larger study in supply chain optimizations, we present newer work, focusing on constraint estimation which leads to a multidimensional generalization of the 1-D German Tank problem. We present a new UMVU estimator whose convergence time is polynomial in accuracy.
3 - Optimization Model for Joint Pricing and Seat Inventory Control: Multiple Products, Multiple Periods Claire Cizaire, MIT, 77 Massachusetts Avenue, Room 35-217, Cambridge, MA, 02139, United States of America, cizaire@mit.edu, Peter Belobaba
Pricing and revenue management have traditionally been considered separately, despite the fact that prices and booking limits both affect a passengers choice set. We developed deterministic and stochastic approaches to simultaneously optimize the price levels and booking limits for an airline with two fare products. The clearly defined attributes of the two fare products remain the same over the booking horizon, but the prices are allowed to vary.
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C - Room 207BC
4 - Analytics of Price Optimization Solutions Seonah Lee, Revenue Analytics, 3100 Cumberland Blvd, Suite 1000, Atlanta, GA, 30339, United States of America, slee@revenueanalytics.com
Price optimization under limited capacity problems can be formulated into a quadratic optimization problem (QP). Using the analytical properties of the optimal QP solution, we propose an alternative algorithm to the conventional quadratic optimization. In this study we apply the alternative price optimization algorithm to the hotel length of stay rate optimization problem. Initial computational study shows that the performance of the alternative algorithm is comparable to existing QP algorithms.
Stochastic Optimization in Transportation

Contributed Session
Chair: Thomas Yeung, Associate Professor, Ecole des Mines de Nantes, 4 Rue Alfred Kastler BP 20722, Nantes, 44000, France, thomas.yeung@mines-nantes.fr 1 - Stochastic Optimization in Transportation Route Design and Timetabling Bruno Flach, IBM Research - Brazil, Av Pasteur 138/146, Rio de Janeiro, Brazil, bflach@br.ibm.com, Milind Naphade, Sambit Sahu, Pavan Murali, Jing Dai, Ming Li
Providing incentives for an increased usage of public transportation lies among a vast spectrum of measures aimed at reducing GHG emissions and counteracting climate change. However, the widespread adoption of public transportation is often hindered by inefficient routes, poor synchronization, time-consuming and unreliable service. In this work, we study the problem of designing routes and defining an optimal service timetable so as to maximize the quality of service from the users viewpoint.
WD11
C - Room 207A
Analysis, Applications and Computations with Many Server Systems

Chair: Jose Blanchet, Columbia University, 500 W 120 St, New York, NY, United States of America, jose.blanchet@columbia.edu 1 - Dynamic Steady State for Many-server Queues with Deterministic Service Times Yunan Liu, Assistant Professor, Columbia University, 500 West 120th Street, New York, NY, 10027, United States of America, yl2342@columbia.edu, Ward Whitt
Considering the GI/D/s+GI model, we demonstrate the invalidity of the interchange of two limits: the steady state of the heavy-traffic (HT) limiting process does not coincide with the HT limit of the steady state of the queueing processes. The number of customers at t converges to a unique stationary distribution as t goes to infinity; on the other hand, the HT fluid sample paths reach a dynamic (periodic) steady state, provided that the system does not start in steady state.
2 - Structural Properties to Solve MDP and POMDP Models for Road Maintenance Optimization Thomas Yeung, Associate Professor, Ecole des Mines de Nantes, 4 Rue Alfred Kastler BP 20722, Nantes, 44000, France, thomas.yeung@mines-nantes.fr, Mariem Zouch, Bruno Castanier
We optimize road maintenance decisions of perfect and multiple imperfect actions with varying effects on the road state and degradation process. We use a Markov decision process and show the optimal policy is of the control limit type and each action is selected. These are used to accelerate the policy iteration algorithm and formulate a heuristic for the partially observed case. Substantial gains in computation time (70%) and objective value (15%) are shown compared to grid-based approximation.
2 - Exact Asymptotic for Infinite-server Queues Henry Lam, Assistant Professor of Statistics, Boston University, 111 Cummington Street, Allston, MA, 02134, United States of America, khhlam@gmail.com
We derive an exact asymptotic, up to a constant factor, for the tail probability of the number of customers for a G/G/infinity queue at a fixed time under heavy traffic. The main technique is by obtaining fine estimates for the rate of convergence of the corresponding Gartner-Ellis limit via non-homogeneous renewal-theoretic bounds. Our refined asymptotic can be seen to resemble the standard form for sum of i.i.d. random variables, as a result of Gaussian diffusion approximation.
3 - The Multi-depot Heterogeneous Capacitated Vehicle Routing Problem with Stochastic Demand Mahdi Noorizadegan, University of Warwick, Warwick Business School and DIMAP, Gibbet Hill Road, Coventry, CV4 7AL, United Kingdom, m.noorizadegan@warwick.ac.uk, Bo Chen
We are concerned with a multi-depot heterogeneous vehicle routing problem with stochastic demands and capacities for both depots and vehicles. We extend the Miller-Tucker-Zemlin model and then improve it with additional sets of valid inequalities. Finally, we apply Chance Constrained Programming and Robust Optimization to solve the problem efficiently.
3 - Rare-event Simulation for Multi-server Queues in the Halfin-Whitt Regime Jing Dong, Columbia University, 500 West 120th Street, RM 325, New York, NY, 10027, United States of America, jd2736@columbia.edu, Jose Blanchet
We develop rare-even simulation methodology to analyze the event of high population overflow of FCFS M/H_d/n queue in the Halfin-Whitt heavy traffic regime. Our algorithm achieves logarithmical efficiency. The key strategy is to study the state of each server as a CTMC and tilt the system to the rare event over a randomized time horizon.
WD14
C - Room 208A
Multi-stage Stochastic Programming Applied to Power Systems Scheduling

Chair: Ross Baldick, Professor, University of Texas at Austin, 1 University Station, Austin, TX, United States of America, baldick@ece.utexas.edu Co-Chair: Luiz Augusto Barroso, Technical Director, PSR, Praia de Botafogo 228 sala 1701 Parte, Rio de Janeiro, RJ, 22250-906, Brazil, luiz@psr-inc.com 1 - On a Sampling-based Decomposition Applied to Hydrothermal Scheduling: Solution Quality and Bounds Anderson Rodrigo de Queiroz, Phd Student, The University of Texas at Austin, 1 University Station, C2200, Austin, TX, 787120292, United States of America, ar_queiroz@yahoo.com.br, David Morton
Sampling-based decomposition algorithms (SBDAs) have been used frequently in the literature to solve hydrothermal scheduling problems. Basically, a sample average approximation of the original problem is created and then solved by these algorithms. It is important to assess the solution quality of the resulting policy. We investigate variance-reducing sampling methods that improve SBDA performance and stopping rules that yield asymptotically valid confidence intervals on policy quality.
4 - Infinite-size Networks of Infinite Server-queues and Their Applications Xinyun Chen, Columbia University, S M Mudd Building, 500 West 120th Street, New York, NY, 10027, United States of America, xc2177@columbia.edu, Jose Blanchet
In this talk, we discuss a queueing network model consisting of infinitely many stations each having infinite number of servers. We discuss how these models are useful in insurance and finance. We also characterize fluid and diffusion limit for this network in terms of a suitable SPDE and related measure-valued stochastic processes.
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2 - Modeling and Forecast of Brazilian Reservoir Inflows under Climate Change Scenarios Luana Marangon, Student, University of Texas at Austin, Department of Mechanical Engineering, 1 University Station, C2200, Austin, TX, 78712, United States of America, luana_marangon@yahoo.com.br, Elmira Popova, Paul Damien
The hydrothermal scheduling problem is highly dependent on the water inflows at each hydropower generator reservoir. This work will focus on developing a probabilistic model for the inflows based on dynamic linear model. We seek for a suitable model to use as an input for a multistage stochastic algorithm that solves the hydrothermal scheduling problem. We also incorporate climate variables like precipitation, El Nino and other ocean indexes as predictive variables when relevant.
WD16
4 - A Framework for Upstream Natural Gas Supply Chain Design: LNG Distribution Network Fatih Mutlu, Qatar University, College of Engineering, Doha, Qatar, fatihmutlu@qu.edu.qa, Hakan Yildiz
The natural gas supply chain consists of six stages from upstream drilling of the raw gas and downstream of delivering the gas to the consumption points. Qatar is located at the upstream of the supply chain. Due to the geographical barriers, the gas has to be delivered to the importing countries in the form of LNG using high capacity vessels. Qatar made huge investments in building up the worlds largest vessel fleet to match increasing export volumes. This effort can be more fruitful with a careful planning of the distribution network. Such planning offers a challenging vehicle routing problem with multiple origin and destination locations and vessels varying in capacities and fuel performances. In addition, the problem brings along unique challenges due to the nature of LNG shipping. The scale, the distances, dynamic nature of demand, and high utilization of resources due to capacity limitations are among such challenges. In this research, we propose to design a framework for this planning problem by considering the multiple objectives that need to be satisfied simultaneously and the unique characteristics of the industry. Operations Research (OR) tools have been extensively used to address and solve such distribution network design and vehicle routing problems. Our methodology is to formulate a structural problem by considering all of the unique aspects of LNG distribution and then to use the (OR) tools to achieve efficient solutions.
3 - Dynamic Piecewise Linear Nested Decomposition for Nonlinear Stochastic Hydrothermal Scheduling Andr Diniz, Researcher, CEPEL, Av. Horacio Macedo 354, Ilha Fundao, Cidade Universitaria, Rio de Janeiro, RJ, 22220040, Brazil, diniz@cepel.br, Michel Ennes, Renato Cabral
We propose a dynamic piecewise linear nested decompositon approach to model nonlinear constraints in the stochastic hydrothermal scheduling problem. Linear approximations are adjusted iteratively as the overall problem is solved, Benders cuts remain valid but upper bounds are re-evaluated during the course of the algorithm. Results show the high accuracy to model the hydro generation function and quadratic thermal costs, with much lower CPU times as compared to a static model of the constraints.
WD16
C - Room 209A
4 - Fast Convex Hull And Stochastic Dynamic Programming Applied to Energy System Hydrothermal Planning Andr Marcato, Associate Professor, Federal University of Juiz de Fora, Campus UFJF - Faculdade de Engenharia, PPEE - Sala 206, Juiz de Fora, MG, 36036-330, Brazil, andre.marcato@ufjf.edu.br, Rafael Brandi, Bruno Dias, Tales Ramos, Ivo da Silva Junior, Joao Passos Filho
This work presents a methodology that improves the performance of the Dynamic SP applied to the long term operation planning of electrical power systems. This approach approximates the cost-to-go functions through the Convex Hull algorithm using a dynamic piecewise linear model. So, the linear cuts are included in the linear programming problems by an iterative process, the Fast SDP-ConvexHull. A case study is presented, based on data from the Brazilian system.
Applications in Open Pit and Underground Mining

Sponsor: Energy, Natural Resources and the Environment/ Mining Sponsored Session
Chair: Donal OSullivan, PhD Candidate, Colorado School of Mines, 1500 Illinois St., Golden, CO, 80401, United States of America, dosulliv@mines.edu 1 - Optimizing Marcellus Shale Mining Operations Norman Reitter, Advisor, Information Technology, Concurrent Technologies Corporation, 100 CTC Drive, Johnstown, PA, 15904, United States of America, reittern@ctc.com, Steffen Rebennack
The Pennsylvania Marcellus Shale region is booming with shale drilling operations. State government organizations and shale mining companies are faced with decisions that will impact long term economic benefit while balancing natural resource, public safety, and environmental compliance considerations. We present a shale mining optimization problem for strategic and tactical decisions for a mid-sized shale mining company to maximize economic benefit while meeting compliance requirements.
WD15
C - Room 208B
Data Visualizations for Improved Decision Making

Chair: David Lengacher, Concurrent Technologies Corporation, 1225 S. Clark Street, Suite 500, Crystal City, VA, United States of America, lengachd@ctc.com 1 - Dashboards for Efficiency Analysis David Lengacher, Concurrent Technologies Corporation, 1225 S. Clark Street, Suite 500, Crystal City, VA, United States of America, lengachd@ctc.com
Few visual aids are available for understanding the outputs of data envelopment analysis models. We develop conceptual interfaces to communicate a wide array of efficiency measures and their associated slack values.
2 - Nested Disaggregation Methods for Open Pit Mine Production Scheduling Thomas Vossen, University of Colorado, Boulder, CO, United States of America, vossen@colorado.edu, Menkes Van Den Briel, Kevin Wood, Alexandra Newman
The objective of open pit mine production scheduling is to determine a feasible extraction schedule from an open pit mine that maximizes profits over a given planning period. We present different decomposition methods that rely on repeated disaggregation to solve the linear programming relaxation of the corresponding model, together with heuristics to obtain high-quality integer solutions. Experimental results show the potential of our approach.
2 - Smarter Transportation Bharat Gera, IBM India Software Labs, India, bharatgera2008@gmail.com
The research project (done at IIM Bangalore) by me in transportation analytics deals with advanced Markov Stochastic Models to evaluate incident impacts (average travel time, blocked lanes etc.) in real time. This modeling will be integrated with Traffic Command Centers to optimize the traffic network for reduced incident impacts. Extended Kalman Filter for data cleansing and Service interrupted Queuing approaches are used in the model.
3 - Dealing with Price Uncertainty in Mine Planning Andres Weintraub, Professor, University of Chile, Department of Industrial Engineering, Repblica 701, Santiago, Chile, aweintra@dii.uchile.cl, Roger Wets, David Woodruff, Rafael Epstein, Jean-Paul Watson, Jaime Gacitua
We consider the problem of uncertainty in future copper prices, reflected through scenarios with probabilites. Imposing non-anticipativity constraints becomes computationally difficult for larger problems. We develop an approach for this problem based on Progressive Hedging, where the problem is decomposed by scenarios, and convergence to a feasible solution is attained through penalizing deviations from non-anticipativity. Positive results were obtained for an open pit mine problem.
3 - Pattern Recognition and Biased Perceptions of Randomness Qingxia Kong, PhD Student, National University of Singapore, Department of Decision Sciences, Singapore, Qingxia@nus.edu.sg
When facing complex information and uncertainty, human beings seek patterns to gain the sense of control. We explore in depth how information complexity leads to pattern recognition and thus affects the direction of biased perception of randomness. Using data from both lab and fields, we show that agents exhibit more Hot-hand Fallacy when the information is more complex. We then build a Bayesian Updating model to analytically show that moderate pattern recognition leads to Hot-hand Fallacy and obtain analytical conditions. These results have important implications.
4 - Long-Term Extraction and Backfill Scheduling in a Complex underground Mine Donal OSullivan, PhD Candidate, Colorado School of Mines, 1500 Illinois St., Golden, CO, 80401, United States of America, dosulliv@mines.edu, Alexandra Newman
We use an integer programming model to optimize production at a complex underground mining operation. Mine managers seek to maximize metal production while using a mixture of mining methods to extract the ore. We apply a sliding time window heuristic to solve for a four year schedule with weekly fidelity.
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C - Room 210B
5 - underground Mining System Development and Production Sequence Optimization Enrique Rubio, Assistant Professor, University of Chile, Mining, Santiago, Chile, erubio@ing.uchile.cl
A common practice in the mining industry is to decompose the planning process into different tasks, and then to compute the mining sequence and cut off grade profiles over the life of the mine. We describe a novel, integrated way of treating an underground mine sequence and production schedule while considering drift development scheduling, material handling options, and drift development.
Topics in Economics
Contributed Session
Chair: Jay Parsons, Optimal Ag Consulting, Inc., 3226 Ledgestone Court, Fort Collins, CO, 80528, United States of America, jay.parsons@OptimalAg.com 1 - SIAPOT - Territory Spatial Planning Optimization Software Carlos Paternina-Arboleda, Associate Professor, Universidad del Norte, Km 5 via Puerto Colombia, Barranquilla, Colombia, cpaterni@uninorte.edu.co, Luis Montao-Barrios
This work, presents SIAPOT, a mixed-integer optimization platform and graphical user interface software for territorial spatial planning. SIAPOT induces large-scale optimization methods and interaction with geographical databases for the planning of public space segmentation in urban settings. The software was run for a 350,000 people urban area in the north coast of Colombia with very good results.
WD18
C - Room 210A
Project Management
Contributed Session
Chair: Bruce Pollack-Johnson, Associate Professor, Villanova University, 800 Lancaster Avenue, Department of Mathematical Sciences, Villanova, PA, 19119, United States of America, bruce.pollack-johnson@villanova.edu 1 - Controlling the Coevolution of IT Project and Application Portfolios I. Robert Chiang, Fordham University, 441 E. Fordham Rd, GSB, Bronx, NY, 10458, United States of America, ichiang@fordham.edu, Manuel Nunez
Managing in-flight applications and developing new software capabilities are often considered separate issues in IT literature. However, poorly controlled application enhancement escalates maintenance cost and diminishes project funding; uncoordinated new development leads to functional redundancy and architectural complexity. We propose an optimization procedure to ensure project and application portfolios are periodically adjusted to support managerial objectives and meet resource constraints.
2 - Computing Supply Function Equilibria via Spline Approximations Sheng Yu, George Washington University, 1776 G Street NW, Suite 101, Washington, DC, 20052, United States of America, yusir@gwmail.gwu.edu, Enrique Campos-Nanez
The supply function equilibrium (SFE) is a model for competition in markets where each firm offers a schedule of prices and quantities to face demand uncertainty. We propose two methods for computing capacity constrained SFE via spline approximations. A specialized method is developed for duopoly markets with constant marginal costs, and a solution can be found by solving a least squares problem. Splines are also applied to a recently introduced general method to solve it faster.
2 - Financial Analysis of Stochastic Activity Networks Bajis Dodin, University of California Riverside, School of Business Administration, Riverside, CA, 92521, United States of America, bajis.dodin@ucr.edu;, A.A. Elimam
Stochastic Activity Networks (SAN) deal with projects where the required duration or resources for some or all activities are given as random variables characterized by probability distribution functions. In this paper we analyze SAN to study the impact of stochastic variations on the project resource needs, the budget estimates including price bidding and the financial plan for the project over its duration. We provide and illustrate practical procedures for financial planning and management of stochastic projects.
3 - Survey of Optimization Models for Equity John Hooker, Carnegie Mellon University, Tepper School of Buisness, Pittsburgh, PA, United States of America, john@hooker.tepper.cmu.edu
There is increasing interest in incorporating some measure of equity in optimization models. This talk briefly surveys mathematical programming formulations of equality and fairness criteria, including Atkinsons measure, McLoone index, Gini coefficient, Hoover index, Theil index, Nash bargaining, Raiffa-Kalai-Smorodinsky bargaining, Rawlsian and lexicographic criteria, and proposals for combining equity and efficiency. The rationale and possible applications for each will be discussed.
3 - Measuring the Impact of Design Errors on Construction Kiavash Parvan, Ph.D. Candidate in Project Management, University of Maryland, College Park, 3425 Tulane Dr. Apt#23, Hyattsville, MD, 20783, United States of America, kparvan@umd.edu, Ali Haghani
Design errors are often the chief cause of reworks in construction projects. There is a lack of research on measuring the impact of defects and reworks occurring in design phase on the construction process. This study is the first attempt to quantify this impact. The study employs system dynamics to model and analyze the design and construction process interactions and feedback relations.
4 - Using a Response Surface to Estimate High Profit Combinations for Technology Adoption Jay Parsons, Optimal Ag Consulting, Inc., 3226 Ledgestone Court, Fort Collins, CO, 80528, United States of America, jay.parsons@OptimalAg.com, Katelyn McCullock
A case study was constructed for the purpose of analyzing the implementation of sexed semen in the dairy industry. Stochastic variables for market, management, and technology were used to construct a response surface to identify and analyze conditions for profitable adoption.
WD21
C - Room 211B
4 - Modeling Quality, Cost, and Time in Software Development Project Scheduling and Planning Bruce Pollack-Johnson, Associate Professor, Villanova University, 800 Lancaster Avenue, Department of Mathematical Sciences, Villanova, PA, 19119, United States of America, bruce.pollack-johnson@villanova.edu, Matthew Liberatore
We use an example of a software development project to illustrate how quality can be modeled as a continuous function of time and cost. Given a project deadline and budget, overall quality can then be maximized using a nonlinear programming model. Alternatively, iso-quality curves can be drawn, to visualize the continuous tradeoffs between time, cost, and quality, and then used to pick a combination that seems best for a particular situation.
Applied Stochastic Programming

Chair: Urmila Diwekar, President, Vishwamitra Research Institute, 368 56-th Street, Clarendon Hills, IL, 60514, United States of America, urmila@vri-custom.org 1 - Real-time Water and Energy Management in Power Plants and Implications in Electricity Markets Victor M. Zavala, Assistant Computational Mathematician, Argonne National Laboratory, 9700 S Cass Avenue, Argonne, IL, 60439, United States of America, vzavala@mcs.anl.gov, Juan Salazar, Urmila Diwekar, Emil Constantinescu
We propose a real-time optimization framework to integrate water and energy management in power plants. The objective of the framework is to construct optimal bidding curves (power output vs. price) using a first-principles model of the power plant and of the cooling towers under uncertain weather conditions.
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2 - Multistage Stochastic Programming Approaches for Strategic Planning under Endogenous Uncertainties Vijay Gupta, Graduate Student, Carnegie Mellon University, 5000 Forbes Avenue, Chemical Engineering Department, Pittsburgh, PA, 15213, United States of America, vijaygup@andrew.cmu.edu, Ignacio Grossmann
We consider a generic mixed-integer linear multistage stochastic programming model with endogenous (decision-dependent) uncertainties; e.g. process yields, oil and gas reservoir sizes. Solution methods are proposed for large-scale problems in this class exploiting problem structure and practical considerations. Several risk measures are considered to analyze the robustness of the solution.
WD23
4 - Natural Gas Bilevel Cash-Out Problem: Convergence of a Penalty Function Method Gerardo Perez Valdes, Postdoctor, Norwegian University of Science and Technology, Sentralbygg I, Alfred Getz veg 3, Trondheim, Norway, gerardo.valdes@iot.ntnu.no, Vyacheslav Kalashnikov, Natalya Kalashnikova, Stephan Dempe
Natural gas pipeline systems present interesting hierarchical settings between the shippers and the pipeline operators. In this work, we have modeled the contending actors in a bi-level linear optimization which is solved by means of an inexact penalization approach, with the lower level modeled as a variational inequality. The convergence of such approach is demonstrated and results regarding its computational implementation are presented and discussed.
3 - Optimal Glucose Control Using Finite-element Methods John Birge, Professor, University of Chicago, Booth School of Business, Chicago, IL, United States of America, john.birge@chicagobooth.edu, Zhen Liu
We consider continuous control of insulin for diabetic patients to minimize cumulative deviations of blood glucose levels from a basal target level. We extend a model of plasma glucose concentration levels to include random responses as well as lagged and noisy observations from a monitoring device. We will discuss alternative solution methods and will provide preliminary computational results.
5 - On Bi-level Support Vector Machine Parameters Selection Problem Yu-Ching Lee, University of Illinois at Urbana-Champaign, 104 S. Mathews Avenue,, Urbana, IL, 61801, United States of America, ylee77@illinois.edu, Jong-Shi Pang
Support vector machine is a robust classification/regression method often used in machine learning or data mining. Two design parameters, the insensitive tube size and the weight to error trading off the normed support vector, are selected by users to gain a better performance. The parameters selection procedure can be formulated as a bi-level optimization problem, which is NP-hard. Our work on solving problem with hundreds of data points will be presented and compared with several approaches.
4 - Optimization under Uncertainty in Biodiesel Production Urmila Diwekar, President, Vishwamitra Research Institute, 368 56-th Street, Clarendon Hills, IL, 60514, United States of America, urmila@vri-custom.org, Sheraz Abbasi, Juan Salazar
Uncertainties are inherent in biofuel production. In this paper, we present an optimization study in the face of feedstock variability/uncertainty.
WD23
C - Room 212B
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Topics in Disaster and Emergency Management

Contributed Session
Chair: Diana Prieto, University of South Florida, 4202 E. Fowler Avenue, ENB 118, Tampa, FL, 33620, United States of America, dprieto@mail.usf.edu 1 - Modeling of Critical Infrastructure Interdependency with the Smart Power Grid Subject to Severe Emergency Pravin Chopade, Research Associate (Ph.D. Student), North Carolina A& T State University, Greensboro, NC, USA, Computational Science and Engineering, 301 Fort IRC Building,1601East Market st, Greensboro, NC, 27411, United States of America, pravinvchopade@gmail.com, Dr. Marwan Bikdash
This paper reports one such prospect brought by the topological analysis of the blackout. By examining the cascading events of the blackout, the paper explores the clues to the inherent relationship between the observed topological property of the Smart power grid and the cascading outages experienced in the grid. We had developed network-flow and graph-theoretic measures that can be used to assess vulnerability.
Nonlinear Optimization: Theory and Applications

