Hossein Jahandideh, Kevin McCardle, Christopher Tang, Behnam Fahimnia
{"title":"Capacity allocation for producing age-based products","authors":"Hossein Jahandideh, Kevin McCardle, Christopher Tang, Behnam Fahimnia","doi":"10.1111/deci.12599","DOIUrl":"https://doi.org/10.1111/deci.12599","url":null,"abstract":"<div>\u0000 \u0000 <p>We consider a firm's production and sales decisions for an age-based product whose value increases with ageing (e.g., whisky, wine, and cheese). The firm has been selling a <i>younger-aged</i> product but is considering introducing a <i>new</i> product by setting some of its production aside to age longer (in the “maturation” process). With a fixed production capacity dictated by the “distilling” process that takes place before the maturation process, the firm needs to decide if and when to sell different aged products as <i>partial substitutes</i>. Specifically, the firm must decide, period by period, how much, if any, of its younger-aged product to set aside for additional ageing. Because the younger product has been selling for some time, the firm knows its market size. For the new product, we consider two scenarios in which the market size is either: (1) known (deterministic) or (2) not yet fully known (stochastic). For the deterministic market size scenario, we provide an analytic solution to the infinite horizon problem and show that the optimal fraction of production reserved for additional ageing increases and converges to a steady-state solution with a closed-form expression. Though our model is dynamic, we show that a static policy, which is easy to compute and is intuitively appealing, performs quite well. For the stochastic market size scenario, we show that a “certainty equivalence” policy is optimal under reasonable conditions, and near-optimal when these conditions do not hold. Hence the stochastic problem is effectively equivalent to the deterministic market size case. We also examine the case when the production process is subject to a deterministic yield loss and obtain similar structural results.</p></div>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"54 5","pages":"473-493"},"PeriodicalIF":5.5,"publicationDate":"2023-06-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"50119554","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Gülru F. Özkan-Seely, David C. Hall, Jeremy Hutchison-Krupat
{"title":"Search for the best alternative: An experimental approach","authors":"Gülru F. Özkan-Seely, David C. Hall, Jeremy Hutchison-Krupat","doi":"10.1111/deci.12598","DOIUrl":"10.1111/deci.12598","url":null,"abstract":"<div>\u0000 \u0000 <p>Effectively implementing any dimension of a company's strategy requires a careful balance between ensuring a sufficient number of opportunities have been explored and the execution has taken place in a timely manner for a specific initiative. Naturally, the importance of specific characteristics of an initiative will vary according to the strategic objective. Alternatives vary in their likelihood of success, how sensitive their value is to time, and the resources required to explore additional options. Extant research has established optimal rules for what constitutes a sufficient degree of exploration, and how to go about exploring alternatives. Yet, how individuals vary their behavior according to the characteristics of an initiative is not well understood. We use a controlled experiment to study how individuals' decisions are impacted by these characteristics. As expected, individuals perform significantly worse than optimal behavior would predict. However, the underlying drivers of this performance deviation critically depend on the characteristics of the initiative. Individuals who face simple initiatives that lack sensitivity to time tend to evaluate far too many options. In contrast, when a simple initiative's value is sensitive to time, individuals tend to evaluate far too few options. When the individuals face more difficult initiatives, they do not exhibit such extreme tendencies in terms of how many alternatives they evaluate. Rather, for the most challenging initiatives, individuals exhibit near optimal behavior in terms of how many alternatives they evaluate. Our findings help to provide insight to managers on where they should focus their attention in terms of pushing for more or less exploration.</p></div>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 1","pages":"57-67"},"PeriodicalIF":5.5,"publicationDate":"2023-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45854616","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Wei Sun, Bin Yang, Maggie Chuoyan Dong, Jack Cadeaux
{"title":"Resilient product and production adaptation in a large-scale disaster: Does it pay off?","authors":"Wei Sun, Bin Yang, Maggie Chuoyan Dong, Jack Cadeaux","doi":"10.1111/deci.12597","DOIUrl":"10.1111/deci.12597","url":null,"abstract":"<p>Pandemic outbreaks can disrupt firms’ normal operations, so they demand a resilient response. Firms can combine social responsibility initiatives with resilient responses by reconfiguring their production resources for pandemic relief. It remains unclear, however, whether pandemic-relieving product adaptation (in short, PRPA) improves financial performance. We draw on stakeholder theory to analyze the effect of a PRPA strategy on the stock returns of US-listed manufacturing firms during the COVID-19 pandemic—the most enduring and large-scale pandemic in recent history. The results reveal that the stock market reacts more positively to PRPA under severe pandemic circumstances and for firms with low political connectedness, low media coverage, and/or more unique production technology. The findings offer important implications for operations theory and practice.