Contributed Session
Chair: Yu-Ching Lee, University of Illinois at Urbana-Champaign, 104 S. Mathews Avenue,, Urbana, IL, 61801, United States of America, ylee77@illinois.edu 1 - Complexity of Unconstrained L2-Lp Minimization Dongdong Ge, Shanghai Jiao Tong University, 535 Fahua Zhen Road, Shanghai, 200052, China, dongdong@gmail.com, Yinye Ye, Zizhuo Wang, Xiaojun Chen
We consider the unconstrained L2-Lp minimization: find a minimizer of |Axb|^2+c|x|^p for given matrix A and vector b, and positive parameters c,p. We show that the Lq-Lp minimization problem is strongly NP-hard. We also show that, by choosing parameters carefully, a minimizer, global or local, will have certain desired sparsity. We believe that these results provide new theoretical insights to the studies and applications of the concave regularized optimization problems.
2 - Minty Variational Principle for Set-valued Variational Inequalities Giovanni Crespi, Associate Professor, University of Valle dAosta, Loc. Grand Chemin 73/75, Saint-Christophe, 11020, Italy, g.crespi@univda.it, Matteo Rocca, Ivan Ginchev
It is well known that a solution of a Minty scalar variational inequality of differential type is a solution of the related optimization problem, under lower semicontinuity assumption. This relation is known as ``Minty variational principle. In this presentation we study this principle in the vector case for an arbitrary ordering cone and a non differentiable objective function. Further, we extend the Minty variational principle to set-valued variational inequalities.
2 - Non-pharmaceutical Interventions for Pandemic Influenza Dayna Lee Martinez, University of South Florida, Tampa, FL, United States of America, dlmartin@mail.usf.edu, Tapas Das
Non-pharmaceutical interventions (quarantine, closures) have been shown to reduce infection attack rates and delay the spread in selected pandemic influenza outbreak outbreak scenarios. We investigate the nature of interactions among some of the key intervention parameters, such as initiation thresholds, intervention duration, and compliance levels, and the levels of virus transmissibility.
3 - Implementing Advanced Algorithms in AIMMS Marcel Hunting, Paragon Decision Technology, Schipholweg 1, Haarlem, 2034 LS, Netherlands, marcel.hunting@aimms.com
The GMP library, introduced in AIMMS 3.5 for building advanced algorithms, has steadily grown over the past years. We show some examples including multistart and the Quesada-Grossmann algorithm for convex MINLP which has been implemented using only GMP functions and CPLEX callback procedures.
3 - Real-time Data Collection Strategies for Epidemiological Characterization of Pandemic Outbreaks Diana Prieto, University of South Florida, 4202 E. Fowler Avenue, ENB 118, Tampa, FL, 33620, United States of America, dprieto@mail.usf.edu, Alfredo Santana, Sharad Malavade, Tapas Das
State Public Health Laboratories (PHLs) determine the strain of circulating viruses in the US. Specimens are generally collected from the sentinel healthcare providers for routine surveillance. However, during the recent H1N1 pandemic, the PHLs also received specimens from non-sentinels. The PHLs tested all the specimens received, extending the desired testing timeline. Using simulation and Bayesian estimation, we suggest strategies for better specimen collection and processing.
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C - Room 213A

2 - Is More, Less? The Impact of Inventory on Sales Among Auto Dealers Gerard Cachon, Fred R. Sullivan Professor of Operations and Information Management, The Wharton School, 500 Huntsman Hall, 3730 Walnut Street, Philadelphia, PA, 19104, United States of America, cachon@wharton.upenn.edu, Marcelo Olivares, Santiago Gallino
Auto dealers often want more inventory, presumably because more inventory will lead to higher sales. We test this hypothesis using detailed data of inventory holdings of individual General Motor dealerships in seven states over a 6 month period. We use a novel set of instruments - adverse weather at production facilities - to overcome several endogeneity concerns. We find that increasing inventory, while holding offered variety constant, lowers sales but expanding variety increases sales.
Topics in Bilevel Integer Programming

Chair: J. Cole Smith, University of Florida, P.O. Box 210020, Gainesville, FL, 32611, United States of America, j.cole.smith@gmail.com 1 - Computational Experience Solving Bilevel Integer Programs Ted Ralphs, Lehigh University, 200 West Packer Avenue, Bethlehem, PA, United States of America, ted@lehigh.edu, Menal Guzelsoy, Scott DeNegre
In this talk, we discuss the MibS framework for solving integer bilevel programs. We first describe the theoretical foundations of the solver then the details of our implementation. Finally, we review computational results on several classes of problems, including generic bilevel integer programs.
3 - In Search of the Perfectly Coordinated Supply Chain: Shared Supply Surplus Fang Liu, Duke University, 100 Fuqua Drive, No, 27708, United States of America, fang.liu2@duke.edu, Jeannette Song, Tracy Lewis
N-1 retailers contract with one manufacturer for product supply over T periods. The N members each make private investments to utilize the production capacity. Prior to each period, the retailers and manufacturer privately observe the demand and supply conditions and negotiate a quantity and a delivery price. This paper characterizes the set of private investments and capacity allocations that is self supporting and voluntary under unpredictable and unverifiable market conditions.
2 - Optimizing Exclusivity Agreements in a Three-State Procurement Game Mike Prince, Graduate Assistant, University of Florida, P.O. Box 210020, Gainesville, FL, 32611, United States of America, mikeprince4@ufl.edu, J. Cole Smith, Joseph Geunes
We consider a procurement game in which firms compete for limited capacity at multiple suppliers, and one firm can purchase exclusivity rights from any of the suppliers. The resulting formulation is a three-stage MIP that, depending on the followers goals, may contain an embedded bilevel program. We apply duality techniques to reduce the number of stages, and propose cutting plane algorithms to solve the resulting problems.
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3 - Mixed Integer Bilevel Programming Model and Algorithm for a Competitive Product Introduction Problem Soheil Hemmati, University of Florida, P.O. Box 210020, Gainesville, FL, 32611, United States of America, soheilmn@ufl.edu, J. Cole Smith
Mixed Integer Bilevel Programming (MIBLP) problems arise in the context of non-cooperative games, where each player aims to optimize his own objective, and in particular when Yes-No decisions are to be made. We develop an MIBLP model for a setting in which two players aim to maximize their own profit by deciding on the products to be introduced to multiple market segments with different preference lists. We also examine the efficacy of a cutting plane algorithm tailored for the problem.
Topics in Outsourcing
Contributed Session
Chair: Toby Lehman, Research Scientist, IBM Almaden Research Center, 650 Harry Road, Mailstop D3-248, San Jose, CA, 95120, United States of America, toby@almaden.ibm.com 1 - Make or Buy: A Different Story Zhaoqiong Qin, North Carolina Agricultural and Technical State University, 1601 E. Market Street, Greensboro, NC, 27411, United States of America, zqin@ncat.edu
Conventional wisdom says that outsourcing occurs when firms procure the products from upstream suppliers with lower production costs. In this paper, we investigate the effect of outsourcing when one of two competing firms can either outsource the products from the same supplier as the other one or produce the products himself. The results show that the firm can still benefit from outsourcing even if his production cost is lower than the outsourcing cost. We draw the managerial implications.
4 - The SAA Method with Heuristics and Lower Bounds with an Application to the SConFL Problem S. Raghavan, Smith School of Business, University of Maryland, College Park, MD, 20742, United States of America, raghavan@umd.edu, M. Gisela Bardossy
We consider the Connected Facility Location (ConFL) problem where there are uncertain and independently-activated assignment costs. For circumstances where the number of scenarios growth exponentially and the underlying problem is NP-complete, we propose a sample average approximation strategy yet use a heuristic and lower bounding procedure to solve the sample average problems and construct a confidence interval on the total cost of the stochastic optimal solution.
2 - The Optimal Offshore Outsoucing Strategy in the Presence of Technological Spillover Yan Zhang, Doctor Candidate, Xian Jiaotong University, No.28, Xianning West Road, 2341 Box, Xian, 710049, China, mzb-7881630@163.com, Qin Su
Supposed the outsourcing supplier located in a less developed country with lower wage and technology is also the direct competitor of the buyer,we offer a dynamic game framework and analyze the optimal outsourcing strategy for the buyer. The result shows that outsourcing is optimal for the buyer only if the marginal cost gap between the two sides of outsourcing is greater than a threshold, which is affected by the product substitution, brand equity and the suppliers absorption capacity.
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C - Room 213BC
New Topics in Supply Chain Management

Chair: Jeannette Song, Professor, Duke University, Fuqua School of Business, Durham, NC, 27708, United States of America, jingsheng.song@duke.edu 1 - Project-Based Supply Chains with Uncertain Demand Timing and Changing Technological Requirements Hugo Mora, Stanford University, 475 Via Ortega, Stanford, 94305, United States of America, hrmora@stanford.edu, Hau Lee, Carlos Amaro, Warren Hausman
We analyze the incentive conflict between a manufacturer and a subassembly supplier in a project-based supply chain when the buyer considers a possible change in the subassembly requirements. The supplier faces rework/holding costs if subassembly production is early and a change is made, but the manufacturer is exposed to late penalty fees if production is delayed. We design coordinating profit-sharing contracts under asymmetric information regarding both order forecast and rework/holding costs.
3 - Cost Estimation for Outsourcing of Business Process Services Toby Lehman, Research Scientist, IBM Almaden Research Center, 650 Harry Road, Mailstop D3-248, San Jose, CA, 95120, United States of America, toby@almaden.ibm.com, Wesley Humphrey
A service provider for business process outsourcing is challenged to estimate the cost of providing service to a prospective client. The targeted precision and the decisions made in the process can vary greatly depending on the variability and reliability of information about the service to be provided. We present a framework that accounts for different types of decisions made in cost estimating, which are based on the nature of the information available to the cost modeler.
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C - Room 214
WD30
Consumer Behavior in Operations and Supply Chain Management

Chair: Robert Swinney, Assistant Professor, Stanford University, 518 Memorial Way, Stanford, CA, 94305-5015, United States of America, swinney@stanford.edu 1 - Demand Learning and Pricing Strategy with Strategic Consumers Fuqiang Zhang, Professor, Washington University in St. Louis, Operations & Manufacturing Management, St. Louis, MO, United States of America, FZhang22@wustl.edu, Mike Wei, Yossi Aviv
This paper studies the pricing strategy of a seller who sells a fixed amount of inventory to strategic consumers. The seller learns about the demand through early sales and may adjust price using the demand information. We compare three different pricing strategies for the seller and investigate the impact of demand learning under the presence of strategic consumers.
2 - Bounding the Performance of Ambulance Redeployment Policies Shane Henderson, Professor, Cornell University, School of ORIE, 230 Rhodes Hall, Ithaca, NY, 14853, United States of America, sgh9@cornell.edu, Huseyin Topaloglu, Matthew Maxwell
Ambulance redeployment, AKA system status management, is a method for realtime control of an ambulance fleet. The goal is to reduce the fraction of calls with response times that are outside some time threshold. We present a lower bound on this quantity for all policies and compare its value to the performance of some policies.
3 - Reformulating the Maximum Available Location Problem: A Case Study on Charlotte Mecklenburg Hari Rajagopalan, Associate Professor, Francis Marion University, School of Business, Florence, SC, 29501, United States of America, HRajagopalan@fmarion.edu, Elizabeth Sharer, Cem Saydam, Sanjay Mayadunne
In this paper we show that the maximum availability location problem (MALP) can be reformulated with fewer variables and constraints. Our computational experiments demonstrate that the reformulated MALP (rMALP) solves much faster and also lends itself to more efficient heuristic development. Data from Charlotte Mecklenburg is used here.
2 - Selling to Conspicuous Consumers: Pricing, Production and Sourcing Decisions Necati Tereyagoglu, Doctoral Candidate, The Wharton School, 3730 Walnut Street, Suite 500, Jon M Huntsman Hall, Philadelphia, PA, 19104, United States of America, necati@wharton.upenn.edu, Senthil Veeraraghavan
We model the value of stockouts for products which are consumed conspicuously in a market with uncertain demand and strategic customers. We show that, in equilibrium, firms may offer high availability of goods despite the presence of conspicuous consumption. We show that scarcity strategies are harder to adopt as demand variability increases, and we provide conditions under which scarcity strategies may be successfully adopted to improve profits.
WD30
C - Room 216B
Information in the Supply Chain I

Contributed Session
Neda Khanjari, Northwestern University, 2145 Sheridan Road Room, Evanston IL 60208, United States of America, neda@u.northwestern.edu 1 - The Value of Information Sharing in a Supply Chain Shubin Xu, Ph.D. Candidate, Lundquist College of Business, 1208 University of Oregon, Eugene, OR, 97403, United States of America, sxu@uoregon.edu, Yue Fang
We study information sharing in a supply chain with a nonlinear demand model that is able to capture more complex patterns in the demand process. We consider various scenarios with respect to the information structure and show that under certain conditions, the value of information sharing is substantial.
3 - Strategic Bidders Club: Implications for Consumer Learning Yuri Levin, Queens University, Goodes Hall, Kingston, ON, Canada, YLevin@business.queensu.ca, Mikhail Nediak, Jeff McGill, Tatsiana Levina
We develop a model of strategic consumer learning of bidding strategies in a market for opaque products, obtain the optimal strategies for the consumers, and study their properties. The effects of consumer cooperation on learning are examined and compared under the following scenarios: exchange of information only, exchange of information with coordinated bidding, and coordinated bidding with risk pooling in the form of outcome-contingent payment scheme.
4 - Strategic Customer Behavior and its Impact on Revenue Management Strategies Serguei Netessine, Professor, INSEAD, Boulevard De Constance, Fontainebleau, 77300, France, serguei.netessine@insead.edu, Jun Li
We investigate the existence and scale of strategic (forward-looking) consumers using a unique click-stream dataset. We study the timing of consumers search, view, and purchase decisions, and the effect of availability on these decisions. Finally, we examine the revenue impacts of such behaviors, and the interaction between intermediarys recommendation strategy and hotels revenue management strategy.
2 - The Impact of Partial Information Sharing in a Two-echelon Supply Chain Matan Shnaiderman, Bar-Ilan University, ., Ramat-Gan, 52900, Israel, Matan.Shniderman@biu.ac.il, Fouad El Ouardighi
We consider a two-echelon supply chain in which during every period each side gathers information concerning future demand. While the literature is saturated with studies of either no or full information sharing, partial levels of sharing exist and have the potential to reduce costs. Each party informs the other party not necessarily of the exact value of his own component of demand, but an interval in which this value lies. We analyze how several levels of information sharing can reduce costs.
3 - Trust and Information Sharing in Supply Chains Neda Khanjari, Northwestern University, 2145 Sheridan Road Room, Evanston, IL, 60208, United States of America, neda@u.northwestern.edu, Seyed Iravani, Wallace Hopp
We construct a multi-period model with which to examine the role of trust and other social characteristics in a supply chain. Specifically, we focus on trust building in the context of a wholesale salesperson who acts as a representative of a manufacturer and shares demand forecast information with a retailer. We find that salespersons tend to be trusted in long relationships, provided their forecasting accuracy is higher than that of the retailer.
WD28
C - Room 215
Emergency Medical Service Systems

Chair: Maria Mayorga, Clemson University, Clemson, SC, United States of America, mayorga@clemson.edu 1 - Integrated Dispatching and Districting Policies for EMS Vehicles Maria Mayorga, Clemson University, Clemson, SC, United States of America, mayorga@clemson.edu, Damitha Bandara
Districting allows an EMS system to reduce the response time of paramedic support to the incident. Furthermore, dispatching policies affect system performance. Therefore, we provide integrated districting-dispatching policies. Several objective functions are considered. An integer programming formulation is used to determine the response area for each unit and a heuristic is used to dispatch units within a service area. Simulation is used to determine the overall performance of the system.
4 - The Impact of the Sales-agents Efficiency and Demand Information on a Supply Chain Neda Khanjari, Northwestern University, 2145 Sheridan Road Room, Evanston, IL 60208, United States of America, neda@u.northwestern.edu, Seyed Iravani, Hyoduk Shin
We study the impact of a manufacturer-hired salesperson who promotes consumer demand in a supply chain with one manufacturer and one retailer. We study the effect of the superior demand information of the downstream parties and efficiency of the sales-agent on supply chain profits. We show that the retailer sometimes prefers less efficient sales-agents and his profit can be decreasing in the accuracy of his demand forecast.
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C - Room 217D
Partnering with Providers for Practical Implementation

Chair: Linda LaGanga, Director of Quality Systems, Mental Health Center of Denver, 4141 East Dickenson Place, Denver, CO, 80222, United States of America, Linda.Laganga@MHCD.org 1 - Operations Management Applications in an Orthopaedic Center Sanjeev Bordoloi, Associate Professor, University of St. Thomas, 1000 LaSalle Avenue, TMH 443, Minneapolis, MN, 55403, United States of America, sbordoloi@stthomas.edu, David Fischer
Healthcare professionals are increasingly finding the value of Operations Management tools in healthcare practices and starting to partner with academic institutions for operational improvements in clinics. This paper discusses the efforts on an ongoing partnership between academia and an Orthopaedic clinic towards lean applications and productivity improvements.
Advances in Reliability and Risk Analysis

Chair: Refik Soyer, Professor, George Washington University, Department of Decision Sciences, Washington D.C., 20052, United States of America, soyer@gwu.edu 1 - Generalized Diagonal Band Copulas with Two-Sided Generating Densities Johan Rene van Dorp, Professor, The George Washington University, 1776 G Street, NW, Suite 101, Washington, DC, 20052, United States of America, dorpjr@gwu.edu
In this presentation we shall study a sub-family of generalized diagonal band (GDB) copulas, separately introduced by Ferguson (1995) and Bojarski (2001). Similar to Archimedean copulas, GDB copulas construction require a generator function. Bojarskis GDB copula generator functions are symmetric probability density functions. In this talk, members of a symmetric two-sided framework of distributions introduced by Van Dorp and Kotz (2003) shall be considered.
2 - Utilizing On-call Providers for Optimal Staff Scheduling for Emergency Rooms Subhamoy Ganguly, University of Colorado at Boulder, 419 UCB, Boulder, CO, 80309, United States of America, Subhamoy.Ganguly@Colorado.edu, Stephen Lawrence
We develop an integer-programming model to provide an effective staffing schedule for emergency rooms, which includes the option of having providers on call. Historical data are used to aggregate patient demand into discrete time buckets and model the stochastic distribution of patient demand within these buckets. This reduces the complexity of the problem without significantly reducing model fidelity. Our model balances staffing costs and service levels, and facilitates sensitivity analysis.
2 - A Bayesian Approach for Reliability Growth for Multistage Systems Thomas Mazzuchi, Professor, George Washington University, 1776 G St. NW, Washington DC, DC, 20052, United States of America, mazzu@gwu.edu
This paper looks at continuing the application of reliability growth models throughout the life of a single shot system using a multi-stage model together with Bayesian inference to offset the problem of small sample test information. The paper examines how the availability of continuously updated reliability predictions can support programmatic decisions throughout a systems life cycle removing decision makers dependence on estimates formed at the initiation of the program.
3 - A Simulation Optimization Approach for Data-Driven Clinic Design in the Presence of No-Shows Michele Samorani, Leeds School of Business, University of Colorado at Boulder, UCB 419, Boulder, CO, 80309, United States of America, michael.samorani@colorado.edu, Linda LaGanga
Given the data of a clinic with a high no-show rate, we aim at finding the appointment scheduling system that maximizes patient access and minimizes clinic overtime and patient waiting time. Our simulation optimization approach finds the best policy to adopt, by determining 1) if data mining should be used to predict whether the patients show, 2) what is the maximum allowed time gap between the visit request and the visit itself, 3) whether to overbook or not and, if so, how many slots to use.
3 - Importance of Components for a System Ehsan Soofi, Professor, University of Wisconsin-Milwaukee, Lubar School of Business, P.O. Box 742, Milwaukee, WI, 53201, United States of America, esoofi@uwm.edu, Nader Ebrahimi, Refik Soyer
We introduce measures of importance of components for a system. The importance is defined by the extent to which the state or life length of a system depends on the states or life lengths of its components. The dependence is measured by an information function that quantifies the expected utility of a variable for predicting another variable. We give measures of importance for the series, parallel, k-out-of n, and cold redundancy systems in terms of mission reliability and life lengths.
4 - The Landscape of Healthcare: Empirical Models CJ McKinney, Mental Health Center of Denver, Denver, CO, christopher.mckinney@mhcd.org, Linda LaGanga
Healthcare is delivered in a landscape where resources are allocated along a service continuum that includes the dimensions of delivery setting (inpatient and outpatient) and focus (physical and behavioral health). Effective outpatient care can reduce overall healthcare expenses and improve quality for patients. Emerging models of integrated care consider the interaction between behavioral and physical health and the achievement of high quality outcomes in the context of accountable care.
4 - When is Failure Preferable to Survival ? Refik Soyer, Professor, George Washington University, Department of Decision Sciences, Washington D.C., 20052, United States of America, soyer@gwu.edu, Ehsan Soofi, Nader Ebrahimi
During the conduct of a life test, do we want to observe more failures or more survivals? Intuitively speaking, because of the definitiveness of failures,the answer seems to be the former. However, it has been shown that this is not always true and the answer depends on the particular parameter of interest. We show that the existing findings can be generalized and address the question when interest centers around prediction.
5 - Operational and Electronic Innovations in a Community Mental Health Center Linda LaGanga, Director of Quality Systems, Mental Health Center of Denver, 4141 East Dickenson Place, Denver, CO, 80222, United States of America, Linda.Laganga@MHCD.org, Wes Williams, Craig Iverson
We utilize and integrate our electronic medical record into key workflow processes. This provides performance measures for our lean process improvement projects, and guides clinical and administrative workflow. We present selected projects that demonstrate capacity expansion, improved quality of care, and error reduction leading to revenue maximization, and discuss issues related to implementation and employee involvement.
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C - Room 218A
Joint Session HAS/Homeland Security: Modeling Radiological Events

Sponsor: Health Applications/Homeland Security- Emergency Prep Sponsored Session
Chair: Eva Lee, Professor & Director, Georgia Insitute of Technology, Atlanta, GA, 30332, United States of America, eva.lee@gatech.edu 1 - Radiological Preparedness and Population Screening Eva Lee, Professor & Director, Georgia Insitute of Technology, Atlanta, GA, 30332, United States of America, eva.lee@gatech.edu
This work began in 2006 with the Radiation Study Branch at CDC. The work focuses on radiological emergency response that is critical for radiological/nuclear terrorism incidents or from natural disasters. Key elements involve immediate medical treatment, decontamination, evacuation, sheltering and population screening and monitoring, along with food/water supply. We will present some of our scientific efforts in this area and describe our participation in the Japan Fukishima events.
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2 - Modeling and Simulation of Radiation/Nuclear Screening of Small Vessels at U.S. Maritime Ports George Muller, Pacific Northwest National Laboratory, 902 Battelle Blvd, P.O. Box 999, MSIN K7-20, Richland, WA, 99352, United States of America, george.muller@pnnl.gov, Robert Brigantic
The Domestic Nuclear Detection Office (DNDO) was established to improve the Nations capability to detect the illegal import of radiological or nuclear (R/N) materials. One focus area is conducting R/N screening of small vessels under surge operations in the maritime environment. This presentation reviews a stochastic, discrete event simulation developed for this purpose and how this information is used to derive resource and cost estimates for establishing capabilities at U.S. maritime ports.
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customers have been reluctant to go paperless. We analyze the challenges with current programs and propose a Green Fee on customers that could be more efficient than incentive rewards.
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Topics in Strategy
Contributed Session
Chair: Andrea Masini, HEC Paris, 1 Rue de la Liberation, Jouy en Josas, France, masini@hec.fr 1 - The Prescriptive Space of Procedural Rationality in Top Management Team Decision Making Michael Wittland, research associate, University of Cologne, Albertus-Magnus-Platz, Cologne, 50923, Germany, wittland@wiso.uni-koeln.de, Ludwig Kuntz
What makes a decision a good decision? Bringing together the prescriptive theory of group decisions with multiple criteria and TMT-research, we deduce that high levels of goal congruence, willingness to compromise and equally distributed power increase procedural rationality via communication and cohesion. Mediation analysis of data of 70 TMTs of German hospitals supports our theory.
3 - Organizational and Behavioral Factors in Public Preparedness for Radiological Emergencies Shital Thekdi, Ph.D. Candidate, University of Virginia, 817 Catalpa Ct., Charlottesville, VA, 22903, United States of America, st4dw@virginia.edu, Tom Guterbock, Janet Clements, Jim Lambert
This talk describes: (i) Interagency coordination in radiological emergencies for Rio de Janeiro, Brazil, and (ii) Population behaviors in highway performance of the National Capital Region (NCR) in dirty bomb attacks. The methods are cognitive task analysis for responder agencies, a survey of 2700 citizens, travel modeling based on the origins and destinations of evacuees, and a virtual-reality simulation marketing preparedness resources to the public.
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E-Business
Contributed Session
Chair: Rajorshi Sen Gupta, Graduate Fellow, Texas A&M University, 2124 TAMU, College Station, TX, 77843, United States of America, rajorshi@tamu.edu 1 - A Practical Method of Building Trusted Online Drug Transaction Environment in China Xiao Yu, Ph.D candidate, School of Information Science and Technology, Tsinghua University, Main Building 611, Beijing, 100084, China, xux03@mails.tsinghua.edu.cn, Yueting Chai, Yi Liu
Purchasing drugs online becomes a trend in China, however is still risky for ordinary people. E-commerce has offered opportunists and lawbreakers a new way to escape government regulation, resulting in the adverse selection effect. Weve implemented a pilot project cooperated with State Food and Drug Administration of China, in which weve designed and developed three public infrastructure e-services: Identity Authentication Service, Product Information Service and Electronic Contracts Service.
2 - Optimization Model to Maximize the Recovery Factor in Mature Oil Fields: Mexico Case Lorena Berumen, Professor, Universidad Panamericana, Augusto Rodin 498, Col. Insurgentes Mixcoac, Mxico, D.F., 03920, Mexico, laberumen@up.edu.mx, Irma Glinz, Margarita Hurtado
Improving the recovery factor of conventional oil resources will play a decisive role in offsetting the inevitable decline of oilfields. Even as new discoveries are developed and produced, substantial additional reserves can be secured by enhancing recovery. Consequently, mature fields require a strategy to maximize the expected value of the recovery factor under limited budget conditions.
3 - A Study on Features and Current Status of Diversified Enterprises in Korea Hyun Kyung Kim, Dr., Statistical Research Institute, Statistics Korea, Daejeon Narakeyum 282-1, Wolpyeong-dong, Seo-gu, Daejeon, 302280, Korea, Republic of, khk144@korea.kr
This research investigates the diversification of Korean enterprises using the Census on Enterprise Activity data constructed by Statistics Korea. The empirical results indicate that most Korean enterprises are adding to the everincreasing diversification on the whole. Also, the characteristics of an enterprise, including industrial classification, the number of employees, total sales, and the location, have a statistically significant impact on the degree of its diversification.
2 - Wet Marketing on Micro-blog Based on the 4R Theory Lifang Peng, Professor, Xiamen University, Management School, Xiamen, China, lfpeng@xmu.edu.cn, Yang Xu
With its rapid growth, the popular social network platform micro-blog engenders a new way of marketing called wet marketing. To explore how to do marketing on it, this paper first analyzes the differences between micro-blog marketing and other network marketing ways and conduct a SWOT analysis on it. According to the anlysis, it discusses the significances and applications of 4R marketing theory on micro-blog marketing. Finally, we make a case study on Chang an Ford to verify our discussion.
4 - Revisiting the Link between IT Governance and Operations Strategy: An Empirical Investigation Andrea Masini, HEC Paris, 1 Rue de la Liberation, Jouy en Josas, France, masini@hec.fr, Marco Perona, Alessandro Sicco
We develop and empirically test a model that sheds further light on the nexus between IT governance, operations strategy and organizational performance. The results suggest that companies with more skilled IT departments adopt more focused operations strategies. The analysis also indicates when these firms enjoy better performance compared to firms with weaker IT governance and calls for a better coordination between the IT and Operations functions.
3 - Competing Across Different Channels: The Case of Online Fitness Service Lei Wang, University of Connecticut, OPIM Department, Storrs, CT, 06269, United States of America, lei.wang@business.uconn.edu
Instead of traditional channels, more and more firms adopt web channel to deliver their services. In this paper, we develop a two-period model to examine the impact of asymmetric switching cost and customer heterogeneity on the competition between an online fitness service provider and a brick-and-mortar fitness club which are both forward looking. Our results show that, under different switching cost and marginal cost conditions, there exist dominant pricing strategies for both firms.
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Information Security and Risk Management

Chair: Jackie Rees, Associate Professor of Management, Purdue University, 100 South Grant Street, West Lafayette, IN, 47907, United States of America, jrees@purdue.edu 1 - Risk Mitigation Decisions for IT Security Lisa Yeo, University of Alberta, 2-24 Business Building, University of Alberta, Edmonton, AB, T6G 2R6, Canada, myeo@ualberta.ca, Erik Rolland, Jackie Rees, Ray Patterson
Enterprises must manage their information risk as part of their larger operational risk management program. Using organizational workflows to examine control placement as part of an information risk management program, we are able to construct optimal control implementation solutions, achieving a guaranteed level of information security assurance. We compare our solution to results from different heuristics under different loss scenarios.
4 - TransfORming towards Paperless Billing: Incentive Payments or Green Fees? Rajorshi Sen Gupta, Graduate Fellow, Texas A&M University, 2124 TAMU, College Station, TX, 77843, United States of America, rajorshi@tamu.edu, Mark Musumba
Companies are trying to transfORm their operations in favor of sustainable paperless alternatives. Electronic billing leads to reduced operating costs for companies, offers convenience to customers and is environmentally benign. Despite various kinds of Incentive Payments offered by the companies their
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2 - Research on Benefit Sharing of Energy Service Contracting Project Based on Bargaining Game Theory Dong Qian, School of Management, Xian Jiaotong University, Box 2230, Xian Jiaotong University, XIAN, China, qd.2009@stu.xjtu.edu.cn, Jie Xiong, Jue Guo
This paper develops a bargaining model to analyze the benefit sharing between ESCO and the energy using organization in energy service contracts with shared savings structure and provide the equilibrium strategies under three situations. We also discuss the effects of parameters in the benefit function on the benefit sharing.
2 - Fraud and Social Networks Erik Rolland, Professor, University of California-Riverside, Department of Accounting and IS, Graduate School of Management, Riverside, CA, United States of America, erik.rolland@ucr.edu, Dmitry Zhdanov, Ram Gopal, Ray Patterson
We investigate the impact of social networks on fraud detection. We utilize mathematical programming to abstract the problem of fraud detection, and show its equivalence to a well known NP-complete problem. We demonstrate the methodology by using an actual fraud case, and discuss and analyze potential paths to finding the correct set of perpetrators that logically explains how the fraud was committed.
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Mixed-integer Programming Problems in the Power Grid

Chair: Daniel Bienstock, Columbia University, 342 S. W. Mudd Building, 500 W. 120th Street, New York, NY, 10027, United States of America, dano@columbia.edu 1 - Designing Electric Power Grids to Minimize Cascading Blackouts Jeff Linderoth, University of Wisconsin-Madison, Department of Industrial and Systems Engineering, & Department of Computer Sciences, 1513 University Avenue, 3226 Mechanical Engineering Bldg., Madison, WI, 53706-1572, linderoth@wisc.edu, Eric Anderson, Daniel Bienstock
If an exogenous event impacts the operating characteristics of an electric power grid, power flows reroute themselves according to the laws of physics. The rerouted flows may cause lines to become overloaded, setting off stages of additional line failures, resulting in a cascading blackout. We discuss a optimization-based approaches for designing power grids to minimize the impact of cascades caused by line outages.
Statistics and Quality Control I

Contributed Session
Chair: Shilpa Shinde, Arizona State University, 1249 E. Spence Avenue Apt# 238, Tempe, AZ, 85281, United States of America, shilpa.shinde@asu.edu 1 - A Synthesis of Feedback and Feedforward Control for Stationary and Nonstationary Disturbance Models Lihui Shi, PhD candidate, University of Washington, Industrial and Systems Engineering, University of Washington, Seattle, WA, 98105, United States of America, shilihui@uw.edu, Kailash Kapur
Feedforward control strategy is applied to combine with feedback control for process adjustment to maintain the process on target value. A periodic variance shift disturbance model is proposed, with integrated moving average, autoregressive and autoregressive moving average as background disturbance models. We evaluate the performance of different control strategies for each disturbance model, by using the mean square error criterion. Sensitivity analysis and robustness analysis are conducted.
LATE CANCELLATION
We present an adaptive sequential Bayesian methodology for response surface optimization (ASBRSO) for industrial experiments with high experimentation cost, and sampling variability. The ASBRSO employs the information from the previous experiments to design the subsequent experiment by simultaneously reducing the region of interest and identifying factor combinations for new experiments. Through extensive simulated experiments we examine the performance of the proposed method.
2 - AC Optimal Transmission Switching Thomas Dautel, Economist, Federal Energy Regulatory Commission, 888 1st St NE, Washington, DC, 20426, United States of America, Thomas.Dautel@ferc.gov, Richard ONeill
When solving the AC optimal transmission switching problem, switches at both ends of each transmission line must be considered in order to achieve all potential benefits. We present a problem formulation and data on small cases, and discuss some potential benefits and concerns associated with the AC optimal transmission switching problem.
2 - An Adaptive Sequential Bayesian Methodology for Process Optimization Adel Alaeddini, Post Doctorate Researcher, University of Michigan, 1205 Beal Avenue, Ann Arbor, MI, 48109, United States of America, alaedini@umich.edu
3 - Probabilistic Distance to Failures in Power Grids Michael Chertkov, Theory Division & Center for Nonlinear Studies at LANL, Los Alamos, NM, United States of America, m.chertkov@gmail.com
In this talk we review recent work at Los Alamos on algorithms and analysis of probabilistic measure of failures in power grids associated with fluctuations of distributed consumption/generation and exogenous changes in the grid topology.
3 - Identifying the Time of a Step-Change in a Multivariate Process Mean Gary Mercado, University of Alabama, Box 870226, Tuscaloosa, United States of America, grmercadovelasco@crimson.ua.edu, Marcus Perry
Knowing when a process has changed would simplify the search for and identification of the special cause. In this talk, we propose a kernel maximum likelihood estimator for the time of a step-change in a multivariate process mean when the observations are not required to follow a multivariate normal distribution. The results show that the estimator provides process engineers with an accurate and useful estimate of the actual time of the change in the process mean.
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Energy
Contributed Session
Chair: Raza Rafique, PhD Student, Rutgers Business School, 123 Sussex Street, Harrison, NJ, 07029, United States of America, rrafique@pegasus.rutgers.edu 1 - A Multiple Period Stochastic Coal Transportation and Inventory Model Serkan Gunpinar, Doctoral Student, Industrial and Management Systems Engineering, University of South Florida, Tampa, FL, 33620, United States of America, sgunpina@mail.usf.edu, Long Zhao, Bo Zeng
Coal is one of the most important fuels in US energy industry where most coal is delivered by rail and barge. As coal demand is determined by electricity demand, which is very random, we build a multiple stage stochastic programming model to deal with coal transportation and inventory issue. Progressive hedging algorithm is applied and computational results will be presented.
4 - Analysis Methods for Non Regular Fractional Factorial Designs Shilpa Shinde, Arizona State University, 1249 E Spence Avenue Apt# 238, Tempe, AZ, 85281, United States of America, shilpa.shinde@asu.edu, Bradley Jones, Douglas Montgomery
During the initial stages of experimentation, there are usually a large number of factors to be investigated. Fractional factorial (Regular and Non Regular) designs are particularly useful during this initial screening phase of experimental work. Stepwise regression is one of the most commonly used analysis methods to analyze these screening designs. This paper presents new methods based on stepwise regression which perform better than the standard stepwise regression method.
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Behavioral Operations
Contributed Session
Chair: Wei Huang, Associate Professor, Huazhong University of Science & Technology, Department MS & IM, School of Management, WuHan, 430074, China, whuang@mail.hust.edu.cn 1 - Business Process Management for a Newsvendor Adam Fleischhacker, Assistant Professor of Operations Management, University of Delaware, 222 Alfred Lerner Hall, Newark, DE, 19716, United States of America, ajf@udel.edu
Upon implementing a new quantitatively driven business process, one quickly discovers that human decision makers will systematically make sub-optimal decisions within that process. Thus, to truly solve the problems faced by practitioners, mathematical models are simply one component of the solution. Using a newsvendor application as motivation, we propose a business process management methodology to bridge the gap between models that seek optimality and models that are implementable.
inventory, and sourcing considerations as well as a fully recursive bill of materials for the products and backorder penalties for late deliveries. Numerical experience with solving this model for various cases including a real-world problem instance, is shared. The impact of various cost functions for the backorder penalties is illustrated.
2 - Metaheuristic Solution Algorithms for a Four-layer Location-routing Problem Mohsen Hamidi, North Dakota State University, Industrial & Manufacturing Engineering, NDSU Department 2485, Fargo, ND, 58108-6050, United States of America, Mohsen.Hamidi@my.ndsu.edu, Kambiz Farahmand, S. Reza Sajjadi, Kendall Nygard
The location-routing problem (LRP) simultaneously considers location, allocation, and vehicle routing decisions to design optimal distribution networks. In this research, metaheuristic solution algorithms for solving a complex fourlayer LRP are developed. The four-layer LRP represents a multi-product distribution network consisting of plants, central depots, regional depots, and customers. The LRP integrates location, allocation, vehicle routing, and transshipment problems.
2 - Supplier Capability Evaluation: Attribute Substitution and Capability Inference David Hall, PhD Student, Clemson University, 101 Sirrine Hall, Clemson, SC, 29634, United States of America, davidcalebhall@gmail.com, Aleda Roth, M. Johnny Rungtusanatham
Supplier evaluation is an antecedent to supplier selection. Information asymmetry exists between the evaluator and potential supplier. The supplier has incentives to not share information. Nonetheless, the evaluator must judge the potential suppliers capabilities. We empirically examine how and what the evaluator judges supplier capabilities under these conditions.
3 - A Capacitated One Warehouse Multi-Retailer Lot-Sizing Problem Burcu Keskin, University of Alabama, 361 Stadium Dr., Tuscaloosa, AL, 35406, United States of America, bkeskin@cba.ua.edu, John Mittenthal
In this paper, we study a capacitated lot sizing problem (CLSP) for a one warehouse multi-retailer system. Even though the CLSP has been studied in the production context, it has limited coverage in a distribution context. We present a formulation of this problem and investigate the structural properties of the optimal solution. We also develop mathematical programming-based and greedy heuristics. Numerical analysis demonstrates the effectiveness of the solutions in different settings.
3 - Inventory Control when Selling to Human Newsvendors Jin Kyung Kwak, Cornell University, 201 Sage Hall, Ithaca, NY, 14853, United States of America, jkk37@cornell.edu, Yusen Xia, Young-Hoon Park, Srinagesh Gavirneni
We develop inventory control strategies for a supplier who sells a product to human newsvendors. Recent behavioral research revealed significant tendencies in the decision making processes of human newsvendors. If the supplier would incorporate these behavioral tendencies while managing her inventories, her costs would be significantly reduced. Using data from our own experiments, we estimate the possible reductions in supplier costs and determine the factors that significantly impact it.
4 - A Two-stage Stochastic Programming Model for Transportation Infrastructure Design and Retrofit Shahrzad Azizzadeh, PhD Candidate, North Carolina State University, 346 Daniels Hall, Raleigh, NC, 27695, United States of America, sazizza@ncsu.edu, Ranji Ranjithan
Natural hazards often disrupt critical lifeline services supported by the transportation infrastructure. A two-stage stochastic programming model is presented to optimize system capacity and recourse decisions considering service demands and many failure scenarios. Two mixed-integer formulations are discussed and an L-shaped decomposition solution approach is presented.
4 - Credibility Analysis of Online Product Reviews Based on Elaboration Likelihood Model Wei Huang, Associate Professor, Huazhong University of Science & Technology, Department MS & IM, School of Management, WuHan, 430074, China, whuang@mail.hust.edu.cn, HaiXia Cui, Shu Li
Our study analyzes the effecting factors and influence paths of credible online product reviews by using the elaboration-likelihood model. Firstly, we classifies influence mechanisms or routes into central and peripheral types based on the type of information processed by a reviewer. Secondly, we explains circumstances under which that users of online product reviews may be more influenced by a path. Our study can also help design the credibility evaluation model of online product reviews.
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Single-mode Freight Transportation

Contributed Session
Chair: Mona Kashiha, PhD Student, UNC Charlotte, 9201 University City Blvd, Charlotte, NC, 28223, United States of America, mkashiha@uncc.edu 1 - Application of Pickup and Delivery Problem in Air-cargo Routing with Alternative Access Airport Farshid Azadian, PhD Candidate, Wayne State University, 4815 Fourth st, Detroit, MI, 48202, United States of America, f_azadian@wayne.edu, Alper Murat, Ratna Chinnam
This research provides a routing algorithm for handling customers order in a multiple airport region, benefiting from the alternative access airport policy. We introduce a mixed integer model for the problem and present the solution algorithm based on Lagrangian decomposition and successive sub-problem solving.
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Integrated Models for Supply Chain and Logistics Planning

Chair: Aly Megahed, PhD Student, Research and Teaching Assistant, H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, GA, 30332, United States of America, aly@gatech.edu 1 - A Comprehensive Tactical Supply Chain Planning Model Using Backorder Penalties Aly Megahed, PhD Student, Research and Teaching Assistant, H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, GA, 30332, United States of America, aly@gatech.edu, Marc Goetschalckx
We present a comprehensive model for the tactical planning of multi-echelon, multi-commodity supply chains. The model includes production, transportation,
2 - Air-cargo Consolidation Problem with Pivot Weight Zichao Li, University of Waterloo, 200 University Avenue West, Waterloo, ON, N2L 3G1, Canada, z72li@uwaterloo.ca, James H. Bookbinder, Samir Elhedhli
In the international air cargo business, customers are charged in the following ways when they tender containers to the airline: if total weight is under the pivot weight, shipment is charged at the under-pivot rate; each kg above the pivot weight is charged at the over-pivot rate. We study the optimal air-cargo loading decision under the above pivot-weight scheme. We propose solution methodologies using local branching and heuristics.
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3 - Cargo Prioritizatio for Inland Waterway Disruptions Jingjing Tong, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, United States of America, tong@uark.edu, Heather Nachtmann
In an ongoing project Supporting Secure and Resilient Inland Waterways funded by Department of Homeland Security, we are developing a prototype decision support system to provide timely knowledge of what cargo should be prioritized for offloading and what infrastructure exhibits low resiliency in the event of a catastrophic disruption on the inland waterway transportation system. Our presentation focuses on the cargo prioritization factors that have been identified to support this research.
Progress in Data Mining Techniques

Contributed Session
Chair: Chaojiang Wu, PhD candidate, University of Cincinnati, 2925 Campus Green Drive, Cincinnati, OH, 45220, United States of America, wuca@mail.uc.edu 1 - High-dimensional Data Clustering by Controlling Decision Errors Chi-Hyuck Jun, Professor, POSTECH, Industrial & Management Eng., San 31 Hyoja-dong, Pohang, 790784, Korea, Republic of, chjun@postech.ac.kr, Hae-Sang Park, Jeonghwa Lee
Assuming that significant objects follow Gaussian mixture model, the parameters are estimated from the EM algorithm. Then, multiple hypothesis testing is established and the positive false discovery rate as the decision error is estimated. We proposed a soft clustering method that combines principal component analysis and applied to several synthetic data and some real data.
4 - Competition Space in Commodity Flows Bound for the United States Mona Kashiha, PhD Student, UNC Charlotte, 9201 University City Blvd, Charlotte, NC, 28223, United States of America, mkashiha@uncc.edu, Jean-Claude Thill
Examination of the structure and pattern of commodity flows is a major focus of transportation studies. This research provides geovisualization of a large spatial interaction dataset by combining decision tree techniques and social network concepts. Commodity flow data in this project is compiled from the PIERS database of waterborne import shipments to the United States.
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2 - Intrinsic Dimensionality Using Non-linear Dimension Reduction Techniques Ya Ju Fan, Postdoc Researcher, Lawrence Livermore National Laboratory, 7000 East Avenue, P.O. Box 808, L-560, Livermore, CA, 94551, United States of America, fan4@llnl.gov, Chandrika Kamath
Many nonlinear dimension reduction (NLDR) methods have been proposed to discover the intrinsic, low-dimensional structure in a high dimensional input space. However, determining critical features in data sets that consist of a large number of features is still a challenge. Using both synthetic and real-world data sets, we present a comparison of different NLDR techniques and discuss the insights they provide on the intrinsic dimensionality.
Simulation Optimization
Chair: Enlu Zhou, Assistant Professor, University of Illinois at Urbana-Champaign, Urbana, IL, United States of America, enluzhou@illinois.edu 1 - Simulation Optimization over Discrete Sets with Noisy Constraints Eunji Lim, University of Miami, 281 McArthur Bldg, Coral Gables, FL, United States of America, lim@miami.edu, Yao Luo
We consider a simulation-based optimization problem where the decision variables are discrete and only noisy measurements of the objective and constraints are available. We propose a method that solves the dual of the original problem using a gradient-based approach. Numerical examples illustrate the effectiveness of the proposed method.
3 - Accelerated Support Vector Machines for Bioinformatics Hugh Smith, Senior Performance Engineer, PG@E, 3725 Barrington Drive, Concord, United States of America, netizena2003@yahoo.com
The field of Bioinformatics generates high volumes of complex high dimensional data. The use of Support Vector Machines(SVM) to process this data requires significant computer processing power. This paper discusses various software and hardware methods to accelerate SVM processing.
2 - On Interior-point Based Retrospective Approximation Methods for Solving Two-stage Stochastic Linear Programs Raghu Pasupathy, Virginia Institute of Technology, 250 Durham Hall, Blacksburg, VA, 24061, United States of America, pasupath@vt.edu, Soumyadip Ghosh
We present an interior-point based retrospective approximation framework for solving general two-stage stochastic linear programs. A sequence of convex approximations of the underlying problem are generated and solved with increasing accuracy. The resulting solutions are shown to converge with probability one. A detailed analysis of the complexity of the framework sheds light on how much relative effort should be expended on generating the convex approximations versus their solution.
4 - Robust Multi-Kernel Classification of Uncertain and Imbalanced Data Raghav Pant, PhD Candidate, University of Oklahoma, School of Industrial Engineering, 202 W. Boyd, Room 124, Norman, OK, 73019, United States of America, rpant@ou.edu, Theodore Trafalis, Kash Barker
In SVM classification, data uncertainty is not generally addressed efficiently. Uncertainty can often be found in rare events, where added difficulty of imbalanced data exists. In this study we developed a robust SVM approach of classifying imbalanced and noisy data. We formulate the classification as a semidefinite programming problem and develop its robust counterparts under bounded data uncertainties, including multiple kernels for handling the data and investigate the robust formulations.
3 - Guided Stochastic Search for Global Optimization Enlu Zhou, Assistant Professor, University of Illinois at Urbana-Champaign, Urbana, IL, United States of America, enluzhou@illinois.edu, Jiaqiao Hu
Many stochastic search algorithms carry out the following two steps iteratively: sample candidate solutions from a parameterized distribution on the solution space; update the parameter of the distribution using the candidate solutions. We propose to incorporate a quasi Newtons method and an ExpectationMaximization (EM) type method to guide the updating of the parameter of the distribution, effectively combining the faster convergent gradient-type search with the more global stochastic search.
5 - Partially Linear Modeling for Conditional Quantiles Chaojiang Wu, PhD Candidate, University of Cincinnati, 2925 Campus Green Drive, Cincinnati, OH, 45220, United States of America, wuca@mail.uc.edu, Yan Yu
To overcome the curse of dimensionality yet retain model flexibility, we propose two partially linear models for conditional quantiles with high dimensional covariates. An approximate iteratively reweighted least square algorithm and effective model degrees of freedom are developed for model comparisons. Two smoothing parameter selection criteria are investigated. Some asymptotic and finite sample properties are studied. A real data application demonstrates the success of proposed approach.
4 - On Stochastic Gradient and Subgradient Methods with Adaptive Steplength Sequences Farzad Yousefian, PhD Candidate, University of Illinois Urbana-Champaign, 117 Transportation Bldg., 104 S. Mathews Avenue, Urbana, IL, 61820, United States of America, yousefi1@illinois.edu, Angelia Nedich, Uday Shanbhag
We present two adaptive steplength stochastic approximation (SA) schemes for stochastic convex programming. The first scheme optimizes the error bounds to derive a recursive steplength update rule. The second scheme decreases the steplength at epochs related to the meeting of a suitable error requirement. Nonsmooth extensions are addressed through local smoothing techniques. Preliminary numerical results suggest that the schemes perform well compared to standard SA implementations.
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WD54
Alternative Dispatching Methods for Freight Transportation