</p>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 2","pages":"191-208"},"PeriodicalIF":5.5,"publicationDate":"2023-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42406073","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"The waste management supply chain: A decision framework","authors":"Prashant Chintapalli, Asoo J. Vakharia","doi":"10.1111/deci.12595","DOIUrl":"10.1111/deci.12595","url":null,"abstract":"<div>\u0000 \u0000 <p>The alarmingly increasing trends in worldwide waste generation call for a holistic analysis of waste management supply chains. Using a comprehensive end-to-end (i.e., waste generation to waste disposal) decision framework, this article analyzes key decisions of a waste management firm (WMF) focused on the proportions of dry (and wet) waste to recycle (and compost). This framework is applied to assess the impact of: (i) the preprocessing of generated waste at source (i.e., the “upstream factors”) and (ii) the market prices of recycled dry and composted wet wastes (i.e., the “downstream factors”) on WMF's decisions. One key insight is that the WMF will choose to process more waste when the market prices for processed wastes are high, and/or when more waste is preprocessed at source. Improvements in presorting can be more economical and offer a long-term sustainable solution to efficient waste management. From a policy perspective, we observe that taxing a WMF for waste disposal could dissuade the WMF from participating in waste processing especially when its marginal processing costs are high. The decision framework and the corresponding model are calibrated to different world regions using secondary data on these regions, classified by their income levels. It is observed from our data analysis that uniform “one-size-fits-all” policies are dominated by region-specific tailored policies for efficient waste management. Hence, prescriptions should be carefully formulated based on the type of waste generated and the processing/disposal options available in a region. For example, composting more wet waste at source is a better choice in low-, low-middle-, and middle-high-income regions, whereas this is not the case in high-income regions. The proposed decision framework also provides an explanation of the negative impact on recycling initiatives at a local level stemming from decreasing recycled material prices. Given that this is the first study to characterize and analyze the waste management supply chain, the article also highlights some areas for future research.</p></div>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 5","pages":"421-435"},"PeriodicalIF":2.8,"publicationDate":"2023-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136091202","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Wenjuan Fan, Yuanyuan Jiang, Jun Pei, Ping Yan, Liangfei Qiu
{"title":"The impact of medical insurance payment systems on patient choice, provider behavior, and out-of-pocket rate: Fee-for-service versus diagnosis-related groups","authors":"Wenjuan Fan, Yuanyuan Jiang, Jun Pei, Ping Yan, Liangfei Qiu","doi":"10.1111/deci.12593","DOIUrl":"10.1111/deci.12593","url":null,"abstract":"<p>The medical insurance payment system (MIPS) is a key mechanism to ensure the public's access to medical services. In a game-theoretic model, we examine the impact of two MIPSs, fee-for-service (FFS) and diagnosis-related groups (DRG), on patient choices, provider behavior, and out-of-pocket rate. We find that neither FFS nor DRG can dominate the other in all three aspects: social welfare, provider profit, and total patient surplus. In particular, under DRG, the out-of-pocket rate for patients is lower, and the total patient surplus is higher than that under FFS. However, patients with lower illness severity tend to not participate in DRG, while FFS can make all patients participate in the program. Furthermore, when the marginal cost of medical services is high, the profit of the provider and social welfare under DRG is higher than those under FFS, otherwise lower. After interviewing hospital leaders, we further investigate two extended (pilot) payment systems: DRG with two price groups, and the hybrid model incorporating both FFS and DRG. We find that both models contribute to improving provider behavior, making more patients choose the provider, but are still not perfect payment systems due to lower provider profit or social welfare. Our findings offer important insights for policymakers regarding implementing medical insurance reform in practice.</p>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 3","pages":"245-261"},"PeriodicalIF":2.8,"publicationDate":"2023-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45464906","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Concealing borrowers’ failure history in online P2P lending: A natural experiment","authors":"Jiaru Bai, Qiang Gao","doi":"10.1111/deci.12594","DOIUrl":"10.1111/deci.12594","url":null,"abstract":"<p>Online peer-to-peer (P2P) platforms both disclose and conceal borrowers’ information. Minimal research has been conducted on the impact of concealing such information on borrowers’ funding success. We fill this research gap by exploring a natural experiment opportunity at Prosper, an online lending marketplace where the platform enacted a policy to conceal borrowers’ past failure history. We first find that the platform's decision to conceal such information can be rational because when this information was publicly available, borrowers with past failures had lower success rates than borrowers without past failures. We next investigate the effect of hiding this information on lenders' lending decisions. Our empirical results from a series of analyses demonstrate that concealing such information helps some borrowers but also surprisingly leads to an overall lower success rate, which ultimately harms the platform and runs counter to the platform's intention. These effects are strongest for low-risk borrowers and would attenuate in the long run. We further find that the number of borrowers’ past failures is associated with lower repayment ability.</p>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 4","pages":"398-413"},"PeriodicalIF":2.8,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46945473","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Seung Kyoon Shin, Kyungwoo Kang, G. Lawrence Sanders