Chair: Sarah Root, Assistant Professor, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, AR, 72701, United States of America, seroot@uark.edu 1 - Algorithms and Optimization Models for Truckload Relay Network Design Hector Vergara, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, AR, 72701, United States of America, hvergara@uark.edu, Sarah Root
Driver retention is a significant problem for full truckload carriers operating on a Point-to-Point dispatching method. Alternatively, dispatching under a network configuration of relay points can be used to improve driver retention due to a reduction in driver tour lengths. We propose a new mathematical formulation for strategic relay network design that minimizes total costs while considering operational constraints such as load circuity and driver tour length within the variable definition.
2 - Facility Location Model: A Robust Optimization Approach Bo Zeng, Assistant Professor, University of South Florida, Tampa, FL, 33647, United States of America, bzeng@usf.edu, Long Zhao, Yu An
We consider a facility location problem with disruptions. A robust optimization model is constructed and solved using an algorithm with primal information. Numerical results will be presented and discussed.
3 - Competitive Hub Location and Pricing Problem Armin Ler, Graduate Student, Pontificia Universidad Catolica de Chile, Department of Electrical Engineering, Chile, arminluer@gmail.com, Vladimir Marianov
We formulate and solve the hub location and pricing problem using a metaheuristic. A new company tries to maximize its net benefit, capturing flows from an incumbent that operates a hub and spoke network. We use a Logit model to explain the clients behavior.
4 - Gamma-robust Facility Relocation Problem (Gamma-RFRP) Ayse Durukan Sonmez, PhD Candidate, University of Houston, Department of Industrial Engineering, E224 Engineering Building 2, Houston, TX, 77204, United States of America, adurukan@uh.edu, Gino J. Lim
Gamma-RFRP considers facility relocation by closing existing facilities and opening new ones, where demand changes are represented by different scenarios with known probabilities. We develop a mixed integer programming model that minimizes the expected weighted distance while the regret for each scenario is forced to be less than gamma. We develop a Lagrangean Decomposition Algorithm that produces fast and good quality solutions. Numerical experiments compare the performance of both methods.
2 - A Lagrangean Decomposition Approach for Capacitated Relay Network Design Halit Uster, Texas A&M University, 241 Zachry, 3131 TAMU, College Station, TX, 77840, United States of America, uster@tamu.edu, Panitan Kewcharoenwong
Motivated by its applications in Less-than-Truckload (LTL) and Truckload (TL) transportation, we consider a relay network design problem with generalized capacity and load imbalance requirements. We develop an efficient solution approach based on Lagrangean decomposition and present computational results illustrating the performance of the algorithm.
WD54
3 - Creative Dispatching in Truckload Trucking Don Taylor, Gordon Professor and Department Head, Virginia Tech, Grado Department of ISE, 250 Durham Hall (0118), Blacksburg, VA, 24061, United States of America, don.taylor@vt.edu
In this presentation, the author presents several alternatives to traditional dispatching in truckload trucking. The goal of these various alternatives is to improve the quality of life for professional drivers while keeping the trucking company profitable and the customer happy. With improved dispatching systems in place, current research is focused on the achievement of higher profitability without degradation of the improved dispatch function.
Joint Session Analytics/CPMS: Financial Risk Management in Practice

Chair: Wei Chen, Analytical Solutions Manager, SAS, SAS Campus Dr., Cary, NC, United States of America, wei.chen@sas.com 1 - Using Efficient Monte Carlo Simulation in Counterparty Credit Risk Estimation of OTC Derivatives Samim Ghamami, Quantitative Analyst, Barclays Capital, 745 7th Avenue, New York, NY, United States of America, ghamami@usc.edu, Bo Zhang
OTC derivative products are subject to counterparty credit risk. A typical counterparty risk engine in a financial institution measures counterparty credit exposure based on Monte Carlo simulation. We present efficient Monte Carlo procedures for estimating potential future exposure (PFE) and expected exposure (EE); these are two of the most commonly used counterparty risk measures in the financial industry.
4 - Load Plan Improvement through IP Based Local Search Kathleen Lindsey, Georgia Institute of Technology, 765 Ferst Drive, NW, Atlanta, GA, 30332-0205, United States of America, kate.abercrombie@gatech.edu, Alan Erera, Martin Savelsbergh
We develop an integer programming based local search improvement method for a service network design problem faced by less-than-truckload (LTL) freight transportation carriers. The technique uses a time-space network to realistically model consolidation opportunities, while simultaneously evaluating loaded freight and empty trailers. This approach finds significant cost savings for largescale LTL networks seen in practice.
2 - A New Risk Assessment Framework for Asset-backed Securities (ABS) Sunny Zhang, Senior Risk Consultant, SAS, 100 Campus Drive, Cary, NC, 27513, United States of America, Sunny.Zhang@sas.com
This paper introduces a new analytical framework that has implications for loan securitization. This framework better serves loan originators and investors by providing more accurate risk assessment and greater consistency and transparency. It promotes standardization of the asset pooling process and definitions, and affords to easily compare, rank, monitor and report loan pool performance across securities. As a result, cash flows and their associated uncertainties can be better quantified.
WD52
Models and Algorithms for Facility Location

Contributed Session
Chair: Ayse Durukan Sonmez, PhD Candidate, University of Houston, Department of Industrial Engineering, E224 Engineering Building 2, Houston, TX, 77204, United States of America, adurukan@uh.edu 1 - A Reliable Facility Location Model with Economies of Scale Yu An, University of South Florida, 4202 Fowler Avenue, Tampa, FL, United States of America, yan2@mail.usf.edu, Bo Zeng, Yu Zhang
We consider a reliable facility location model with economies of scale, i.e. the unit service cost is a function of the service volume. A mixed integer nonlinear model is proposed and numerical study will be presented.
3 - Copula and Risk Aggregation Jack Yang, Financial Solution Specialist, SAS Institution Inc., Cary, NC, 27513, United States of America, jack.yang@sas.com, Wei Chen
Risk aggregation is getting popula in financial risk management espcially in enterprise risk management. This presenation reviews types of copula and the advantages of using copula over other tools in risk aggregation and how it is related to the popula tail risk measures.
425
WD55 WD55

4 - Radiation Dose Reduction for Critical Organs in Interventional Radiology Procedures Yasaman Khodadadegan, PhD Student, Arizona State University, 1249 E., Spence Avenue, Apt 336, Tempe, AZ, 85281, United States of America, ykhodada@asu.edu, Muhong Zhang, Teresa Wu, William Pavlicek
Long interventional radiology procedures may result in high exposures leading to cancer induction for critical organs of the body. Variation of geometry parameters and x-ray energy setup changes the amount of absorbed radiation in the organs as well as image quality. A mixed-integer programming model is proposed to provide initial setup for each exam to minimize dose and satisfy image quality. Branch and cut method is discussed.
Joint Session Analytics/CPMS: Forecast Value Added Analysis

Chair: Michael Gilliland, Product Marketing Manager, SAS Institute, SAS Campus Drive - C5234, Cary, NC, 27513, United States of America, Mike.Gilliland@sas.com 1 - Forecast Value Added Analysis: Case Studies Michael Gilliland, Product Marketing Manager, SAS Institute, SAS Campus Drive - C5234, Cary, NC, 27513, United States of America, Mike.Gilliland@sas.com
FVA is defined as the change in a forecasting performance metric that can be attributed to a particular step or participant in the forecasting process. Organizations are using FVA analysis to identify waste in the forecasting process (activities that are failing to improve the forecast, or are making it worse). This session includes an overview of the FVA methodology, along with case studies from organizations that have applied this method.
WD57
Optimization Models for Airline Crew Rostering and Crew Pairing

Chair: Wenwei Cao, Georgia Institute of Technology, 765 Ferst Dr NW, Atlanta, GA, United States of America, cww@gatech.edu 1 - Post Optimize Techniques for Airline Crew Rostering Problem Yu Yu, Operations Research Analyst, Sabre Airline Solutions, No.555 Loushanguan Road, Metro Plaza, Suite 1608, Shanghai, 200051, China, yu.yu@sabre.com
Solution time and quality are crucial aspects for big sized Crew Rostering problem. Classic solution approach for the problem is to get initial assignments by heuristics and then improve the solution quality by Post Optimize (PO) techniques. We propose here two PO methods, a generalized Local Search and a subproblem optimize method. Test results show that both of the methods can support each other well and improve the solution quality efficiently.
2 - Applying Forecast Value Added at Newell Rubbermaid Ryan Rickard, Sr. Supply Chain Manager, Newell Rubbermaid, 3 Glenlake Parkway, Atlanta, GA, 30328, United States of America, ryan.rickard@newellco.com
A key area of focus is improving Forecasting, and Forecast Value-added Analysis (FVA) serves as a key tool to increase Forecast Accuracy while optimizing forecasting resources. This session will focus on how FVA is used to improve Demand Planning and overall Supply Chain performance.
WD56
Therapy and Treatment Issues in Health Care

Contributed Session
Chair: Yasaman Khodadadegan, PhD Student, Arizona State University, 1249 E., Spence Avenue, Apt 336, Tempe, AZ, 85281, United States of America, ykhodada@asu.edu 1 - Evolution-Based IMRT Planning Arkajyoti Roy, Purdue University, 315 N. Grant Street, West Lafayette, IN, 47906, United States of America, roya@purdue.edu, Omid Nohadani
Typical IMRT plans are optimized for static tumors. However, temporal changes in shape can degrade the outcome. We propose a model that incorporates the tumor evolution during the course of the treatment. This allows dose escalations leading to potentially higher survival rates. We show the advancement based on a clinical case.
2 - Integrating Assignment Requirements Into Airline Crew Pairing Optimization Michael Rmer, Martin Luther University of Halle-Wittenberg, Universittsring 3, Halle, 06108, Germany, michael.roemer@wiwi.uni-halle.de, Taeb Mellouli
In order to enhance the airline crew scheduling process, we integrate requirements from crew assignment into crew pairing optimization. Our flowbased model uses a state expanded network to represent pairing chains at multiple domiciles. Consistency with rest requirements and preassignments is enforced by employing the novel concept of availability blocks. Results from experiments with real world data from a medium-sized European airline show that the approach is advantageous and tractable.
3 - Long-term Crew Rostering and Integration in Fractional Airlines Wenwei Cao, Georgia Institute of Technology, 765 Ferst Dr NW, Atlanta, GA, United States of America, cww@gatech.edu
Due to the dynamic nature of fractional jet operations, most crew planning efforts are limited by a time frame of one to three days. However, higher charter, reposition, and training costs may result from crew pair and crew-aircraft mismatches on an annual roster. We build several integer programming models to support roster generation through sequential planning stages. Beyond that we investigate the effect of integrating the sequential stages by developing a model that incorporates seniority rules and a solution approach based on branch-andprice. Practical usefulness of the framework is demonstrated in numerical results and a posteriori analysis of the scenarios that are most interesting to the management.
2 - Managing Uncertainties in Radiosensitivity in Cancer Therapy Omid Nohadani, Assistant Professor, Purdue University, 315 N. Grant Street, Grissom Hall, West Lafayette, IN, 47907, United States of America, nohadani@purdue.edu
The response of the tissue to external ionizing radiation changes during the course of the treatment, particularly when radiotherapy is combined with chemotherapy. We present a method that exploits these changes to the benefit of the patient by optimizing the plan respective to predictive changes. Quantitative advantages are demonstrated on a clinical IMRT case.
3 - Predicting Response to Citalopram Based on a New Boosted CART Algorithm Manaf Zargoush, ESSEC, 3445, Apt 301, Hutchison Street, Montreal, QC, H2X 2G2, Canada, zargoush@gmail.com, Farrokh Alemi
We develop a variant of Boosted Classification And Regression Tree algorithm, called Binary Boosted CART, to predict patients response to Citalopram, a common antidepressant. We do so using genetic data as the input to our algorithm.
426

WD60
Topics in Homeland Security

Chair: Hiram Moya, PhD, Texas A&M University, 2807 Henry Ct., College Station, TX, 77845, United States of America, hiram@tamu.edu 1 - Border Crossing Modeling & Analysis A Variance Reduction Policy Within Dynamic Reallocation Hiram Moya, PhD, Texas A&M University, 2807 Henry Ct., College Station, TX, 77845, United States of America, hiram@tamu.edu
The U.S. international land boundary is a volatile, security intense area. In 2009, NAFTA trade was $735 billion, with 80% transported by commercial trucks. The specific problem is finding a balance between a reduction wait time and its variance. In conjunction with a Dynamic Reallocation Methodology of primary inspection, applying a variance reduction policy based on the use of secondary inspections will eliminate time outliers and reduce wait time without affecting security procedures.
3 - Network Reliability under Targeted and Random Failures Seth Guikema, Assistant Professor, Johns Hopkins University, 3400 N. Charles St., Ames Hall, Baltimore, MD, 21218, United States of America, sguikema@jhu.edu, Sarah LaRocca
In this paper, we generate a large set of random networks encompassing a wide range of sizes and topological characteristics representative of real-world networks, such as the internet. We then evaluate the reliability of each network under both targeted and random element failures. These scenarios represent both natural (random) and man-made (targeted) hazards to infrastructure systems. This paper provides an understanding of the effect of network characteristics on systems reliability.
4 - Impact of Organizations Networking Structure on Innovative Performance Fethullah Caliskan, University of South Florida, 4202 E. Fowler Avenue, ENB118, Tampa, FL, 33620, United States of America, fcaliska@mail.usf.edu, Kingsley A. Reeves, Ozan Ozcan
Our aim is to assess the impact of supply chain and alliance networking structures on innovation performance. We focused on Floridas high tech industries taking the number of patents as our dependent variable. It is hypothesized that clustering, reach and their combination, clusteringXreach have positive impact on and regions innovativeness. A parallel simulation model is supposed to help policy makers decide where to invest in the development of ties within networks to spur innovation.
2 - Selection of Effective Protection Systems for Electric Power Systems Against Terrorist Attacks Vanlapha Santithammarak, PhD Candidate, Texas Tech University, Department of Industrial Engineering, Lubbock, TX, 79409, United States of America, vanlapha.santithammarak@ttu.edu, Milton Smith
Nowadays, terrorist attacks are a top concern to weaken the economy since 9/11. Electric power systems should be regarded as likely targets of terrorists because of the reliance upon electric power in all economic activities. The objective of this study is to evaluate and select effective methods to protect against physical attacks on power systems.
5 - Hyper-networking Drives New Service Business Designs Cheng Hsu, Professor, Rensselaer Polytechnic Institute, 5123 CII, RPI, 110 8th Street, Troy, NY, 12180-3590, United States of America, hsuc@rpi.edu
One thing describes the technical nature of e-commerce, social networking, and the convergence of products and services as represented by the iPad: the hypernetworking of customers, providers, and resources in value co-creation. This hyper-networking model also applies to many human activities on physical habitats as well as in cyberspace. A formal analysis provides new insights into service value networks and leads to a model of micro-economic production functions.
WD59
WD60
Service Science and Network Science

Chair: Cheng Hsu, Professor, Rensselaer Polytechnic Institute, 5123 CII, RPI, 110 8th Street, Troy, NY, 12180-3590, United States of America, hsuc@rpi.edu 1 - A Semi-Markov Decision Problem for Proactive and Reactive Transshipments between Multiple Warehouses Arkadi Seidscher, University of Vienna, Brnner Strae 72, Vienna, 1210, Austria, arkadi.seidscher@univie.ac.at, Stefan Minner
We investigate the benefits of proactive over different reactive transshipment rules depending on the design of the distribution network, cost parameters, and demand and supply parameters in a multi-location inventory system. The problem is formulated as a Semi-Markov decision process. We find that the benefits of proactive transshipments are the largest for networks with intermediate opportunities of demand pooling and that the difference between reactive transshipment rules is negligible.
Linear Optimization: Algorithms and Applications

Contributed Session
Chair: Roland Wunderling, CPLEX Architect, IBM, Annenstrasse 9, Graz, 8020, Austria, roland.wunderling@at.ibm.com 1 - A Modified Perceptron Algorithm for Linear Programming Negar Soheili, Tepper School of business, CMU, 5000 Forbes Avenue, Pittsburgh, United States of America, nsoheili@andrew.cmu.edu, Javier Pea
The perceptron algorithm for solving the linear programming feasibility problem has attracted research attention due to its simplicity and popularity in the machine learning community. A main limitation of this algorithm is its slow convergence rate. We develop a modified version of the perceptron algorithm that retains the original simplicity but with substantially improved convergence rate.
2 - Linear Programming - A Forgotten Art? Roland Wunderling, CPLEX Architect, IBM, Annenstrasse 9, Graz, 8020, Austria, roland.wunderling@at.ibm.com
Solving LP has long be taken for granted as MIP has taken center stage. However, in the past few years the demands on Linear Programming solver have caught up and we encounter more and more problem instances of huge dimensions. We will discuss these new types of issues and how CPLEX approaches then.
2 - Sourcing Strategies and Network Structure: A Network Theory Analysis of Global Sourcing Steven Carnovale, Rutgers University-Rutgers Business School, 1 Washington Park, Room 1057B, Newark, NJ, 07102, United States of America, scarnova@pegasus.rutgers.edu, Sengun Yeniyurt
The paper focuses on the development of a framework of global sourcing using network theory. We review the literature and formulate theoretic hypotheses regarding the effects said framework for a firms global sourcing strategy. Network theory constructs (centrality, transitivity, structural holes, and structural embededness) are explored. Specific network-theoretic hypotheses are developed regarding the effect of network structure on the likelihood of a new sourcing relationship being created.
3 - Analysis and Modeling of Attributes Affecting Retention and Satisfaction Rates in an Online Learning Javad Seyed, Adjunct Professor, American Public University, 1933 Amity Hill Court, Raleigh NC 27612, United States of America, javad.seyed@mycampus.apus.edu, SIchong Guan, Michael Miner, William Owen
In this study, the research team will address two key challenges in the delivery of online programs: Retention and satisfaction rate. In order to address these challenges, a quantitative linear mathematical model for optimization will be introduced that provides a holistic analysis of the attributes affecting retention and satisfaction rates.
427
WD61 WD61

2 - An Optimal Energy Management System for Microgrid Considering the Load Control SooJeong Choi, student, Yonsei University, Room 610, DaeWoo Hall, 50 Yonsei-ro, Seodaemun-gu, seoul, 120-749, Korea, Republic of, crystal0208@yonsei.ac.kr, Sunju Park
This paper presents an optimal operation model for Microgrid which consists of small generators, storage devices, and manageable loads. The Mixed Integer Programming is used. The model incorporates diverse electricity load types to efficiently induce demand response as ensuring the stability for Microgrid. The evaluation shows that the proposed model works well compared to the unscheduled operation plan as increasing demand elasticity and decreasing total operation cost.
Design Issues
Contributed Session
Chair: Lars Backker, Ph.D. Student, Linkping University, Bredgatan 33, Norrkping, 602 21, Sweden, lars.backaker@liu.se 1 - Managing Capacity for Mixed Fast Passenger and Heavy Freight Services Bo-Lennart Nelldal, Adj. Professor, KTH Railway Group, Div. of Transport and Logistics, Stockholm, SE-100 44, Sweden, bo-lennart.nelldal@abe.kth.se, Oskar Froidh
Differences in train speed consume capacity. For strategic development of rail systems, analyses have been carried out by simulation for some Swedish main lines. Short distances between crossing stations on single-track lines is essential. For double-track lines, there are a number of different measures to overcome the main problem of catching up slower trains, which includes overtaking, increased speeds for slow trains, heavier freight, or timetable measures.
3 - Mitigating Supply and Demand Variability Within the Electrical Grid Using Energy Storage Doug Carmichael, Graduate Student, University of Colorado, 4882 Hopkins Place, Boulder, CO, 80301, United States of America, Robert.Carmichael@colorado.edu, Stephen Lawrence
It is very difficult to design and operate an efficient and robust electrical grid that meets peak demands. This is due to high variability of energy demand, as well as the variability inherent in certain energy production sources. In order to mitigate this variability, energy storage technologies are increasingly being used. In this presentation, various grid configurations are analyzed in order to define the best strategies for deployment of energy storage under different circumstances.
2 - Research on High-Speed Rail Cost Recovery Based on Multinomial Logit and Linear Optimization Models Shoupeng Tang, The University of Texas at Austin, 1 University Station, C1761, Austin, United States of America, stang@mail.utexas.edu
Two multinomial logit models (MNL) will be built which depict mode choice behaviors before and after HSR operation respectively. Searching the minimum time that the cost of constructing and operating a High-Speed Rail (HSR) can be recovered based on various HSR operation speeds and frequencies is modeled as a linear optimization problem in which all available HSR service frequencies and ticket prices must be consistent with the constraints in the previous MNL logit models.
WD63
Multiobjective Optimization for Engineering Design

Chair: Margaret Wiecek, Clemson University, Department of Mathematical Sciences, Clemson, SC, United States of America, wmalgor@clemson.edu 1 - Robust Multicriteria Routing Optimization to Enhance the Performance of the Internet Erin Doolittle, Clemson University, Department of Mathematical Sciences, Clemson, SC, 29634, United States of America, edoolit@clemson.edu, Herv Kerivin, Sandrine Vaton
We consider an intradomain routing problem on a telecommunication system with multiple objective functions and traffic uncertainty, the former corresponding to link utilizations and the latter being represented by a polyhedral model. Using a multicommodity-flow formulation, we study the efficient routings and present computational results for the ABILENE network.
3 - An Approximate Dynamic Programming Framework for Solving the Train Design Optimization Problem Maite Pena-Alcaraz, MIT, 77 Massachusetts Avenue, E40-244E, Cambridge, MA, 02139, United States of America, maitepa@mit.edu, Mort Webster
We present a train design optimization model to plan the tactical operation of a freight railroad industry. An Approximate Dynamic Programming paradigm will be used to decide what trains will be operated to transport the freights as well as which blocks will be assigned to each train. Different algorithms are tested within a study case presented in the 2011 RAS Problem Solving Competition.
4 - Dynamic Demand Assignment Within the Swedish Rail Freight Carload Service Segment Lars Backker, Ph.D. Student, Linkping University, Bredgatan 33, Norrkping, 602 21, Sweden, lars.backaker@liu.se, Johanna Trnquist Krasemann
Due to daily fluctuations in rail freight transport demand, demand assignment principles become critical for capacity utilization. In the Swedish car load service segment, the First-Booked-First-Served (FBFS) principle is adopted. The principle is transparent towards customers and straight forward. Though, it does not account for the flexibility of demand postponement. In co-operation with Green Cargo we benchmark the FBFS-principle with a dynamic, optimization-based demand assignment regime.
2 - Equitable Multiobjective Optimization for the Hybrid Electric Vehicle Battery Design Brian Dandurand, Graduate Research Assistant, Clemson University, Department of Mathematical Sciences, O-110 Martin Hall Box 340975, Clemson, SC, 29634-0975, United States of America, bdandur@clemson.edu, Margaret Wiecek
The applicability of equitable Pareto solutions to the vehicle battery packaging design is examined. The overall design is modeled as a bilevel multiobjective optimization problem. Equitable Pareto designs are computed for the decomposed problem, rather than for the overall problem, to provide designers with insight into tradeoff design decisions.
WD62
Energy Storage
Contributed Session
Chair: Doug Carmichael, Graduate Student, University of Colorado, 4882 Hopkins Place, Boulder, CO, 80301, United States of America, Robert.Carmichael@colorado.edu 1 - A Generalized Framework for Evaluating Pumping-up Power Plants Kei Takahashi, Research Assistant, Waseda University, 3-4-1 Okubo, Shinjuku-ku, Tokyo, 169-8555, Japan, k-takahashi@aoni.waseda.jp, Takahiro Ohno, Ryohei Watanabe
This paper proposes a generalized framework for evaluating a pumping-up power plant (PPP). PPPs are efficient facilities for preserving energy of electricity which cannot be stored as it is, as gravitational energy. We formulate PPP control problems which can evaluate and compare various kinds of PPP as real option problems. This formulation has high flexibility and can evaluate various kinds of PPP including normal hydrogen power plant and multiple-use PPP.
3 - Multi-objective Design of Vehicles in a Multi-scenario Framework: k-Optimality Selection of the Pareto Paolo Guarneri, Clemson University, 205 Fluor Daniel Bldg, Clemson, United States of America, pguarne@clemson.edu, Massimiliano Gobbi, Gianpiero Mastinu
The vehicle design is a multiobjectiveproblem since the performance is described by many conflicting objectives modeled in terms of different maneuvers. In such a design framework, the Pareto optimality criterion is ineffective and the koptimality criterion is applied to reduce the number of optimal solutions the designer can select.
4 - Biobjective Optimization for Analytical Target Cascading: Optimality vs. Achievability Margaret Wiecek, Clemson University, Department of Mathematical Sciences, Clemson, SC, United States of America, wmalgor@clemson.edu, Melissa Gardenghi
Analytical target cascading, a hierarchical multidisciplinary methodology for decomposition and coordination of design problems, incorporates compromise between the system performance and the demands of the subproblems. Biobjective optimization is used to reconcile system optimality and subproblem achievability of targets while solving the decomposed problem and generating an overall optimal solution.
428

WD66
Strategy and Policy in Health Care

Contributed Session
Chair: Ali Vahit Esensoy, PhD Candidate, University of Toronto, CRHE, 5 Kings College Rd, Toronto, ON, M5S 3G8, Canada, ali.esensoy@utoronto.ca 1 - A Panel-based Analysis Strategy for Accountable Care Organizations (ACOs) Wei Liu, Graduate Student, Purdue University, 2334 South Beck Lane, Apt#209, lafayette, IN, 47909, United States of America, liu317@purdue.edu, Ping Huang
ACOs is a healthcare reform milestone. Primary care physicians face the challenges of controlling the cost while improving healthcare quality. Lack of a systematic understanding of the patient panel situation is one of the largest barriers in the construction of successful ACOs. A panel-based utilization analysis strategy will be introduced in this talk. This strategy will help physicians to better identify the target, improve the care coordination, and utilize the resources in an optimal way.
2 - When do Emissions Reductions Improve Profits? Brian Jacobs, Assistant Professor, Michigan State University, Eli Broad College of Business, N370 North Business Complex, East Lansing, MI, 48824-1122, United States of America, jacobsb@bus.msu.edu, David Closs, Sriram Narayanan, Sachin Modi
Empirical evidence of the relationship between firm-level emissions reductions and financial performance is often conflicting and inconclusive. Using data collected from TRI and Compustat, we demonstrate that this heterogeneity is driven by both the industrys dirtiness and the firms operational capabilities. Further, we show that the impact of emissions reductions on financial performance is moderated by the firms capabilities in environmental performance and employee relationships.
3 - Sales Effort Free Riding and Coordination with Price Match and Selective Target Rebate Dahai Xing, Oklahoma State University, 89 S University PL APT1, Stillwater, OK, 74075, United States of America, dahai.xing@okstate.edu, Tieming Liu
This paper studies sales effort coordination for a supply chain with one manufacturer and two retail channels, where an online retailer offers a lower price and free-rides a traditional retailers sales efforts. We designed a contract with price match and selective compensation rebate. The numerical analysis shows that such a contract can achieve a supply chain efficiency approximating that of an integrated supply chain.
2 - A System Dynamics Modeling Approach to Identification Standards Adoption Angelica Burbano, University of Arkansas, 4207 Bell Engineering Center, Fayetteville, AR, 72701, United States of America, aburbano@uark.edu, Edward Pohl, Ronald Rardin
This research reports on the development of a modeling approach for identification standards adoption which is initially based on the classical Bass technology diffusion model and incorporates the challenges related to identification standards definition. The goal of the model is to simulate the behavior of the hospital population over time and observe the impact of diffusion coefficients in the adoption rate. The model allows for the analysis of policies to move the adoption process forward.
WD66
Manufacturing Topics
Contributed Session
Chair: Francisco Quiroz-Aguilar, Deputy Director, TESCo, Sierra Dorada Lote 62 Casa D, Cuautitlan, Mexico, fqasdp@hotmail.com 1 - Cost of Quality Tradeoffs in Manufacturing Process and Inspection Strategy Selection Hadi Zaklouta, M.Sc. Candidate, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, zaklouta@mit.edu, Richard Roth
This work discusses the prevention, appraisal, internal- and external failure cost tradeoffs between different manufacturing process and inspection strategy options. It does so both from the conventional expected value perspective and from an approach that considers decision makers risk aversion. Key decision driving factors include risk intolerance and product, manufacturing process and inspection strategy characteristics.
3 - Investment Response Model Ali Vahit Esensoy, PhD Candidate, University of Toronto, CRHE, 5 Kings College Rd, Toronto, ON, M5S 3G8, Canada, ali.esensoy@utoronto.ca, Michael Carter
This work involves the development of a system dynamics simulation model of a Local Health Integration Network to assess the effects of major investments into seniors home and community care services on patient flows between health system sectors. Primary focus of the model is to determine the extent to which hospital discharge rates to home and long-term care, and emergency department use were influenced by the $1.1bn Aging At Home Strategy in Ontario, Canada.
4 - The Donor-Dependent Scoring Schemes for Cadaver Kidney Allocation Yichuan Ding, Stanford University, 14 Comstock Circle, Apt 106, Stanford, CA, 94305, United States of America, y7ding@stanford.edu, Stefanos Zenios
In the U.S., the ranking of candidates on the cadaver kidney transplantation waitlist is determined by a scoring scheme, which can be classified into two categories: donor-dependent and donor-independent. By modeling the waitlist, we give a rigorous proof that a donor-dependent scoring scheme will enlarge the range of kidneys that will be accepted by rational candidates. Our simulation test shows that a donor-dependent scoring policy decreases the number of discarded kidneys by 7%.
2 - Modeling Production Systems with Heterogeneous and Lead Time Sensitive Demand Tanja Mlinar, PhD Student, Universit catholique de Louvain, Voie du Roman Pays 34, Louvain La Neuve, 1348, Belgium, tanja.mlinar@uclouvain.be, Philippe Chevalier
We consider production queueing systems serving multiple heterogeneous demand streams sensitive to quoted delivery time. The companys objective is to select an optimal delivery lead time taking into account service level requirements. We study how to find the best combination of lead times for the different products in order to maximize the global profit.
WD65
Operations Management I
Contributed Session
Dahai Xing, Oklahoma State University, 89 S University PL APT1, Stillwater OK 74075, United States of America, dahai.xing@okstate.edu 1 - Lead Time-oriented Order Release Models: A Theoretical Analysis of Essential Shortcomings Hubert Missbauer, Univ.-Professor, University of Innsbruck, Universittsstrasse 15, Innsbruck, 6020, Austria, hubert.missbauer@uibk.ac.at
We deal with multi-period order release models where time-varying lead times are calculated explicitly, either by assuming a functional relationship between release quantities and lead times or by iterating between a fixed lead time release model and a simulation. Both approaches suffer from shortcomings, most important the convergence problems of the iterative approaches. The presentation analyzes these shortcomings using a single-stage order release model in discrete and continuous time.
3 - Simulation Optimization-based Decision Support Tool for Steel Manufacturing Sharif Melouk, University of Alabama, Alston 300, Box 870226, Tuscaloosa, AL, United States of America, smelouk@cba.ua.edu, Nick Freeman, David Miller
Steel manufacturers continuously strive to improve operations and lower operating costs to buffer against raw material price variability and increasing global competition. In this work, we develop a simulation optimization-based support tool to investigate the impact of inventory practices, process dynamics, and resource capacities in a steelmaking facility. Overall, we demonstrate the utility of the solution approach and show that experimental results suggest cost reductions are possible.
4 - The Antecedents and Consequences of Plant Closing Announcement Feng Mai, University of Cincinnati, 523 Carl H. Lindner Hall, Cincinnati, OH, 45221-0130, United States of America, maifg@mail.uc.edu, Amitabh Raturi
Plant closings are critical components of operations strategy and facilities planning. We use Dow Jones, Reuters, and similar news wires to collect announcements of plant closings over a five-year period. Then we use functional data analysis and other approaches to test hypotheses related to key financial and operating antecedent conditions and consequences of these announcements.
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WD67

5 - Foundry Metalic Pieces Problems in the Automotive Industry Francisco Quiroz-Aguilar, Deputy Director, TESCo, Sierra Dorada Lote 62 Casa D, Cuautitlan, Mexico, fqasdp@hotmail.com
In 2010 the automotive industry in Mexico sold about 820,000 vehicles, whose are made basically by foundry pieces, where it can be found several fails that produce economic loss, the present study shows the optimization of the foundry process of an automotive plant, using time study, simulation and decision tools to determine the best options. At the end the company reduced the 30% in rejected products, almost saved 30% in production costs.
Green Supply Chain Management

Contributed Session
Chair: Xu Yang, Postdoctoral Associate, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Room E40-211, Cambridge, MA, 02139, United States of America, xu_yang@mit.edu 1 - Joint Production and Carbon Emissions Permits Trading Strategies Quan Yuan, Department of Systems Engineering & Engineering Management, Chinese University of Hong Kong, Hong Kong, Hong Kong - PRC, qyuan@se.cuhk.edu.hk, Yun Zhou, Frank Chen
We study both production and carbon emissions trading strategies for a firm that emits CO2 in production and purchases CO2 emissions permits from a spot market. The purchased number of permits should meet its annual CO2 emissions amount. The firm faces uncertain demand and fluctuating spot prices for CO2 permits. Purchasing permits incurs both variable and fixed costs. With Markov prices, we obtain the optimal joint policy structure.
WD67
Business Applications I
Contributed Session
Chair: Laura Cardona, Analyst, Bancolombia S.A., Cra 48 #26-85., Torre Sur. Piso 5E, Medelln, Colombia, lccardon@bancolombia.com.co 1 - Analytics and Forecasting of the Business Loads Based on Season Index Forecasting Method Ming Xie, Manager, Industry Solutions (E&U, Logistics and BAO), IBM Research, Diamond Building A, ZGC Software Park, Beijing, 100193, China, xieming@cn.ibm.com, Wenjun Yin, Jin Dong
The future business loads is a key issue challenging the labor scheduling among different service outlets. Here we focus on the business loads forecasting for a bank branch. Through statistical analysis on the sample data, we found usable characteristics. Then we developed a forecasting method based on the season index forecasting method. Tests show that our method works well. In fact, the idea of the method can also be used to develop forecasting methods for other similar scenarios.
2 - Multi Mode Lot Sizing Models with Carbon Emissions Gokce Palak, Mississippi State University, P.O. Box 9542, Mississippi State, MS, 39762, United States of America, gp192@msstate.edu, Sandra Eksioglu
We extend the economic lot sizing model with multi-mode replenishments to consider carbon emissions. We determine the optimality conditions under carbon caps, carbon tax, carbon cap and trade, and carbon offset policies. Our objective is to show how these policies impact the optimal order quantity and transportation mode selection. We use a large set of numerical experiments to identify the impact of different policies on the total (inventory, transportation and order setup) costs.
2 - Evaluating the Effectiveness of Large-Scale Managerial Decisions Audrey Griffin, The Pennsylvania State University, DuBois Campus, College Place, DuBois, PA, 15801, United States of America, asb10@psu.edu
Evaluating the effectiveness of managerial decisions can be difficult. A software tool has been developed to detect en masse, major stock performance changes in virtually any industry. Periods of abrupt gains or losses can then be correlated with events of interest (e.g., large-scale IS implementations), leading to otherwise unmineable conclusions.
3 - The Implications of Carbon Management on Supply Chain Design Issues Yi-Fen Chen, UC Berkeley, 4141 Etcheverry Hall, UC Berkeley, Berkeley, United States of America, yifenchen@berkeley.edu, Z. Max Shen, David Dornfeld
Many firms try to reduce their carbon emissions by focusing on transportation tactics rather than supply chain design strategies. This may lead to suboptimal decisions due to the lack of considerations of other supply chain activities, such as warehouse operations. An integrated supply chain design model was constructed to investigate the trade-offs between warehouse and transportation carbon emissions. We also investigate an multi-objective problem that minimizes both cost and carbon emissions.
3 - Monitoring, Learning and Reputation: An Experimental Investigation on Alliance Partners Opportunism Yanhui Gao, Xian Jiaotong University, School of Management, No. 28 Xianning West Road, Xian, 710049, China, yhgaoxjtu@yahoo.com.cn, Difang Wan
How to control partners opportunism is a very important issue in alliances. This paper reorganized the mechanisms advanced by complementary streams of literature, and juxtaposes three main measures that deter partners opportunism: monitoring, learning and reputation. To better understand how they influence the partners opportunistic behaviors and what the relationship among them is, we use an experimental design, that combines game theory with the mechanisms, to examine the interplay of them.
4 - A Green Multi-period Production Scheduling Optimization Method Xiaoqing Wang, IBM Research - China, Diamond Building A, ZGC Software Park, Beijing, China, xqwangxq@cn.ibm.com, Hongwei Ding, Minmin Qiu, Jin Dong
Manufacturing processes produce large amounts of carbon emissions, which push them to apply renewable energy to mitigate emissions from the production and operations. A green multi-period production scheduling optimization method for the single machine scheduling problem is addressed and proposed, and applications of renewable energy and fossil energy in the method is balanced and optimized.
4 - Automation of the Boxplot for Outlier Detection in the Variable Expenses of a Transportation Company Laura Cardona, Analyst, Bancolombia S.A., Cra 48 #26-85., Torre Sur. Piso 5E, Medelln, Colombia, lccardon@bancolombia.com.co, Alejandro Kepes
We present an anomaly detection method to audit variable expenses in the routes of a road transportation company. With the use of data mining the boxplot method was adapted to be applied to large volumes of data, generating large numbers of boxplots. This allowed selecting just 0.2% of the trips for detailed auditing, allowing to focus only in those cases that showed abnormal behavior in their variable expenses. This turned out to be a very simple but useful and efficient solution.
5 - Environmental Impact Analysis of Shipping Food and Supplies to Galapagos Islands Xu Yang, Postdoctoral Associate, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Room E40-211, Cambridge, MA, 02139, United States of America, xu_yang@mit.edu, Edgar Blanco, Ximena Cordova-Vallejo
We conduct an analysis of the environmental impact of shipping food and supplies from Ecuador mainland to Galapagos Islands. All three modes of transportation (road, air and sea) are used in the shipping legs of different shipping routes. We focus on carbon emissions from the transportation in this study. We apply the NTM Methodology to calculate the carbon emissions from road, air and sea transportation. We also discuss how to reduce the environmental impact and manage the waste on the islands.
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WE03

WE01
C - Room 201A
WE02
C - Room 201B
Structural Topics in Marketing

Contributed Session
Chair: Yin Zhou, Xian Jiaotong University, 28# Xianning West Road, Xian, China, celina528@gmail.com 1 - New Product Introduction in Supply Chains: Upward Extension, Fighter Brand, or Substitution? Chia-Wei Kuo, National Taiwan University, 1 Sec 4 Roosevelt Road, Taipei, Taiwan - ROC, cwkuo@ntu.edu.tw, Ying-Ju Chen
We investigate how the manufacturer or the retailer introduces new products in this national-store-brand context. We find in the absence of cost efficiency discrepancy, the retailer typically introduces a new product with a quality closer to the national brand, whereas the manufacturer meticulously positions the new product to facilitate finer market segmentation. We also demonstrate the possibility that the control right can be inconsequential in the product line design.
Stochastic Processes
Contributed Session
Chair: Oleksii Mostovyi, Carnegie Mellon University, Department of Mathematical Sciences, Pittsburgh, PA, United States of America, omostovy@andrew.cmu.edu 1 - A Modified Hourglass Model for Neural Activity Cristina Lopez, Universidad de los Andes, Cra 1 Este # 19A-40, Bogota, Colombia, c.lopez35@uniandes.edu.co, Raha Akhavan-Tabatabaei, Viswanathan Arunachalam
We propose a stochastic model for the biological neural network activity in which the spike intervals are based on the frequency of excitation. The proposed model is used to construct a modified hourglass network model in which the interconnected neurons are inhibitory.
2 - A Simple Approximation for the Renewal Function and its Integral Hossein Parsa, Mississippi State University, 321B McCain building, Msstate, MS, 39762, United States of America, hp83@msstate.edu, Mingzhou Jin
A new simple approximation is proposed to compute the renewal function and its integral. The asymptotic approximation of the renewal function and its integral may not perform well when t is not large enough. To overcome the inaccuracy of the asymptotic approximation, we propose a modified approximation that computes the renewal function and its integral for the entire range of t while the challenge is to get an explicit expression rather than just to compute the renewal function numerically.
2 - Store Within a Store Selection Based on the Demand Forecast Wenbo Teng, Xian Jiaotong University, 28# Xianning West Road, Xian, China, Tengwenbo@sogou.com, Yin Zhou, Qian Peng, Danping Wang
This paper studies the impact of product substitutability, market uncertainty and demand forecast on the profit of the channel members under SWS (Store within a store) and traditional mode. The conclusion implies that the manufactory prefers SWS mode with low product substitutability, high market uncertainty and more demand forecast improvement. And when some conditions are satisfied, SWS mode is a Pareto strategy for both of the channel members.
LATE CANCELLATION
3 - Stochastic Truck Assignment Subhro Mitra, Assistant Professor, University of North Texas at Dallas, 7400 University Hill, Dallas, TX, 75241, United States of America, subhro.mitra@unt.edu, Joseph Szmerekovsky
There are not many stochastic traffic assignment methodologies which have been applied in freight flow models. The behavioral assumption governing route choice differs considerably in the case of truck traffic from the case of passenger vehicle traffic. We developed a stochastic truck traffic assignment methodology. In our stochastic assignment model for truck traffic we use Monte Carlo simulation to generate the random component of the perceived time and the variable cost.
3 - The Moderating Influence of Perceived Choice Freedom and its Antecedents in Chinese Gray Marketing Qian Peng, Xian Jiaotong University, 28# Xianning West Road, Xian, China, rickiqian@stu.xjtu.edu.cn, Danping Wang, Wenbo Teng, Gui-jun Zhuang, Yin Zhou
This paper extends the TPB under the marketing ethics context, that is, in a gray marketing setting. Findings from a survey of 592 professional salespersons in China indicate that, un-ethicalness judgment (A), organizations connivance(SN), perceived choice freedom(PBC) have significant influence on the gray-marketing intention, the antecedents (referent groups both inside and outside organizations) have negative effect on PBC which also moderates the graymarketing ethical decision-making.
4 - Nonparametric Multivariate Distribution Estimation and Factor Selection for Mixed-type Datasets Bryan Pearce, Clemson University, 103 Freeman Hall, Clemson, SC, 29634, United States of America, bpearce@clemson.edu, Kevin Taaffe
Application of stochastic tools to systems with interacting input factors requires specification of multivariate probability distributions. Mixed continuous, nominal, and/or ordinal factor sets prohibit usage of most classic distribution fitting strategies. Methods are presented for selecting relevant factors from the dataset and applying modified kernel density estimation techniques, with motivating examples from the healthcare and aerospace industries.
4 - When Does Relational Governance Inhibit Opportunism in China: A Contingency Framework Yin Zhou, Xian Jiaotong University, 28# Xianning West Road, Xian, China, celina528@gmail.com, Danping Wang, Wenbo Teng, Gui-jun Zhuang, Qian Peng
This research develops a contingency framework from a process-based view suggesting that the relationship between relational governance(RG) and opportunism(OP) is dependent on interorganizational relationship quality(IRQ). A survey of 152 respondents in China shows that when IRQ is low, RG in terms of joint planning will inhibit OP while joint problem solving will exacerbate OP; Conversely, when IRQ is high, joint planning will exacerbate OP while joint problem solving will inhibit OP.
5 - Necessary and Sufficient Conditions in the Problem of Optimal Investment with Intermediate Consumption Oleksii Mostovyi, Carnegie Mellon University, Department of Mathematical Sciences, Pittsburgh, PA, United States of America, omostovy@andrew.cmu.edu
We consider the problem of maximizing the expected utility of consumption and terminal wealth in the framework of a general incomplete semimartingale model of a financial market. We show that the necessary and sufficient conditions on the utility stochastic field and the model of a financial market, are that the value functions of the primal and dual problems are finite.
WE03
C - Room 202A
Procurement and Costing

Contributed Session
Chair: Ozden Cakici, PhD Candidate, University of Rochester, Carol G. Simon Hall 4th Floor, Rochester, NY, 14620, United States of America, engin.cakici@simon.rochester.edu 1 - A Two-stage Procurement Problem under a Budgetary Constraint Dogan Serel, Bilkent University, Faculty of Business Administration, 06800 Bilkent, Ankara, Turkey, serel@bilkent.edu.tr
We consider a single-period inventory problem in which two different orders are placed for the products. The first order is based on an initial demand forecast. After collecting market data, the demand forecast is revised, and a second order is placed. Because the purchase cost is higher for the second order, the retailer faces a tradeoff between the demand forecast accuracy and supply cost. We determine the retailers optimal procurement policy using a computational procedure.
431
WE07

4 - Sample-path Analysis of Queues with Batch Arrivals Muhammad El-Taha, Professor, University of Southern Maine, Department of Mathematics & Statistics, 96 Falmouth St., Portland, ME, 04104, United States of America, eltaha@usm.maine.edu
In this talk we give a deterministic proof of a result that extends the PollaczekKhintchine formula for a batch arrival queueing model. We also give a conservation law for the same system with multiple classes. Our results are completely rigorous and holds under weaker assumption than those given in the literature. We do not make stochastic assumptions, so the results hold almost surely on every sample path of the stochastic process that describes the system evolution.
2 - The Effect of Contracts Within the Last Buy Problem Nicholas Leifker, Assistant Professor, St. John Fisher College, 348 Wintergreen Way, Rochester, NY, 14618, United States of America, nleifker@sjfc.edu, Timothy Lowe, Philip Jones
The last buy problem is an inventory optimization problem in which the goal is to find the optimal final order amount for spare parts for end-of-life products. We will look at multiple models based on the actions taken once the last buy has run out - specifically, whether or not replenishment at a premium cost is possible. Based on these models, we will then examine the effect of contractual issues within the last buy, such as the use of contract extensions and contract pooling.
3 - Introduction of (Q,R,S) Inventory Policy under Continuous Time Costing Ozden Cakici, PhD Candidate, University of Rochester, Carol G. Simon Hall 4th Floor, Rochester, NY, 14620, United States of America, engin.cakici@simon.rochester.edu, Harry Groenevelt
We investigate a (Q,R,S) inventory policy that orders in multiples of Q units, reviews every R time units, and inventory position never exceeds S. The model combines periodic and continuous review, and assumes a convex inventory cost rate function and stationary demand with independent increments. Continuous time costing allows comparison between policies with different review periods. We also show how the model can be extended to incorporate random lead times under certain conditions.
WE08
C - Room 205
Topics in Dynamic Programming

Contributed Session
Chair: Mohammad Mousavi, Stanford University, Stanford, CA, 94305, United States of America, mousavi@stanford.edu 1 - Improved Dynamic Programming Algorithm for the Resource Constrained Elementary Shortest Path Problem Hyunchul Tae, Doctoral Candidate, POSTECH, 207-o, 4th Enginner Building, POSTECH, Hyoja-Dong, Nam-gu, Pohang, Korea, Republic of, scipio@postech.ac.kr, Byung-In Kim
The resource constrained elementary shortest path problem (RCESPP) is a subproblem of column generation approach for vehicle routing problems. Column generation approach generally invokes many execution of the sub-problem so an efficient RCESPP algorithm is required for the approach. In this talk, we propose a new RCESPP dynamic programming algorithm. Computational results show that our algorithm can find near optimal solutions faster than other algorithms.
WE07
C - Room 204
Advances in Queueing Theory

Contributed Session
Chair: Muhammad El-Taha, Professor, University of Southern Maine, Department of Mathematics & Statistics, 96 Falmouth St., Portland, ME, 04104, United States of America, eltaha@usm.maine.edu 1 - Asymptotic Analysis of Blocking Probability under GI/M/s/s Systems with Heavy Traffic Chia-Hung Wang, Department of Mathematical Sciences, National Chengchi University, No.115, Fuxing Rd., Yongkang Dist., Tainan, 71051, Taiwan - ROC, jhwang728@hotmail.com, Hsing Luh
This paper presents a heavy-traffic queueing model, where the traffic intensity increases to one as the number of servers approaches to infinity. An approximation and the asymptotic behavior are studied for the blocking probability with a sequence of queues indexed by the number of servers. In conclusive results, blocking probabilities are estimated analytically with heavy traffic under assumptions of exponential, deterministic and Erlang-r inter-arrival time distributions, individually.
2 - Stochastic Dynamic Dispatch Policies for Consolidation Systems with Cargo Capacity Liqing Zhang, Texas A&M University, Industrial & Systems Engineering, TAMU, College Station, TX, 77843, United States of America, liqing@tamu.edu, Sila Cetinkaya
We study a periodic review, stochastic dynamic distribution system where the transportation is conducted by a fleet of trucks with cargo capacity constraints. We first consider the case of single-truck and then examine the multi-truck case. For the multi-truck case, the transportation cost includes a multiple set-up cost term representing the cargo costs and capacities. We examine the optimal dispatch policies for both cases.
2 - Error Estimation of Decomposition Methods for Analysis of Queuing System with Finite Buffer Shanshan Qiu, Wayne State University, 4815 Fourth St., Detroit, MI, 48202, United States of America, dy5145@wayne.edu, Alper Murat, Ratna Chinnam
Decomposition methods are popular approximation approaches to the throughput analysis of production systems with unreliable machines and finite buffer capacities. In this research we try to determine precisely the performance of these methods. An analytic, rather than only numerical, upper bound on the error of Gershwin decomposition method (1983) is developed.
3 - An Approach for Dynamic Optimization in Evidence-based Prevention Program Yuncheol Kang, Pennsylvania State University, 236 Leonhard Bldg., University Park, PA, United States of America, yckang@psu.edu, Vittal Prabhu
In this study, we present an idea for optimizing evidence-based prevention program (EBP) implementations in stochastic and dynamic environments. Our methodology is primarily focused on the Markov Decision Process (MDP) approach for dynamically optimizing implementations in EBP. We review MDP approach, illustrate its application, and discuss potential challenges in applying such approaches in practice.
3 - A Gaussian-based Approximation of Congestion and Queue Time under Conditions of Stochastic and Non-stationary Arrival Rates Michael Haughton, School of Business and Economics, Wilfrid Laurier University, 75 University Avenue West, Waterloo, ON, Canada, mhaughton@wlu.ca, KP Sapna
We propose a computationally efficient and reliably accurate method for estimating queue length (congestion) and queue time in systens characterised by stochastic and non-stationary arrival rates. The proposed Gaussian-based approach uses properties of the truncated normal distribution and provides timedependent estimates for both metrics of queueing system performance. The quality of the proposed approximation is examined for a wide range of sinusoidal arrival rate functions and for empirical arrival rate data in the extant literature. Given its accuracy, the approximation is an effective alternative to extensve simulations.
WE09
C - Room 206A
Model Selection and Mis-specification Issues in Revenue Management