{"title":"The effects of perceived network characteristics on knowledge exchange in virtual communities","authors":"Seung Kyoon Shin, Kyungwoo Kang, G. Lawrence Sanders","doi":"10.1111/deci.12591","DOIUrl":"10.1111/deci.12591","url":null,"abstract":"<p>Understanding virtual community (VC) networks is essential because the characteristics of these networks play a fundamental role in knowledge exchange. This survey-based study proposes two network-related antecedents: perceived closeness with VC members (PCL) and perceived connectedness with VC members (PCN). Using a structural equation modeling approach, we examined the two antecedents' associations with the knowledge-exchange drivers that, in turn, are related to two endogenous variables: intention to acquire knowledge and intention to share knowledge. The results of our bootstrapping mediation tests suggest that the perceived network characteristics indirectly influence members' knowledge-exchange intentions through mediators such as identification, knowledge self-efficacy, reputation, and shared vision. We conclude that PCN can positively influence the four mediators and is a key network characteristic that facilitates knowledge exchange in virtual spaces. By studying the antecedents of users' intentions to share and acquire knowledge, this research provides a holistic view of information exchange on VCs.</p>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"54 6","pages":"615-631"},"PeriodicalIF":5.5,"publicationDate":"2023-02-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48312318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Zhenzhen Yan, Mei Li, John Z. Ni, Kathleen L. McFadden
{"title":"Examining network entry decisions in healthcare: Network and organizational characteristics","authors":"Zhenzhen Yan, Mei Li, John Z. Ni, Kathleen L. McFadden","doi":"10.1111/deci.12590","DOIUrl":"10.1111/deci.12590","url":null,"abstract":"<p>Accountable Care Organizations (ACOs) are healthcare collaboration networks comprised of hospitals and other healthcare providers. The motivation behind the formation of ACOs is to improve the quality of care while reducing healthcare costs. Despite these commendable goals, hospitals’ participation in ACOs remains low; the most significant barrier being the risk associated with joining. Our research tackles this timely and potentially impactful topic by exploring factors that facilitate hospitals' ACO entry decisions. We apply resource dependence theory to explain that competition network characteristics, organizational network characteristics, and internal organizational characteristics mitigate hospitals’ financial risk and are therefore critical to ACO participation. Using survival analysis, we test our research hypotheses using longitudinal data from 3114 hospitals. Our findings suggest that hospitals with a high level of competition network centrality are more likely to join an ACO, while hospitals with a high level of competition network tie diversity are less likely to join. In addition, hospitals with experience in joining other healthcare networks, such as Regional Healthcare Information Organizations, or belonging to a large parent group, are inclined to enter an ACO. Lastly, hospitals with a high level of unabsorbed slack are prone to ACO participation. Given that knowledge of hospitals’ participation in ACOs is lacking, this research is relevant for practitioners in the US healthcare industry. Specifically, it provides insights for hospital administrators on the critical resources that need to be strengthened before joining an ACO. Our findings also provide practical guidance for healthcare policy makers on how to profile, target, and efficiently promote ACO participation among hospitals.</p>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 1","pages":"68-87"},"PeriodicalIF":5.5,"publicationDate":"2023-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43620078","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Na Rea Cho, Youngsoo Kim, Karthik Murali, Mesut Yavuz
{"title":"Drivers and implications of combined investment in renewables and energy storage in the residential sector","authors":"Na Rea Cho, Youngsoo Kim, Karthik Murali, Mesut Yavuz","doi":"10.1111/deci.12589","DOIUrl":"10.1111/deci.12589","url":null,"abstract":"<p>Residential consumers are increasingly combining renewables with energy storage systems. However, changes in policies and support for these technologies may impact their adoption and the outlook for the energy industry. In this paper, we consider a grid-connected household's problem of determining the optimal capacities of these two technologies as well as the battery operating policy that minimizes its electricity costs when faced with time-of-use electricity prices and sellback credits. We identify the impact of household characteristics, technological progress, and electricity pricing policies on the levels of investment in these two technologies. Furthermore, we supplement our analytical results with a case study of two U.S. cities and identify policy guidelines for the design of a technology subsidy program aimed at stimulating the adoption of these technologies and the ensuing implications for residential customers, the environment, and grid reliability. Our paper has implications for several stakeholders in practice on (i) how the adoption of renewables is affected by energy storage (and vice versa) and (ii) how electricity pricing, technological progress, and subsidy policies can shape the adoption of both technologies.</p>","PeriodicalId":48256,"journal":{"name":"DECISION SCIENCES","volume":"55 4","pages":"381-397"},"PeriodicalIF":2.8,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49565166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}