Chair: Omar Besbes, Assistant Professor, Columbia University, 3022 Broadway, New York, NY, 10027, United States of America, ob2105@columbia.edu 1 - Dynamic Valuation of Delinquent Credit-Card Accounts Naveed Chehrazi, PhD Candidate, Stanford University, Huang Engineering Center, Stanford, CA, 94305, United States of America, chehrazi@stanford.edu, Thomas Weber
We develop a dynamic method to estimate the repayment probability of a delinquent credit-card account given a banks collection strategy as well as account-specific and macroeconomic information. Unlike the FICO score, the dynamic collectability score (DCS) constructed from our model represents the actual chance of collecting a given percentage of an outstanding debt over a specified time horizon. The DCS method is then used to price delinquent creditcard accounts based on repayment data.
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2 - Model Specification and Buy Up in Revenue Management William Cooper, University of Minnesota, Industrial and Systems Engineering, Minneapolis, MN, 55455, United States of America, billcoop@me.umn.edu, Le Li
We consider a revenue manager who controls bookings over a series of flights with a buy-up model, and updates estimates of the model parameters. We study the evolution of the estimates and the chosen booking limits when the buy-up model is misspecified, i.e., when there is no setting of its parameters such that its objective function gives an accurate representation of expected revenue as a function of the booking limit. We focus on settings where customers arrive according to Poisson processes.
WE14
3 - Large Deviations Analysis for Symmetric RBM in 3-d John Hasenbein, Associate Professor, University of Texas at Austin, ETC 5.128B, Department of Mechanical Engineering, Austin, TX, 78712-1063, United States of America, jhas@mail.utexas.edu, Ziyu Liang
We analyze the variational problem which arises from the large deviations principle for RBM in the positive 3-d orthant. In particular, we investigate the cases of rotationally and mirror symmetric RBM data. The goal is to determine general characteristics of optimal paths, which allow more efficient computational procedures for obtaining the exponent in the rate function.
3 - Directed Principal Component Analysis Yi-hao Kao, Stanford University, Packard 274, Stanford, CA, United States of America, yihaokao@stanford.edu, Benjamin Van Roy
We consider a problem that involves estimating a covariance matrix and making a decision based on that estimate. Such problems arise in portfolio management among other areas, and a common approach is to apply principal component analysis to estimate a parsimonious factor model. This approach treats estimation and optimization separately. We propose directed PCA, an estimation algorithm that takes the decision objective into account, and demonstrate that it offers significant benefits.
WE14
C - Room 208A
Simulations in Energy Markets

Chair: Augusto Ruprez Micola, Universitat Pompeu Fabra, Ramon Trias Fargas 25, Barcelona, Spain, augusto.ruperezmicola@gmail.com 1 - Heterogeneous Agents in Electricity Forward Markets Ronald Huisman, Associate Professor, Erasmus School of Economics / Erasmus University, P.O. Box 1738, Rotterdam, 3000DR, Netherlands, rhuisman@ese.eur.nl
We examine the presence of heterogeneous agents in electricity forward markets. We set up an agent based price model and make a distinction between fundamental and chartist agents. Agents are allowed to switch between groups conditional on recent performance. We find evidence that both fundamental and chartists are present in electricity futures markets, that fundamental agents base their expectations at least partly on fuel prices and that the agents switch between strategies over time.
4 - On the (surprising) Sufficiency of Linear Demand Models for Learning and Earning Omar Besbes, Assistant Professor, Columbia University, 3022 Broadway, New York, NY, 10027, United States of America, ob2105@columbia.edu, Assaf Zeevi
We study a pricing problem in which the decision-maker (DM) does not have access to the true underlying demand model. Inspired by practice, we consider the case in which the DM postulates a parametric class of models and frequently recalibrates the parameters to re-optimize decisions. We analyze the impact of a key element almost always present in practice but often ignored in the literature: model mis-specification. We show that the price of mis-specification may be surprisingly small.
WE11
C - Room 207A
2 - Pricing Mechanism for Real-time Balancing in Regional Electricity Markets Wolf Ketter, Assistant Professor, Rotterdam School of Management, Burgemeester Oudlaan 50, T9-07, Rotterdam, 3062PA, Netherlands, WKetter@rsm.nl, Mathijs de Weerdt, John Collins
We consider the problem of designing a pricing mechanism for precisely controlling the real-time balance in electricity markets, where retail brokers aggregate the supply and demand of a number of individual customers, and must purchase or sell power at the wholesale level such that the total supply matches total demand. In real time, balancing must be done through purchase of regulating services, and by remotely controlling portions of their retail customer loads and sources.
The Skorokhod Problem and Stochastic Networks

Chair: Kavita Ramanan, Brown University, Providence, RI, United States of America, kavita_ramanan@brown.edu 1 - Optimal Control for Parallel Server Model at Equilibrium of the Fluid Limit, Using Measure Valued Processes Haya Kaspi, Technion, Technion City, Haifa, 32000, Israel, iehaya@tx.technion.ac.il, Rami Atar, Nahum Shimkin
We study the multi-class parallel service model with reneging in the many servers fluid limit. The various classes have independent arrival processes, service times and patience. We assume that the service times and patience of the various classes have densities. Our main tool for the study is previous work by KaspiRamanan and Kang-Ramanan on fluid limits of many servers queuing systems. We study a fixed, non preemptive priority assignments and identify the behavior of the queue as the unique solution of the corresponding measure valued fluid equations. We show that in the limit, at equilibrium, the preemptive and the corresponding non preemptive assignments policies give rise to the same solution. When reneging is exponential (with different parameters for different classes of customers) we show that, for a natural cost function, an analogue of the cu_9 priority assignment rule is asymptotically optimal at equilibrium. The proof of uniqueness for the solutions of the fluid equations relies on the uniqueness of a solution of a Skorokhod problem which is quite different from those appearing in conventional heavy traffic analysis.
3 - Wind Power Trading by Firms with Mixed Generation Portfolios Abhishek Somani, PhD Economics Candidate, Iowa State University, Economics Department, Heady Hall 477, Ames, IA, 50011, United States of America, asomani@iastate.edu, Huan Zhao, Leigh Tesfatsion, Nivad Navid
The market rules governing wind power are still evolving and could lead to profit opportunities for some firms while disadvantaging others, depending on the nature of the rules and the generation portfolio mix of each firm. We use analytical and agent-based models to examine the effects of market rules on the trading strategies of profit-seeking firms that supply energy in wholesale power markets using portfolios of generation assets combining both conventional and wind resources.
2 - Stability of the Skorokhod Problem is Undecidable David Gamarnik, Massachusetts Institute of Technology, 100 Main Street E62-563, Sloan School of Management, Cambridge, MA, 02139, United States of America, gamarnik@mit.edu, Dmitriy Katz-Rogozhnikov
The Skorokhod problem arises in studying Reflected Brownian Motion (RBM) and the associated fluid model on an non-negative orthant. One of the key problems is identifying conditions for stability of a Skorokhod problem arising in this context, defined as the property that trajectories are attracted to the origin. The stability conditions are known in dimension up to three, but not for general dimensions. In this paper we explain the fundamental difficulties encountered in trying to establish stability conditions for general dimensions. We prove that stability of the Skorokhod problem associated with a fluid model of an RBM is an undecidable property, when the starting state is a part of the input. Namely, there does not exist an algorithm (a constructive procedure) for identifying stable Skorokhod problem in general dimensions.
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WE19 WE19
C - Room 210B

3 - Optimization Models for Center Based Multicasting Routing Carlos Oliveira, Bloomberg LP, 731 Lexington Ave, New York, NY, United States of America, coliveira@gmail.com
In multicast routing, data is transferred from one or more sources to a set of destinations. A popular strategy for maintaining multicast routing trees is to use a center node that serves as a hub for the network. In this talk, we present optimization models for this problem. We describe algorithms and discuss computational results from the the proposed approaches.
Financial Engineering
Contributed Session
Chair: Nalan Gulpinar, The University of Warwick, Warwick Business School, Coventry, United Kingdom, ngulpinar@hotmail.com 1 - A General Two-factor Lattice Method for Stochastic Volatility Models Chung-Li Tseng, Associate Professor, University of New South Wales, Australian School of Business, Sydney, Australia, c.tseng@unsw.edu.au, Wei-Chung Maio, San-Lin Chung, Pai-Ta Shih
We propose a general two-factor trinomial lattice method, extended from Hull and White (1994), to approximate diffusion processes with state-dependent volatilities. Lattice parameters are optimized to guarantee that branching probabilities are legitimate at all nodes and all stages, even if both state variables are highly correlated. Numerical tests against analytical benchmarks indicate the proposed lattice model can accurately value financial assets with two state variables.
4 - A New Objective to Reconstruct Flux Distributions from Elementary Modes in Metabolic Networks Ping Ji, Associate Professor, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, Hong Kong - PRC, mfpji@inet.polyu.edu.hk, Siu Hung Joshua Chan
Metabolic network has been successful in studying cellular metabolism. Flux distribution in the network can be reconstructed from elementary modes to gain insights but the reconstruction is not unique, depending on the objective chosen. Based on a previous experiment suggesting the linearity in the co-regulation of metabolic pathways, we propose a new objective for the reconstruction by minimizing branchpoints to interpret flux distributions from a pathway perspective accurately.
2 - Dynamics of Reference Point and its Impact on Investors Behavior Yun Shi, The Chinese University of Hong Kong, Department of Systems Engineering, Rm 910A, ERB Shatin, Hong Kong, Hong Kong - ROC, yshi@se.cuhk.edu.hk, Jing Yao, Duan Li, Xiangyu Cui
Suitable modeling of dynamics of reference point plays a significant role in describing investors behavior in dynamic situations. In the framework of prospect-theory preference, we formulate the dynamics of the reference point based on the investors aspiration level for her/his investment performance and derive semi-analytical solution for the model. We further demonstrate our result to shed light on the disposition effect.
5 - Disaggregation of Linear Diophantine Equation over Bounded Set Bojun Lu, The Chinese University of Hong Kong, Department of Systems Engineering, 910A, ERB, Shatin, NT, Hong Kong - PRC, bjlu@se.cuhk.edu.hk, Duan Li
While linear Diophantine equation (LDE) over bounded set finds numerous applications, including cryptosystem and reachability study of Petri Nets, this classical challenge is known to be NP-hard. We consider in this research disaggregation schemes for LDE, i.e., to transform LDE into two equivalent integer linear equations using modular arithmetic in number theory. When disaggregation is attained in an iterative fashion, we can achieve dimension reduction successively.
3 - Robust Regime-switching Portfolio Management under Supply Disruption Nalan Gulpinar, The University of Warwick, Warwick Business School, Coventry, United Kingdom, ngulpinar@hotmail.com, Ethem Canakoglu
This paper is concerned with robust investment strategies for portfolio management under supply disruption within petroleum markets. We develop a regime-switching model where different regimes reflect the exogenous effects of supply disruption. We introduce a tractable robust approach to reduce parameter estimation errors arising within price dynamics. Numerical experiments are designed to investigate modelling implications of different price dynamics and market regimes.
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C - Room 211B
Applied Stochastic Programming in Finance and Energy

Chair: Giorgio Consigli, Universit degli studi di Bergamo, Italy, giorgio.consigli@unibg.it 1 - Stochastic Models for the Capacity Expansion Problem of a Power Producer Maria Teresa Vespucci, Associate Professor, University of Bergamo, via Marconi 5, Dalmine, BG, 24044, Italy, maria-teresa.vespucci@unibg.it, Marida Bertocchi, Rosella Giacometti, Mario Innorta, Stefano Zigrino
We present a stochastic model for the optimal investment decisions in capacity expansion of a power producer, choosing among different technologies (thermal and renewable energy plants) and taking into account the uncertainty in fuel prices. A linear combination of the expected profit and of a risk measure must be maximized, with constraints on CO2 emissions and on sites availability for new plants. The expected profit includes revenues and costs for green certificates and CO2 emission permits.
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C - Room 211A
Combinatorial Optimization
Contributed Session
Chair: Ping Ji, Associate Professor, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong, Hong Kong - PRC, mfpji@inet.polyu.edu.hk 1 - Fleet Size and Mix Workover Rigs Scheduling Problem on Onshore Oil Fields Werner Soares, Universidade Federal de Pernambuco, Av. Acadmico Hlio Ramos, s/n - Cidade, Recide, Brazil, werner.soares@gmail.com, Dario Jos Aloise, Ana Paula Costa
Important services on oil wells in onshore oil fields are performed by expensive workover rigs. Therefore, a good choice of fleet size and mix and scheduling of such equipment is necessary. However, in literature, the quantities are considered fixed, a priori, and the rigs generally homogeneous. In this work, heuristics are developed for the more complete version, presenting promising computational results on benchmarks instances.
2 - Generation Capacity Expansion with Long and Short Tern Uncertainties Yves Smeers, Universit Cathoique de Louvain, CORE, Voie du Roman Pays 34, Louvain-la-Neuve, 1348, Belgium, yves.smeers@uclouvain.be, Gauthier de Mae d Aertrycke, Andreas Ehrenmann, Alexander Shapiro
We consider the problem of generation capacity expansion where the evaluation of the marginal value of plants is complicated by the penetration of intermittent sources. We apply sampling methods both in static and multistage environments in order to assess the distribution of the cash flow of generation units.
2 - Application of Tabu Search Metaheuristics to Police Precincts Location Andr Gurgel, Universidade Federal de Pernambuco, Av. Acadmico Hlio Ramos, s/n - Cidade, Recife, Brazil, andmgurgel@gmail.com, Rodrigo Ferreira, Dario Jos Aloise, Caroline Mota, Werner Soares
Location of police precincts is a strategic decision that can affect operations efficiency in terms of service time and costs. Based on p-median modeling, it was proposed a strategy of tabu search with path relinking and applied to the public security improvement of Natal city, Brazil. Results show a reduction of 44% in the total traveled distance, improving the routing of police patrols and service levels, increasing the number of solved cases.
3 - Optimal Capital Growth with Convex Loss Penalties Len MacLean, Herbert Lamb Chair, Dalhousie University, 6100 University Avenue, Halifax, NS, B3H 3J5, Canada, L.C.MacLean@DAL.CA, Yonggan Zhao, William T. Ziemba
In this paper the traditional capital growth model and modifications to control risk are developed. A mixture model based on Markov transitions between normally distributed market regimes is used for the dynamics of asset prices. Decisions on investment in assets are determined from a constrained growth model, where the trajectory of wealth is required to exceed a specified path over time with high probability, and the path violations are penalized using a convex loss function.
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4 - Property and Casualty Dynamic Portfolio Optimization Giorgio Consigli, Universit degli studi di Bergamo, Italy, giorgio.consigli@unibg.it, Davide Musitelli, Massimo di Tria, Gaetano Iaquinta, Angelo Uristani, Vittorio Moriggia
Recent trends in the insurance sector have highlighted expansion of large insurance firms into asset management. The phenomenon has far reaching implications for the definition of optimal asset-liability management (ALM) strategies at the aggregate level and for capital required by insurance companies. In this article we present an ALM model tested in a real-world case study, combining in a dynamic framework an optimal strategic asset allocation problem formulation subject to property and casualty (P&C) business constraints for a large insurer. The benefits of a dynamic formulation and the opportunities arising from of an integrated approach to investment and P&C insurance management are highlighted in this chapter.
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5 - Solution Characteristics of a Nonsmooth Convex Program with Nonpolyhedron Frontier Constraints John Liu, Professor, City University of Hong Kong, CTFS, College of Business, Tat Chee Avenue, Kowloon, Hong Kong - PRC, liujjp@gmail.com, Xuesong Li, Jiguang Yuan
We are concerned about a convex program with a nonsmooth objective function and nonpolyhedron goal constraints (termed frontier constraints), that is embraced with a range of optimization applications, such as multi-dimension frontier analysis, multi-objective programming, and data envelopment analysis. We obtain solution characteristics of a nonpolyhedron nonsmooth convex program. Then, we formulate solution programs to determine nondominated points of a nonpolyhedron solution set.
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C - Room 212A
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C - Room 212B
Evacuations
Contributed Session
Chair: Chrysafis Vogiatzis, PhD Student, University of Florida, Department of Industrial and Systems Eng., Gainesville, FL, 32608, United States of America, chvogiat@ufl.edu 1 - Dynamically Locating Control Sensors During Emergency Evacuations Jiaming Qiu, Rensselaer Polytechnic Institute, 110 8th Street, Troy, NY, 12180, United States of America, qiuj@rpi.edu, Jeff Ban, Thomas Sharkey
We propose dynamic location models for the deployment of control sensors in traffic systems during an emergency evacuation with the objective of minimizing the total system evacuation time. We provide a rolling destination procedure that first focuses on evacuating a critical area of the network (for example, the coastline in the case of hurricanes) and then gradually expands this area over time. Computational results for realistic traffic systems will be presented.
Continuous Optimization
Contributed Session
Chair: John Liu, Professor, City University of Hong Kong, CTFS, College of Business, Tat Chee Avenue, Kowloon, Hong Kong - PRC, liujjp@gmail.com 1 - Applications of Optimization Techniques in Quantum Chemistry Mituhiro Fukuda, Tokyo Institute of Technology, 2-12-1-W8-41, Ookayama, Meguro-ku, Tokyo, Japan, mituhiro@is.titech.ac.jp, Maho Nakata, Katsuki Fujisawa
Certain problems in quantum chemistry can be cast as a continuous optimization problem. In particular, approximations using semidefinite programming (SDP) have been demonstrated to be very accurate for small atoms and molecules. We will discuss the formulations, and give numerical results on large-scale SDPs for these chemical compounds. These problems can be also seen as a generalization of the max-cut problem in graph theory in a higher dimension.
2 - Branch-and-Sandwich: An Algorithm for Optimistic Bi-level Programming Problems Polyxeni Kleniati, Imperial College London, Centre for Process Systems Engineering, Department of Chemical Engineering, London, SW7 2AZ, United Kingdom, polyxeni.kleniati03@imperial.ac.uk, Claire S Adjiman
We tackle the optimistic bi-level programming problem with a nonconvex inner program. We explore two solution spaces, corresponding to the inner and outer problems, using a single branch-and-bound tree. The proposed subdivision process is shown exhaustive if all variables are selected for branching. The inner best (upper) bound is shown consistent and improving for the inner problem. It is used to tighten the best (lower) bound for the outer problem which is also shown consistent and improving.
2 - Research Projekt REPKA - Regional Evacuation: Planning, Control, and Adaptation Katharina Gerhardt, TU Kaiserslautern, Paul-Ehrlich-Str. 14, Kaiserslautern, 67663, Germany, gerhardt@mathematik.uni-kl.de
A basic rescue measure in case of attacks and natural disasters is the evacuation of affected buildings and regions. We focus on the situation that occurs when a large crowd has already left a building and must then be brought further away to places that are rated safe. Mathematical optimization and simulation is used to develop practical evacuation plans for an entire region. Relief units are then able to run through multiple situations before a disaster actually occurs.
3 - Conditional Gradient Algorithms for Rank-one Matrix Approximations with a Sparsity Constraint Ronny Luss, Tel Aviv University, School of Mathematical Sciences, Ramat Aviv, Tel Aviv, 69978, Israel, ronnyluss@gmail.com, Marc Teboulle
The sparsity constrained rank-one matrix approximation problem is a difficult mathematical optimization problem arising in a wide array of useful applications. We introduce an algorithmic framework that unifies a variety of seemingly different algorithms that have been derived from disparate approaches. Building on the old and well-known conditional gradient algorithm, we provide a simplified version which either is given by an analytic formula or requires a very low computational complexity.
3 - Evacuation Management under Extreme Tropical Events Chrysafis Vogiatzis, PhD Student, University of Florida, Department of Industrial and Systems Eng., Gainesville, FL, 32608, United States of America, chvogiat@ufl.edu, Panos Pardalos
In this talk, an original multimodal transportation education virtual appliance (MTEVA) is presented. In the appliance, a storm surge and inundation model is coupled with a transportation model and an optimization engine, which form this evacuation planning software. Evacuation planning is performed online (using cloud computing) and is dynamic, depending on the storm characteristics at every time. Computational results for large scale network optimization are also given.
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C - Room 213A
4 - Error Analysis of Meshfree Approximation Methods Based on Convex Optimization Agustin Bompadre, Postdoctoral Fellow, California Institute of Technology, 1200 E. California Boulevard, Pasadena, CA, 91125, United States of America, abompadr@gmail.com, Michael Ortiz
Approximation methods are used to solve numerically PDEs in Material Science. In this talk, we discuss meshfree approximation methods, which are methods that avoid meshing the domain. We give a set of sufficient conditions to guarantee the convergence of approximates based on meshfree methods. We review the Local Maximum-Entropy approximation scheme, which is a meshfree approximation method based on an optimization principle, and we show that the general error bounds apply to this method.
Topics in Integer Programming

Chair: Alejandro Toriello, Assistant Professor, University of Southern California, 3715 McClintock Avenue, GER 240, Los Angeles, CA, 90089, United States of America, toriello@usc.edu 1 - Convex Optimization over the Integers Daniel Dadush, PhD Student, Georgia Tech, Atlanta, GA, United States of America, dndadush@gatech.edu
We extend and improve upon the classic works of Lenstra 79 and Kannan 83 on Integer Programming in fixed dimension. We provide an algorithm to exactly minimize a convex function over the integer points in any compact convex set (suitably presented) of essential complexity O(n)^n, where n is the number of integer variables. Comparing to previous works, we provide the fastest algorithm for Integer Linear Programming and show how to extend generic convex optimization to the integer setting.
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3 - Rationing Policies in Two-Echelon Distribution Systems Frank W. Ciarallo, Wright State University, Dayton, OH, United States of America, frank.ciarallo@wright.edu, Zumbul Atan
We study two-retailer, one-warehouse systems with base-stock ordering and critical value rationing at the warehouse. Rationing policies reserve a portion of warehouse stock for replenishment orders from one retailer. Our study allows for an alternate path for orders from the lower priority retailer directly to the supplier when rationing is active. We develop a heuristic based on a cost approximation and evaluate its performance, as well as gain insight into the use of critical value rationing.
2 - Sell or Hold: A Simple Two-stage Stochastic Combinatorial Optimization Problem Qie He, Georgia Tech ISyE, 765 Ferst Dr NW, Atlanta, United States of America, qie.he@gatech.edu, Shabbir Ahmed, George Nemhauser
There are k out of n individual assets to be sold over two stages with known first-stage prices and distribution of second-stage prices. The sell or hold problem (SHP) is to determine which assets are to be sold at each stage to maximize the total expected revenue. We show that SHP is NP-hard when second-stage prices are realized as a finite set of scenarios. We identify a polynomially solvable case of SHP. A max{1/2,k/n}-approximation algorithm is presented for the scenariobased SHP.
3 - Facets for Single-node Capacitated Flow Set Using n-step MIR Kiavash Kianfar, Assistant Professor, Texas A&M University, TAMU 3131, College Station, TX, 77843-3131, United States of America, kianfar@tamu.edu
Pochet and Wolsey (1995) introduced partition inequalities for three substructures, namely the integer knapsack set with divisible coefficients and two forms of single-node capacitated flow set with divisible coefficients. We show that the n-step MIR inequalities of Kianfar and Fathi (2009) not only generate/dominate these partition inequalities but also give new facets for the generalization of the three sets above to the case where coefficients are not necessarily divisible.
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C - Room 213D
Choice and Assortment Planning

Contributed Session
Chair: Mrinmay Deb, Doctoral Student, Pennsylvania State University, 479 Business Building, University Park, State College, PA, 16802, United States of America, mud166@psu.edu 1 - An Objective Operational Learning Approach to Dynamic Assortment Planning Vivek Ramamurthy, University of California-Berkeley, 450/42 Sutardja Dai Hall, Berkeley, CA, United States of America, vivek_ramamurthy@berkeley.edu, Z. Max Shen
We consider the problem of determining the optimal assortment of products to offer to maximize the expected revenue, while making minimal assumptions about the customer demand model. We consider a model that constructs an objective estimate of the revenue, as a function of the assortment offered, and the demand estimated from sales data. The performance of the approach is studied using data from an online retailer.
4 - Optimal Toll Design: A Lower Bound Framework for the Traveling Salesman Problem Alejandro Toriello, Assistant Professor, University of Southern California, 3715 McClintock Avenue, GER 240, Los Angeles, CA, 90089, United States of America, toriello@usc.edu
We propose a framework of lower bounds for the asymmetric traveling salesman problem based on approximating the dynamic programming formulation, and give an economic interpretation wherein the salesman must pay tolls as he travels between cities. We then introduce an exact reformulation that generates a family of successively tighter lower bounds, all solvable in polynomial time. We discuss computational results on benchmark instances.
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C - Room 213BC
2 - Integrated Assortment, Shelf Space and Price Planning in Retailing Heinrich Kuhn, Professor, Catholic University of EichstaettIngolstadt, Production and Operations Management, Auf der Schanz 49, Ingolstadt, 85049, Germany, heinrich.kuhn@kueichstaett.de, Alexander H. Huebner
Category managers in retailing have to decide about the listings, facings, prices, and replenishment amounts. We propose a model that jointly optimizes all these decisions viewing category profit as a composite function of price- and spacedependent demand, consumer-driven substitution and price-dependent profit. The planning problem is modeled as a specialized knapsack problem and solved via CPLEX. The integrated solution increases profit significantly compared to the current retail practice.
Supply Chain Management

Chair: Gurhan Kok, Duke University, The Fuqua School of Business, Durham, NC, United States of America, gurhan.kok@duke.edu 1 - Centralized and Decentralized Dynamic Price and Lead Time Quotation Baykal Hafizoglu, Graduate Research Assistant, Arizona State University, 699 S. Mill Avenue, Tempe, AZ, 85281, United States of America, baykal@asu.edu, Pinar Keskinocak, Esma Gel
We discuss dynamic price and lead time quotation problem in a make-to-order system under two decision making settings: (1) centralized setting considers a central agent determining price and lead times jointly, and (2) decentralized setting assumes that price and lead time decisions are taken respectively by marketing and manufacturing departments. We analyze the optimal price and lead time decisions under both settings and discuss the inefficiencies of decentralized decision making.
3 - Managing Retail Product Lines under Cross-selling Effects Ameera Ibrahim, University of Massachusetts-Amherst, 121 Presidents Dr., Amherst, MA, 01003, United States of America, ameera@som.umass.edu, Ahmed Ghoniem, Bacel Maddah
We investigate joint assortment planning, dynamic pricing, and inventory management decisions for retail product lines under cross-selling effects. We propose a mixed-integer nonlinear programming model that is reformulated into a linearized equivalent. Managerial insights are discussed and computational results are reported for both exact and heuristic solution methods.
2 - Strategic Communication for Capacity Alignment with Pricing in a Supply Chain Hyoduk Shin, Assistant Professor, Northwestern University, Kellogg School of Management, Evanston, IL, 60201, United States of America, hyoduk-shin@kellogg.northwestern.edu, Noam Shamir, Leon Chu
We study demand information sharing in a supply chain. A retailer with demand information decides whether to strategically communicate his private information with the manufacturer, after which the manufacturer determines the capacity and the wholesale price. We show that if the value of information is large, the information can be voluntarily shared fully in a discrete demand distribution. Otherwise, in general, information will be shared partially depending on the value of information.
4 - Discrete Choice Models in Two Destinations Joo Hwan Seo, PhD Candidate, George Washington University, Funger Hall, Suite 301, 2201 G Street, NW, Washington DC, 20052, United States of America, joohwans@gwmail.gwu.edu, Jane Park
Discrete choice models imply choices between two or more discrete alternatives. In our paper, models investigate a spatial survey for Las Vegas and Atlantic City, preferences of visitors alternative choice and create a Geographic Information System based decision support. This research studies the important of factors relating to the consumers choice decision such as distance, consumer demographic, and perception.
5 - Joint Inventory Pricing and Assortment Decisions for Vertically Differentiated Products Mrinmay Deb, Doctoral Student, Pennsylvania State University, 479 Business Building, University Park, State College, PA, 16802, United States of America, mud166@psu.edu, Susan Xu
We determine the pricing, inventory, and assortment decisions of a retailer stocking quality differentiated products under consumer driven substitution (static). We consider two cases: demand is heterogeneous but deterministic (riskless case) and demand is heterogeneous but uncertain (risky case). We find that the optimal prices are higher in the risky case and the optimal risky assortment is a unique subset of the optimal riskless assortment.
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INFORMS Charlotte 2011 WE28

C - Room 215
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Environmental Operations
Contributed Session
Chair: Marshal Wang, Environment Canada, 10 Wellington Street, Gatineau, K1A 0H3, Canada, cheng-marshal.wang@ec.gc.ca 1 - Coupling Optimization and Simulation Techniques for the Optimal Design of Water Distribution Networks Birhanu Mengistu, Graduate Research Assistant, North Carolina A&T State University, 1601 E. Market Street, Greensboro, NC, 27411, United States of America, bmmengis@ncat.edu, ShoouYuh Chang
A cost minimization model of water distribution networks is constructed using a binary integer programming optimization technique linked with the hydraulic simulation solver, EPANET, for the optimal design. The model is then applied to three benchmark water distribution networks and the results are compared with those of earlier studies. While the resulting design is similar, the proposed model is user friendly and more efficient with respect to computational effort.
2 - Using Game Theory to Exploit the Impact of Information Sharing in Multi-level Supply-chain Network Brandon Ha, OR Graduate Student, Southern Methodist Univeristy, 317 Basswood Trl, Garland, TX, 75040, United States of America, dha@smu.edu, Andrew Yu
The objective of this research is to quantify the savings from demand information sharing at the different tier in a multi-level supply chain structure through reducing the bullwhip effect, explore the different information-sharing coalition scheme in the supply-chain, and identify the necessary conditions required to encourage and sustain each information-sharing coalition scheme. A game-theoretic approach is proposed to derive the optimal condition.
3 - Setting the Right Incentives for Global Planning and Operations Ulas Ozen, Alcatel-Lucent Bell Labs, Blanchardstown Industrial Park, Dublin, Ireland, ulas.ozen@alcatel-lucent.com, Henk Norde, Marco Slikker
We consider a firm selling a group of products that require the same production technology and share resources through multiple regional business units. The demand in each region is stochastic and best observed by the regional units. The firm is engaged in global planning and manufacturing activities and relies on the regional units forecasts. In this research, we are studying incentive mechanisms that induce the business units to reveal their private information truthfully and work hard.
2 - Mindful Greening: Creating Change in a Corporate Wasteland Kimberly Howell, Pacifica Graduate Institute, 21200 Kittridge Street, #4128, Woodland Hills, CA, 91303, United States of America, howell.kim@gmail.com
The organizational hero is a past perception replaced in recent decades by a capitalistic protagonist who wins at any cost regardless of environmental fallout. Organizational greening, the notion of becoming more ecologically mindful, begins with understanding the effects of materialism and deindividuation. Mindful greening practices such as storytelling, ritual, and myth, can create environments upon which more ecologically-sound practices can be built and sense of community harvested.
4 - Inventory Management with Advance Demand Information and Two Demand Classes Sourish Sarkar, PhD Candidate, Virginia Polytechnic Institute and State University, 250 Durham Hall, Blacksburg, VA, 24061, United States of America, sourish@vt.edu, John Shewchuk
We consider an inventory system serving two demand classes that differ in their backorder costs. Additionally, only one class provides advance demand information and allows early fulfillment. We show the benefit of early fulfillment and investigate suitable replenishment and allocation policies to minimize the holding and backorder costs.
3 - Did the Provincial Regional Features Influence the Corporate Philanthropic Disaster Response? Zhao Xiaoqin, Xian Jiaotong University, The School of Management, Xian, China, zxq_play@yahoo.cn, Wan Difang
By using the data of corporate philanthropic donation after 512 Wenchuan Earthquake of China, the research conducted the empirical research on how the features of 31 provinces of China mainland influenced the corporate philanthropic behavior. The result showed the amount and the number of enterprises donation were directly proportion to the provinces economic development level. And the local government did not directly intervened but had some government-oriented potence in firms donation.
5 - Information Acquisition and Voluntary Disclosure in an Export-processing System Long Gao, Assistant Professor, University of California-Riverside, Riverside, CA, 92521, United States of America, longg@ucr.edu, Zhalin Li
We study voluntary information sharing in the export-processing trade mode, where the buyer provides the raw materials to the supplier, who faces random yield and receives a fee for processing and exporting the final products. We show that the supplier with low and high yields may withhold the information while the supplier with medium yields may disclose. Our analysis underscores that voluntary information sharing should be viewed as an integral part of corporate optimal strategies.
4 - The Hybrid Economy-energy-Environment Model and Animated Data Visualization Marshal Wang, Environment Canada, 10 Wellington Street, Gatineau, K1A 0H3, Canada, cheng-marshal.wang@ec.gc.ca
In this talk, first I will review the developments of the hybrid model: ECIAM(Environment Canada-Integrated Assessment Model) from the prospective of Canadian Federal Government. It is an intertemporal multi-region multi-sector general equilibrium model for analyzing the regional and global effects of climate policies. Then I will demonstrate our results of EC-IAM model and E2020 model using animated bubble chart, motion bar chart and map visualization.
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C - Room 217A
Operational Technology for Patient Flow Improvement

Chair: Gilles Reinhardt, Associate Professor, DePaul University, 1, E., Jackson Blvd., Chicago, IL, 60604, United States of America, greinhar@condor.depaul.edu 1 - Admission Policies in a Neurological Hospital Ward Saied Samiedaluie, McGill University, Montreal, QC, Canada, saied.samiedaluie@mail.mcgill.ca, Vedat Verter, Beste Kucukyazici, Dan Zhang
In this paper, we study patient admission policies in a neurological hospital ward, where there are multiple patient types with different medical characteristics. The patients need to wait in ED or ICU until a hospital bed is assigned to them. Each type of patient has different arrival rate, average length of stay and waiting cost. The problem is formulated as an average cost dynamic program over infinite horizon. An approximate dynamic programming to solve the problem is also presented.
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C - Room 216B
Information in the Supply Chain II

Contributed Session
Chair: Long Gao, Assistant Professor, University of California-Riverside, Riverside, CA, 92521, United States of America, longg@ucr.edu 1 - A Simulation Study of Outsourced Transportation Configurations in a Retail Supply Chain Stephane Collignon, PhD Student, Virginia Tech, 1007 Pamplin Hall, Blacksburg, VA, 24060, United States of America, stephane@vt.edu, Deborah Cook, Tabitha James
The influence of information sharing on SC transportation outcomes has received less attention than its equivalent on inventory levels, backorders, etc. This study compares, through simulation, the effects of two information sharing scenarios on the performance of the transportation component of a retail SC. We examine implementations of partnerships by organizations that influence operational behaviors, which in turn impact transportation outcomes.
2 - A Systems Approach to Emergency Department Congestion Hannah Wong, PhD, Harvard Medical School, 101 Merrimac Street, 10th Floor, Boston, MA, 02114, United States of America, Wong.Hannah@mgh.harvard.edu, Howard Abrams, Dante Morra, Robert Wu, Michael Caesar
This project uses system dynamics principles to assemble the ideas and simulate the problem of patients boarding in the Emergency Department (ED). The modeling process provided clinicians and managers with a new awareness of the interdependencies of their strategic and operational-level decisions. It also empowered them to move forward with redesign of sustainable strategies that significantly improved their ED performance.
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distributed coordination and agent negotiation for such domains and aims to optimize multiple competitive objectives.
3 - Emergency Department Patient Flow Simulations Using Spreadsheets Michael Klein, PhD Student, McGill University, 1001 Sherbrooke Street West, Montreal, QC, Canada, michael.klein2@mail.mcgill.ca, Gilles Reinhardt
We propose a discrete-event simulation platform that runs in spreadsheets. The popularity of spreadsheet programs makes such simulation more accessible to stakeholders who may rely on it to test the value of potential interventions, to develop utilization and performance expectations, or as a medium to long range budgeting and planning tool.
3 - A Multi-agent Model for Optimizing Alerting Decisions in the Case of a Disease Outbreak Emine Yaylali, North Carolina State University, 375 Daniels Hall, Raleigh, NC, 27695, United States of America, eyaylal@ncsu.edu, Julie Ivy
We develop a two-agent decentralized POMDP model of the public health system where local and state health departments are decision makers. The model seeks to identify an infectious disease outbreak such as, H1N1 and pertussis, issue a timely alert and initiate mitigation actions. An iterative heuristic based on finitegrid approximation method is developed to identify alerting policies that consider the trade-offs between early and late alerting and structural properties are explored.
4 - Mobile Technology for Patient-Flow Management: An Application for the NEDOCS Score Gilles Reinhardt, Associate Professor, DePaul University, 1, E., Jackson Blvd., Chicago, IL, 60604, United States of America, greinhar@condor.depaul.edu
The NEDOCS score is a measure of crowding that uses common values. The complexity of the formula and the specificity of its model hinder its effective implementation and usage. We developed a mobile application allowing users to compute and disseminate the score on demand. It is also customizable (coefficients & thresholds, and aggregation across regions EDs). It also provides push notifications, trend charts, and the ability to download historical input and results for longer term analysis.
4 - A Survey of Applications of Agent-Based Modeling and Simulation to Healthcare Operations Management Stuart Price, University of Maryland, College Park, MD, United States of America, sprice@rhsmith.umd.edu, Sean Barnes, Bruce Golden
Agent-based modeling (ABM) is gaining momentum in many fields and it has added to the insights previously contributed by other methods such as system dynamics and discrete event simulation. Healthcare operations management is one field that is particularly well-suited for ABM. In this paper, we summarize these applications.
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C - Room 217D
Panel Discussion: Integrated Nanomanufacturing and Nanoinformatics Research

Chair: Lijuan Xu, PhD Student, University of Southern California, Los Angeles, CA, United States of America, lijuanxu@usc.edu 1 - Integrated Nanomanufacturing and Nanoinformatics Research Moderator: Lijuan Xu, PhD Student, University of Southern California, Los Angeles, CA, United States of America, lijuanxu@usc.edu, Panelist: Qiang Huang
Nanomanufacturing poses significant challenges for process modeling and control. A panel of discussants will share their experiences and perspectives regarding the tremendous research opportunities for QSR community.
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Topics in Information Systems Research

Chair: Monica Johar, Assistant Professor, University of North Carolina, 9201 University City Blvd, Charlotte, NC, 28223, United States of America, msjohar@uncc.edu 1 - Exploraration and Exploitation in Open Source Software Development Ram Kumar, Professor, University of North Carolina at Charlotte, Charlotte, NC, 28223, United States of America, rlkumar@uncc.edu, Orcun Temizkhan
Open Source Software (OSS) is developed through voluntary contributions of software developers. Software developers perform exploitation and exploration activities during the OSS development process. Exploitation activities focus on incremental improvements in software. In contrast, exploration activities focus on somewhat more radical changes in software. We compare and contrast exploration and exploitation networks in the context of OSS development.
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C - Room 218A
Multi-agent Models on Public Health, Energy and Policy

Chair: Emine Yaylali, North Carolina State University, 375 Daniels Hall, Raleigh, NC, 27695, United States of America, eyaylal@ncsu.edu 1 - A Distributed Newton Method for Network Utility Maximization Ermin Wei, Department of Electrical Engineering and Computer Science, Massaachusetts Institute of Technology, 32 Vassar St., 32-D640, Cambridge, MA, 02139, United States of America, erminwei@mit.edu, Ali Jadbabaie, Asuman Ozdaglar
This work develops a distributed Newton-type fast converging algorithm for Network Utility Maximization problems, which can be implemented using the same distributed information exchange mechanism as existing first order methods. We show that even with inexact computation at each step, the objective function value still converges superlinearly to an explicitly characterized error neighborhood. Simulation results demonstrate significant convergence rate improvement over first-order methods.
2 - Rethinking the Role of Public Beta Testing Xun Li, The University of North Carolina at Charlotte, Charlotte, NC, United States of America, xli26@uncc.edu, Sree Nilakanta, Kevin Scheibe, Zhengrui Jiang
Many firms are relying on public beta testing to improve software quality. While the benefit of quality assurance is well recognized, two market-related benefits, resulting from word-of-mouth and network externality, have not been analyzed. We consider both the reliability-side and the market-side of benefits, and develop models to determine the optimal number of public testers and the optimal duration of testing. We find that market-related benefits can substantially increase the total profit.
3 - Optimizing Software Reuse Policies: A Control Theoretic Approach Monica Johar, Assistant Professor, University of North Carolina, 9201 University City Blvd, Charlotte, NC, 28223, United States of America, msjohar@uncc.edu, Suresh P. Sethi, Vijay Mookerjee
We study optimal policies for local and global reuse in a software project using a control theoretic approach. We first consider a local reuse policy where the benefits of reuse activities are restricted within the project. Next we consider two sequentially linked projects where local reuse in the first project has global effects: some or all of the reuse capital accumulated in the first project benefits the downstream project. We also propose a coordination scheme.
2 - Teamwork in Applications for Energy Conservation: Distributed Coordination under Uncertainty Jun-young Kwak, PhD Student, University of Southern California, 3737 Watt Way, PHE 514, Los Angeles, CA, 90089, United States of America, junyounk@usc.edu, Farrokh Jazizadeh, Geoffrey Kavulya, Burcin Gerber, Milind Tambe, Pradeep Varakantham, Laura Klein
Recent developments in multiagent systems are opening up the possibility of exciting applications for energy conversation. As humans begin to interact with complex building systems, it becomes crucial that the resulting team reasons about coordination and negotiation among team members under uncertainty inherent in the real-world. This work presents a novel planning method for
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WE47
WE45
Energy Systems
Contributed Session
Chair: Shaya Sheikh, Case Western Reserve University, Olin 61310900-Euclid Avenue, Cleveland, OH, 44120, United States of America, shaya.sheikh@case.edu 1 - Power Distribution Network Design Model with New Supply and Demand Nodes Feng Jin, IBM Research - China, ZhongGuanCun Park,Building 19, BeiJing, China, jinfsh@cn.ibm.com, Oktay Gunluk, Wenjun Yin, Jin Dong, Xinjie Lv
Power distribution network design is a very important task to satisfy the everincreasing requirements from economic and social development. But we need to choose some projects to be carried out because of total budget or many other constraints. With power distribution network design model, we can automatically give suggestions on the optimized location of new substation and power supply path.
Statistics and Quality Control II

Contributed Session
Chair: Chang-Ho Chin, Kyung Hee University, 1 Seocheon-dong, Giheung-gu, Yongin-si, Korea, Republic of, chin@khu.ac.kr 1 - Multi-Criteria Number Partitioning: An Application in Analysis of Covariance Robert Howley, Lehigh University, Harold S. Mohler Laboratory, 200 West Packer Avenue, Bethlehem, PA, 18015, United States of America, roh210@lehigh.edu, Robert Storer
An extension of the number partitioning problem, multi-criteria number partitioning (MCNP), is examined and a generalization of the Karmarkar-Karp algorithm is presented as an approximate solution. Using MCNP to partition covariates into subgroups of equivalent distributions is shown to be an effective tool in enhancing the power of Analysis of Covariance based simulation experiments.
2 - Efficiency Analysis of Turkish Electricity Distribution Firms Using Stochastic Frontier Analysis Aydin Celen, Chief Expert on Competition, Turkish Competition Authority, Bilkent Plaza, B3 Blok, Ankara, 06800, Turkey, acelen@Rekabet.gov.tr, Cem Iyigun
We measured the technical efficiency levels of the electricity distribution firms in Turkey during 2002-2009 periods. For this aim, we utilized the stochastic frontier models of Battese and Coelli (1992 & 1995) with multi-output translog input distance function. Using different input and output variables we produced six different alternative model specifications. The results showed that the first order coefficients of the variables in all models are statistically significant.
2 - Feature Extraction and Classification in Pattern Recognition and Their Application in Economy Pawel Blaszczyk, University of Silesia, Institute of Mathematics, Poland, pblaszcz@math.us.edu.pl
Feature extraction and classification are the basic methods used to analyze and interpret economic data. The number of samples is often much smaller than the number of features. In this situation it makes impossible to estimate the classifier parameters properly and the classification results may be inadequate. In this case it is important to decrease the dimension of the feature space. This can be done by feature extraction. In this paper we present new feature extraction method. Our method is an extension of the classical PLS algorithm. A new weighted separation criterion are applied.
3 - Application of Local Weather Forecasting in New Energy Field Yuhui Fu, IBM China, Diamond Building, ZhongguancunSoftwarePark, Beijing, China, fuyuhui@cn.ibm.com, Haifeng Wang, Jin Dong, Wenjun Yin, Ming Xie
The ratio of new energy in total energy consumption of China is ascending continuously and quickly. But not all of the power produced by new energy system could be used, because these kind of energy are usually unstable and could do damage to the grid. To make better use of it, power prediction and weather forecasting is needed. The weather forecasting is also used in Microgrid field. The paper explained the structure of this kind of application and some related issues.
3 - Decompounding Poisson Random Sums Based on Properties of Integer Numbers Masoud Kamgarpour, Postdoctoral Fellow, University of British Columbia, Mathematics Department, 2603-668 Citadel Parade, Vancouver, BC, Canada, masoudkomi@gmail.com, Hamed Hasheminia, David Gillen
Poisson counting process with bulk arrivals are seen in various applications such as queuing theory. Usually estimating the parameters of compound Poisson processes are mathematically and computationally cumbersome. We develop various easy to compute estimators based on the properties of integer numbers and prove consistency of the estimators. We also test our models with different numerical examples.
4 - Rule-based Data Verification and Improvement in Power Distribution Network Evaluation Jinyan Shao, IBM Research, Building 19A, Zhongguancun Software Park, Haidian District, Bejing, China, shaojiny@cn.ibm.com, Wenjun Yin, Feng Gao, Xinjie Lv, Tianzhi Zhao, Ming Xie
The quality of data is one of the most critical factors that impact the effectiveness and result of power system evaluation. Unfortunately, it is a very common problem in power distribution systems that some abnormal data disturb and debase the evaluation process and results. Here, we present a rule-based approach to detect these data and then make proper verification and improvement. The effectiveness of this approach is verified in the evaluation of a district-level power distribution network.
WE47
Policy Analyses for Freight Transportation and Logistics

Chair: Ahmad Jarrah, Associate Professor, The George Washington University, Department of Decision Sciences, Washington, DC, United States of America, jarrah@gwu.edu 1 - Operational Changes versus External Policies for Cost and Emissions Reductions Anne Goodchild, Assistant Professor, University of Washington, Civil and Environmental Engineering, Seattle, WA, United States of America, annegood@u.washington.edu, Felipe Sandoval
Two pick-up and delivery companies are used as case studies to examine the relative impact of operational changes versus external policies on cost, emissions, and service quality. It is found that both cost and emissions can be reduced through internal changes, whereas external policies do not simultaneously improve cost and emissions.
5 - Design and Operation of Hybrid and Integrated Energy Systems Shaya Sheikh, Case Western Reserve University, Olin 613-10900Euclid Avenue, Cleveland, OH, 44120, United States of America, shaya.sheikh@case.edu, Behnam Malakooti, Camelia Al-Najjar, Matthew Lehman
This paper presents Integrated Energy Systems that deal with energy supply and energy demand variations in different periods. We consider two scenarios for this system. Fixed demand scenario is solved using integer linear programming solvers such as LINGO. Stochastic demand scenario is solved using Frank-Wolfe method. We also develop a multi-objective optimization considering total cost and environmental impacts and discuss a numerical example for multi-objective integrated energy model.
2 - A Statistical Process Control System for Infrastructure Performance Monitoring Pablo Durango-Cohen, Associate Professor, Northwestern University, 2145 Sheridan Road, A332, Evanston, IL, 60208, United States of America, pdc@northwestern.edu, Yikai Chen, David Corr
Statistical process control has been widely used to monitor the performance of manufacturing and financial systems. Such systems alert decision makers of systematic, temporary or permanent changes. In this presentation we discuss the development of a framework to monitor transportation infrastructure, and present results from an implementation on The Hurley Bridge (Wisconsin Structure B-26-7).
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WE48

3 - Shipment Consolidation Policy Analysis with Stepwise Freight Costs Dincer Konur, Industrial and Systems Engineering, University of Florida, Gainesville, FL, United States of America, dincer@ufl.edu, Joseph Geunes
We analyze shipment consolidation policies that explicitly account for transportation costs, including per-truck capacity and variable costs. We use a set partitioning formulation, where each element of the partition corresponds to the subset of consolidated items. We apply a branch-and-price approach and propose heuristic methods for solving the resulting nonlinear set partitioning problem.
Applications of Facility Planning

Contributed Session
Chair: Vladimir Marianov, Pontificia Universidad Catolica de Chile, Avda. Libertador Bernardo OHiggins 340, Santiago, Chile, marianov@ing.puc.cl 1 - Sequential Clustering for Police Districting Christopher Rump, Associate Professor, Bowling Green State University, College of Business Administration, Applied Statistics & Operations Research, Bowling Green, OH, 43403-0267, United States of America, cmrump@bgsu.edu
We consider the problem of designing police command districts and, at a more granular level, police patrol beats. In doing so, we consider a hierarchy of clustering objectives to measure the overall distance within each formed district. The districting design optimization problem is modeled heuristically as a sequential clustering problem that for most choices of clustering objective can be solved efficiently via its linear programming relaxation.
4 - Reconfiguring the P&D Networks of a Major Carrier Ahmad Jarrah, Associate Professor, The George Washington University, Department of Decision Sciences, Washington, DC, United States of America, jarrah@gwu.edu, Jonathan Bard
We use large-scale geographic contiguous clustering to analyze the P&D commercial and residential networks for a major carrier. We present scenarios for complete or partial merging of the two networks, and assess the potential savings. We present the basic clustering model used with the required modifications for the various scenarios.
WE48
Multi-modal Issues in Freight Transportation

Contributed Session
Chair: Kok-Choon Tan, Associate Professor, NUS Business School, Department of Decision Sciences, 15 Kent Ridge Drive, Singapore, 119245, Singapore, biztkc@nus.edu.sg 1 - Manhattan Associates Domestic Common Carrier Shipment Planning Engine Aykagan Ak, Senior Science Analyst, Manhattan Associates, 2300 Windy Ridge Pkwy, Atlanta, GA, 30339, United States of America, aak@manh.com, Kim Ross, Srinivas Nandiraju
In domestic shipment planning, a shipper needs to seamlessly perform shipment planning across multiple modes like TL, LTL, and Rail etc. Shipment planning needs to handle the complex rate structures across the modes and also meet carrier capacities negotiated during transportation procurement. In this talk we will present an overview of Manhattan Associates Shipment planning engine and discuss how some of the major US retailers plan their day-to-day transportation shipments with this engine.
2 - Electric Vehicle Charging Facility Network Planning Lili Zhao, IBM Research China, Diamond Building A, Zhongguancun Software Park #19, Beijing, 100193, China, zhaolil@cn.ibm.com, Ming Xie, Qiming Tian, Bin Zhang, Wenjun Yin, Jin Dong
With the rapid development of Electirc Vehicle(EV) in marketplace, as the energy source of EV, charging facilities deployment has become more and more urgent. A scientific charging network planning methodology can help lower the networks unfavorable impact on grid and promote the networks service capability for customers. In our paper, we make comparison analysis of different charging facility formats, and present an approach to plan and optimize charging facility network.
3 - Fortification of Cell Phone Towers for Disaster Survival Vladimir Marianov, Pontificia Universidad Catolica de Chile, Avda. Libertador Bernardo OHiggins 340, Santiago, Chile, marianov@ing.puc.cl, H. A. Eiselt
We fortify cell phone towers so to maximize coverage and minimize expected or worst-case loss of communications after natural disasters. The model is applied to a region in the south of Chile that was stricken by a magnitude 8.8 earthquake. Computational results are provided for a variety of scenarios.
2 - Optimizing the Expected NPV in a Multimodal Transportation Network Alejandro Garcia del Valle, Full Professor, University of A Coruna, Polytechnic School, Mendizabal s/n, Ferrol, 15403, Spain, agvalle@udc.es, Rosa Rios Prado, David del Rio Vilas, Juan Manuel Bastida Sardia, Javier Faulin, Diego Crespo Pereira
Multimodal transportation is generally accepted as an efficient alternative to road transportation in terms of costs, fuel consumption, environmental externalities and road congestion. This work presents a novel optimization approach to the multimodal network design for internal Spanish freight transportation. Optimization is conducted in order to maximize the expected NPV. Service utilization rates are evaluated by means of a parameterized model implemented in TRANSCAD.
WE54
Joint Panel Discussion Analytics/CPMS: Consulting Firms Share Their Lessons Learned on how to Create Significant Impact with Optimization and Advanced Analytics at Their Client Organizations
Chair: Steve Sashihara, CEO, Princeton Consultants, 2 Research Way, Princeton, NJ, 08540, United States of America, ssashihara@princeton.com 1 - Consulting Firms Share Their Lessons Learned on how to Create Significant Impact with Optimization and Advanced Analytics at Their Client Organizations Moderator: Michael Menche, Princeton Consultants, Inc., 2 Research Way, Princeton, NJ, 08540, United States of America, mmenche@princeton.com, Bill Thoet, Senior Vice President, Booz Allen Hamilton, McLean VA, United States of America, Thoet_William@bah.com
In this panel, leaders of consulting practices specializing in Optimization and Advanced Analytics discuss their experiences in how to structure and deliver successful engagements that range from operational improvement, to marketing, to strategy. Questions discussed will include: in what ways are successful optimization projects different classic IT projects? To what extent does optimization change the consulting firms deliverables to clients? To what extent does optimization change the consulting firms deliverables to clients? What is the role of optimization in strategy engagements? When and to what extent should the deliverable to the client include a live model rather than a static report based on a model? What are the pros and cons? Does optimization software change the consultants traditional status as trusted advisor? What are the best ways to leverage and work with a clients in-house OR department? After examining these issues, this panel will discuss their best practices for staffing, implementing, and scaling up optimization projects, as well as road bumps and roadblocks along the way.
3 - Freight Cost Minimization at a Global Mining Company Kok-Choon Tan, Associate Professor, NUS Business School, Department of Decision Sciences, 15 Kent Ridge Drive, Singapore, 119245, Singapore, biztkc@nus.edu.sg, Jie Sun, Run-Yan Tan
This paper presents an application of linear programming to a global mining companys freight cost minimization problem. We describe a simple spreadsheet implementation of the linear programming solution which resulted in annualised savings estimated to be about two million Singapore dollars.
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WE61
Alternate Strategies for Aviation Systems Planning

Chair: Regina Clewlow, PhD Candidate, Engineering Systems, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, rclewlow@mit.edu 1 - The Impact of High-speed Rail on Air Traffic: Implications for Aviation System Planning Regina Clewlow, PhD Candidate, Engineering Systems, Massachusetts Institute of Technology, 77 Massachusetts Avenue, Cambridge, MA, 02139, United States of America, rclewlow@mit.edu
The development of high-speed rail in Europe and Asia has had a substantial impact on aviation market share, particularly for short-haul travel. We examine the impact of high-speed rail on air travel demand through an econometric analysis, exploring variations in how rail improvements influence the evolution of air traffic. The results have significant implications for aviation system planning, including potential strategies to reduce carbon emissions.
3 - Optimizing Engineering Improvements for Civil Infrastructure Systems Vulnerable to Natural Hazards Brian Piper, North Carolina State University, 7801-102 Mayfaire Crest Lane, Raleigh, NC, 27615, United States of America, bepiper@ncsu.edu, Ranji Ranjithan, John Baugh, Downey Brill
We present a mathematical programming framework for optimizing civil infrastructure system (CIS) improvement decisions to protect against natural hazards. Several performance criteria are defined, including some to consider the resilience of the CIS to support critical lifeline services after a disruption. Using an illustrative example, we present a comparison of these resilience measures for several decision scenarios.
WE59
Knowledge Management in Service

Chair: Robert Burgess, Georgia Tech, College of Managemenet, Atlanta, GA, 30308, United States of America, Robert.burgess@mgt.gatech.edu 1 - Dynamic Knowledge Management with Rotating Personnel Resources in a Service Setting Robert Burgess, Georgia Tech, College of Management, Atlanta, GA, 30308, United States of America, Robert.burgess@mgt.gatech.edu, Craig Hill
Many service environments struggle with knowledge management and its continuity going forward. Some organizations are further constrained by gaining and losing their operating personnel based on a finite planning horizon. This presentation reports on the investigation of this problem as it specifically impacts several organizations on college campuses.
2 - Reorganization of the Airline Industry A Holistic Approach John Kettelle, Arlington, VA, United States of America, kettelle1@earthlink.net
This paper explores the remarkable efficiencies obtainable by combining all the surviving U.S. airlines into OBA (One Big Airline) - cutting the total cost of providing current passenger travel by about 80%! This cooperative (instead of competitive) approach is clearly contrary to a basic principle of our capitalist system, and presents an exciting challenge to the airline industry and to capitalism itself.
3 - Demand Substitution in the Airline Industry Valery Pavlov, University of Auckland, 12 Grafton Road, Auckland, New Zealand, v.pavlov@auckland.ac.nz, Tava Olsen
The value of demand substitution has been long recognized by both practitioners and academics. However, while in some industries it has become an everyday practice, it barely exists in some other. The focus of our study is on the airline industry in which the form of demand substitution we propose is not yet applied widely. We give a simple mechanism for demand substitution that can be beneficial for an airline.
2 - Adaptive Replication: The Reutilization of Knowledge Assets in Fast Changing Environments Stefano Miraglia, Imperial College Business School, Tanaka Building, South Kensington Campus, London, SW7 2AZ, United Kingdom, stefano.miraglia@imperial.ac.uk, Andrea Prencipe, Andrew Davies
Reusing knowledge entails dealing with two opposing forces: while the advantages of replication push for reproducing knowledge exactly, exogenous changes impose some adaptation. This qualitative study analyzes two large firms that have been dealing with replication and adaptation for decades. Findings show that replication and adaptation are treated as interplaying rather than opposed. The new concept of adaptive replication is introduced to explain such interplay.
WE58
Disaster Relief Planning and Operations II

Chair: Brian Piper, North Carolina State University, 7801-102 Mayfaire Crest Lane, Raleigh, NC, 27615, United States of America, bepiper@ncsu.edu 1 - Integrated Management of Emergency Vehicle Fleet Elham Sharifi, Research Assistant, University of Maryland, Department of civil and Environmental Eng., 1173 Glenn L. Martin Hall, UMD, college park, MD, 20742, United States of America, esharifi@umd.edu, Ali Haghani, Hadi Sadrsadat
In an Emergency Response System the response time plays a crucial role in minimizing the adverse impacts such as fatalities and loss of property. Response time not only is related to a dispatching system but also has a close relationship with area-coverage of emergency vehicles. The objective of this research is providing a model that can help reduce the response time and improve service level by accounting for the Coverage Problem, Deployment Problem and Routing Problem of emergency vehicles.
WE61
Public Transportation
Contributed Session
Chair: Virot Chiraphadhanakul, Massachusetts Institute of Technology, 77 Massachusetts Avenue E40-130, Cambridge, MA, United States of America, virot@mit.edu 1 - Solving Dynamic Multi-depot Dial-a-ride Problem Using a Heuristic Based on Clustering First-routing Taehyeong Kim, University of Maryland-College Park, 1173 Glenn L. Martin Hall, College Park, MD, 20742, United States of America, tommykim@umd.edu, Ali Haghani
In this paper, a heuristic based on clustering first-routing second has been developed for the static DARP model. The static heuristic has been extended to on-line heuristic for the dynamic DARP. In dynamic DARP, no-shows, accidents, cancellations, and new requests are considered for scheduling and routing. This on-line heuristic is tested on the framework of simulation that is made based on real world problem.
2 - Models for Logistics and Transportation Procurement in Humanitarian Settings Zhenyu (Edwin) Shi, Ph.D Candidate, Northwestern University, 2145 Sheridan Road, Room 210, Evanston, IL, 60208, United States of America, edwinshi@u.northwestern.edu, Karen Smilowitz, Irina Dolinskaya
In light of recent humanitarian needs, web-based platforms have emerged to facilitate logistics and transportation procurement. However, many rely on manual vetting and matching of parties. Beginning with a simple setting, we present models to systematically screen and match parties for large scale operation in humanitarian relief.
2 - Demand Driven Transport under Large Demands Chandrasekhar Prabala, Infosys Technologies Ltd., Emp. No. 94067, Electronics City, Hosur Road, Bangalore, India, 560100, India, venkata_p@infosys.com, G N Srinivasa Prasanna
We present results from simulations of dynamic dial-a-ride problem under large user demands, typical to developing nations. We present an analysis of heuristics developed to address the problem and consider the case of a fleet of small buses/ vans finely distributed throughout a city, under large demands. Our simulations indicate that high vehicle fills can be obtained with low delay; we compare the quality of solutions with ILP bounds.
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WE62

2 - An Exact Algorithm for Solving Multiobjective Integer Programs Angela Ward, Graduate Student, Clemson University, Department of Mathematical Sciences, Martin Hall, Box 340975, Clemson, SC, 29634-0975, United States of America, arhowar@clemson.edu, Matthew Saltzman, Margaret Wiecek
An algorithm based on the weighted-Chebyshev scalarization for identifying all Pareto points of multiobjective integer programs is proposed. The number of iterations is linear in the number of points and the weights used in any iteration are completely determined by the current set of points. Computational results are included.
3 - Incremental Bus Schedule Design: Combining Limited-stop and Local Bus Services Virot Chiraphadhanakul, Massachusetts Institute of Technology, 77 Massachusetts Avenue E40-130, Cambridge, MA, United States of America, virot@mit.edu, Cynthia Barnhart
Limited-stop or express bus services have been operated in many cities around the world to shorten travel times thereby making public transit a more attractive choice for commuters. We propose in this work an optimization model that, given a current bus route and its frequency over a certain period, determines (1) bus stops along the route to be served by the express service and (2) the frequency allocation between the express and local services such that the user surplus is maximized.
WE62
3 - Comparing Scalarization Methods for Bicreteria Discrete Optimization Problems Metin Turkay, Professor, Koc University, Rumelifeneri Yolu, Sariyer, Istanbul 344, Istanbul, 3440, Turkey, mturkay@ku.edu.tr, Gokhan Kirlik
Generating entire efficient set for bicriteria discrete optimization problem is one of challenging problems of operations research literature. In this study, wellknown scalarization methods are compared with respect to computational efficiency. Additional to well-known methods, augmented form of epsilonconstraint method is modified. All methods are coded in C++ by using CPLEX concert technology. The algorithms are tested on bicriteria knapsack problem instances in various types and sizes.
Closed Loop and Reverse Supply Chain

Contributed Session
Chair: Wenbo Shi, Iowa State University, 3004 IMSE, Ames, IA, United States of America, wenboshi@iastate.edu 1 - Closed Loop Supply Chains for U.S., Japan and EU Auto Industries - A System Dynamics Study Sameer Kumar, Professor of Operations and Supply Chain Management, Opus College of Business, University of St. Thomas, Mail # TMH343, 1000 LaSalle Avenue, Minneapolis, MN, 55403, United States of America, skumar@stthomas.edu
System Dynamics analysis of the U.S., Japan and EU auto industries reverse value chains was conducted to explore the impact of government regulations, financial incentives and market pricing for remanufactured and recycle materials on cash flows and use of such raw materials for car manufacturers in these three market segments.
4 - Solutions for Weakly Connected ANP Decisions Models Orrin Cooper, University of Pittsburgh, Mervis Hall, Pittsburgh, PA, United States of America, orc1@pitt.edu
Strongly Connected Decisions decisions where each alternative possesses every attribute considered are rare in decision making. An AHP/ANP theorem requires alternatives and criteria to be strongly connected. The required information for a strongly connected network exists; but not in the Supermatrix. With additional comparisons the network can be strongly connected. This methodology can simplify ANP cluster comparisons. This approach is applied to Third Party Logistics Provider Selection.
2 - E-Scrap Reverse Supply Chain Model with Mass Customization and Channel Flexibility I-Hsuan Hong, Assistant Professor, National Taiwan University, Industrial Engineering, 1, Sec. 4, Roosevelt Road, Taipei, 106, Taiwan - ROC, ihong@ntu.edu.tw, Jr-Fong Dang, Chon-Hou Lo
Many enterprises cooperate with third-party service providers to bear responsibilities for part (or all) of recycling operations of waste electronics. We propose a two-stage game model where the manufacturer (leader) designs the optimal contract rent for the third-party service provider (follower) and the follower determines the optimal reward money for customers. We further discuss how mass customization and flexibility of recycling channel have impacts on both parties decisions.
WE65
Operations Management II
Contributed Session
Chair: Mark Van Oyen, Associate Professor, University of Michigan, 3249 Rockcress CT, Ann Arbor, MI, 48103, United States of America, vanoyen@umich.edu 1 - Dynamic Policies in Knowledge-based Service System Qifeng Shao, PhD Candidate, Northwestern University, 2145 Sheridan C210, Evanston, IL, 60208, United States of America, qshao@northwestern.edu, Seyed Iravani
We propose a modeling framework of a knowledge based service system. With help from a feed back system, the agent adjusts processing strategies to deal with different types of customers. Since the optimal strategy has a complex structure and hard to implement, we examined several heuristics and found effective policies with simple threshold design.
3 - Reverse Supply Chains with Landfill Considerations Wenbo Shi, Iowa State University, 3004 IMSE, Ames, IA, United States of America, wenboshi@iastate.edu, Jo Min, Karla Valenzuela
We formulate and analyze reverse supply chains consisting of remanufacturers and landfill operators under a Stackelberg game framework. The resulting equilibrium analyses show that an increase in the disposal fee encourages remanufacturing activities when the fee is relatively low while discourages these activities when the fee is relatively high. We also examine the role of the governments environmental policy via economic incentives.
WE63
2 - A Biased Random-key Genetic Algorithm for the Order Batching Problem in Distribution Warehouses Soeren Koch, Otto-von-Guericke-University Magdeburg, Universitaetsplatz 2, Magdeburg, 39106, Germany, soeren.koch@ovgu.de
Order picking is a warehouse function that deals with the retrieval of articles from the warehouse in order to satisfy customer demands. The problem considered here, deals with the question of how different orders should be grouped (batched) into more substantial ones, with respect to a minimization of the total tour length. For the solution of this problem, a highly competitive hybrid algorithm based on a biased random-key genetic algorithm and a local search procedure is presented.
Multicriteria Decision Making

Contributed Session
Chair: Orrin Cooper, University of Pittsburgh, Mervis Hall, Pittsburgh, PA, United States of America, orc1@pitt.edu 1 - A Multiobjective Model for Warranty Policies Integrating Product Quality, Market Share, and R&D Cost Jayprakash Patankar, Professor of Management, The University of Akron, CBA, Akron, OH, 44325-4801, United States of America, jgp@uakron.edu, Amitava Mitra
This paper considers warranty policies involving two attributes. Product failure rate is influenced by usage rate, product age and research and development expenditures. Market share is influenced by warranty time, usage limit, price and quality. An integrated model addresses goals such as attainment of market share and net profit per unit.
3 - Dynamic Scheduling of a Flexible N Queuing Network under CONWIP Mark Van Oyen, Associate Professor, University of Michigan, 3249 Rockcress CT, Ann Arbor, MI, 48103, United States of America, vanoyen@umich.edu, David Singer, Fang Dong
We investigate the control of dynamic execution level control of an N queueing network with a CONWIP release policy. Using MDPs and simulation, we identify effective scheduling control policies to extract operational flexibility. We provide evidence of significant improvement of production delays, ship completion times, and facility utilization toward the goal of helping the U.S. shipbuilding industry to achieve on-time production at budgeted cost.
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WE69
Business Applications II
Contributed Session
Chair: Valerie C.Y. Zhu, Associate Professor, Xian University of Science & Technology, 28, West of Xian Ning Road, Xian, Shaanxi, 710049, China, valeriezhu@mail.xjtu.edu.cn 1 - The Impact of Industrial Concentration on the Companys Debt Maturity-evidence Form China Leiming Fu, Xian Jiaotong University, School of Management, 28 Xianning West Road, X ian, 710049, China, xjtuflaming@hotmail.com, Difang Wan, Yahui Zhang
This paper analysis the impact of industrial concentration on debt maturity in China.We find that, industrial concentration and the firms debt maturity has a U-shaped relationship, i.e., when the industry is less concentrated, the shortterm debt ratio is negatively correlated with the industrial concentration, while they are positively correlated when the industry is highly concentrated, and the results are robust.
3 - Performance Evaluation of Disassembly Lines with Flexible Machines Performing Disassembly and Split Robert Riggs, PhD Student, University of Michigan, 1205 Beal Avenue, Ann Arbor, Mi, 48109, United States of America, robriggs@umich.edu, Francesca Simone, S. Jack Hu
End-of-life processing for products is becoming increasingly desirable in order to minimize amount of waste sent to landfills. For the configuration phase, in which a large number of system configurations have to be evaluated, a tool that analyzes remanufacturing systems composed by flexible machines is desirable. We present an approximate analytical method based on decomposition techniques for modeling and evaluating systems where disassembly and split operations occur at the same work station.
WE69
Green Innovation and Product Development

Chair: Vishal Agrawal, Assistant Professor, Georgetown University, 37th and O Streets, McDonough School of Business, Washington, DC, 20057, United States of America, va64@georgetown.edu 1 - Seven Cognitive Concepts for Successful Sustainable Design Erin MacDonald, Assistant Professor of Mechanical Engineering, Iowa State University, 2020 Black Engineering Building, Ames, IA, 50011, United States of America, erinmacd@iastate.edu
For the past forty years, researchers have studied how to encourage proenvironmental behaviors such as the adoption of recycling programs and purchase of sustainable products. This work synthesizes findings from psychology, consumer studies, economics, decision sciences, and public policy into cognitive concepts that are crucial to the successful purchase and use of sustainable products. Product examples and relevant design methods are discussed.
2 - Gaining Competitiveness through a Lean Enterprise Transformation: A Case Study for an Auto-parts Firm Gustavo Perez, PhD Student, Oklahoma State University, 4599 N. Washington, Stillwater, OK, 74075, United States of America, gustavo.perez@okstate.edu
This paper examines how a medium-sized German company, supplier to the automotive sector in Mexico, accomplished a Lean Enterprise Transformation. A case study approach was used to analyze the tools and practices of this particular lean initiative. Results indicate the lean transformation made a radical change in the firms performance indicators.
3 - Service-manufactruing is the Only Wayout! Valerie C.Y. Zhu, Associate Professor, Xian University of Science & Technology, 28, West of Xian Ning Road, Xian, Shaanxi, 710049, China, valeriezhu@mail.xjtu.edu.cn
Chinese manufacturing has met its Waterloo and calls for an urgent business transformation if it wants to survive and sustain its development. Based on lots of fundamental research, authors of this paper have proposed a new business conceptual model- SERVICE-MANUFACTURING, which focuses on the seamless marriage of service and manufacturing and how this new model can be implemented in real business practices.
2 - The NGOs Dilemma: How to Influence Firms to Replace a Potentially Hazardous Substance Feryal Erhun, Stanford University, MS&E, Stanford, CA, United States of America, feryal.erhun@stanford.ed u, Yanchong Karen Zheng, Tim Kraft
Recently, the uncertain environmental impact of consumer products and the chemicals they contain has been a popular topic in the news. When a potentially hazardous substance is identified, an NGO interested in removing this substance from commercial use must develop an efficient strategy for where to direct its often limited resources. We analyze this decision and determine under what conditions should an NGO target the industry vs. the regulatory body to influence firms to replace a substance.
WE68
Remanufacturing and End-of-Life Issues

Contributed Session
Chair: Robert Riggs, PhD Student, University of Michigan, 1205 Beal Avenue, Ann Arbor, Mi, 48109, United States of America, robriggs@umich.edu 1 - Inspection Schemes for Part Recovery under Demand Uncertainty Gonca Yildirim, University of Florida, Department of Industrial and Systems Engineering, 303 Weil Hall, P.O. Box 116595, Gainesville, FL, 32611, United States of America, gonca@ufl.edu, Elif Akcali
We examine different inspection schemes for a salvaging facility that collects a particular end-of-life product, performs a series of disassembly and recovery operations to reclaim a reusable part and sells the recovered part in the used parts market. We include environmental fees that create a non-negligible tradeoff against the operational costs in acquisition and stocking decisions under different inspection schemes.
3 - Using Economic Input-Output Life Cycle Assessment (EIO-LCA) to Guide Sustainable Design Jeremy Michalek, Associate Professor, Carnegie Mellon University, Scaife Hall 324, 5000 Forbes Avenue, Pittsburgh, PA, 15213, United States of America, jmichalek@cmu.edu, Chris Hendrickson, Jon Cagan
We explore the use of EIO-LCA as a tool to support sustainable design by quickly determining which aspects of the product and its supply chain dominate life cycle emissions. Compared to traditional processed-based LCA, EIO-LCA estimates are aggregate, using data on economic transactions and emissions from each sector of the economy. However, full supply chain emissions associated with output from each sector are computed instantly, helping determine where to focus sustainable design efforts.
2 - Inventory-promotion Policy in Hybrid Manufacturing System with Expediting S. Phil Kim, Purdue University, 315 N. Grant Street, West Lafayette, IN, 47907, United States of America, ksphil@purdue.edu, George Shanthikumar, Seokcheon Lee
The joint inventory-promotion decision problem in a closed-loop hybrid system is considered. The remanufactured product is as-good-as-new. The stochastic returns are assumed to be positively correlated with the volume of circulation. The demands are also stochastic and influenced by the promotion decision. For a given decision on the promotion, we show that the optimal solution structure is defined by two points in the state space.
4 - The Role of Product Modularity in Green Product Design Sezer Ulku, Georgetown University, McDonough School of Business, Washington DC, United States of America, su8@georgetown.edu, Vishal Agrawal
We investigate a firms strategic choice between modular and integral product architectures by endogenizing the development decisions and investigate their effect on the introduction and replacement of products. We identify when modularity leads to higher profits and lower environmental impact. We also analyze the effect of consumers environmental concerns and disposal fees on the firms choice between modular and integral architectures, and the resulting environmental impact.
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