M&som-Manufacturing & Service Operations Management最新文献

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Pricing for Heterogeneous Products: Analytics for Ticket Reselling 异构产品定价:票务转售分析
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-03-01 DOI: 10.1287/msom.2021.1065
Michael Alley, Max Biggs, Rim Hariss, Charles Herrmann, Michael Lingzhi Li, Georgia Perakis
{"title":"Pricing for Heterogeneous Products: Analytics for Ticket Reselling","authors":"Michael Alley, Max Biggs, Rim Hariss, Charles Herrmann, Michael Lingzhi Li, Georgia Perakis","doi":"10.1287/msom.2021.1065","DOIUrl":"https://doi.org/10.1287/msom.2021.1065","url":null,"abstract":"Problem definition: We present a data-driven study of the secondary ticket market. In particular, we are primarily concerned with accurately estimating price sensitivity for listed tickets. In this setting, there are many issues including endogeneity, heterogeneity in price sensitivity for different tickets, binary outcomes, and nonlinear interactions between ticket features. Our secondary goal is to highlight how this estimation can be integrated into a prescriptive trading strategy for buying and selling tickets in an active marketplace. Academic/practical relevance: We present a novel method for demand estimation with heterogeneous treatment effect in the presence of confounding. In practice, we embed this method within an optimization framework for ticket reselling, providing the ticket reselling platform with a new framework for pricing tickets on its platform. Methodology: We introduce a general double/orthogonalized machine learning method for classification problems. This method allows us to isolate the causal effects of price on the outcome by removing the conditional effects of the ticket and market features. Furthermore, we introduce a novel loss function that can be easily incorporated into powerful, off-the-shelf machine learning algorithms, including gradient boosted trees. We show how, in the presence of hidden confounding variables, instrumental variables can be incorporated. Results: Using a wide range of synthetic data sets, we show this approach beats state-of-the-art machine learning and causal inference approaches for estimating treatment effects in the classification setting. Furthermore, using National Basketball Association ticket listings from the 2014–2015 season, we show that probit models with instrumental variables, previously used for price estimation of tickets in the resale market, are significantly less accurate and potentially misspecified relative to our proposed approach. Through pricing simulations, we show our proposed method can achieve an 11% return on investment by buying and selling tickets, whereas existing techniques are not profitable. Managerial implications: The knowledge of how to price tickets on its platform offers a range of potential opportunities for our collaborator, both in terms of understanding sellers on their platform and in developing new products to offer them. History: This paper has been accepted as part of the 2019 Manufacturing & Service Operations Management Practice-Based Research Competition. Funding: This work was supported by the National Science Foundation [Grant CMMI-1563343]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2021.1065 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135643248","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 3
The Design of Optimal Pay-as-Bid Procurement Mechanisms 最优按投标付费采购机制设计
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-03-01 DOI: 10.1287/msom.2022.1180
Je-ok Choi, Daniela Saban, Gabriel Weintraub
{"title":"The Design of Optimal Pay-as-Bid Procurement Mechanisms","authors":"Je-ok Choi, Daniela Saban, Gabriel Weintraub","doi":"10.1287/msom.2022.1180","DOIUrl":"https://doi.org/10.1287/msom.2022.1180","url":null,"abstract":"Problem definition: We consider the mechanism design problem of finding an optimal pay-as-bid mechanism in which a platform chooses an assortment of suppliers to balance the tradeoff between two objectives: providing enough variety to accommodate heterogeneous buyers, yet at low prices. Academic/practical relevance: Modern buying channels, including e-commerce and public procurement, often consist of a platform that mediates transactions. Frequently, these platforms implement simple and transparent mechanisms to induce suppliers’ direct participation, which typically results in pay-as-bid (or first-price) mechanisms where suppliers set their prices. Methodology: We introduce a novel class of assortment mechanisms that we call k-soft reserves (k-SRs): If at least k suppliers choose a price below the soft-reserve price, then only those suppliers are added to the assortment; otherwise, all the suppliers are added. Results: We show the optimality of k-SRs for a class of stylized symmetric models to derive the intuition behind these mechanisms. Then, through extensive numerical simulations, we provide evidence of the robustness of k-SRs in more general and realistic settings. Managerial implications: Our results give intuitive and simple-to-use prescriptions on how to optimize pay-as-bid assortment mechanisms in practice, with an emphasis on public procurement settings. Funding: J. Choi thanks the Samsung Scholarship and Stanford Graduate School of Business for financial support. G. Weintraub thanks Joseph and Laurie Lacob for the support during the 2018–2019 academic year as a Joseph and Laurie Lacob Faculty Scholar at Stanford Graduate School of Business. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1180 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136173687","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 0
Quality Signaling Through Crowdfunding Pricing 通过众筹定价实现质量信号
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-03-01 DOI: 10.1287/msom.2022.1177
Ehsan Bolandifar, Zhong Chen, Panos Kouvelis, Weihua Zhou
{"title":"Quality Signaling Through Crowdfunding Pricing","authors":"Ehsan Bolandifar, Zhong Chen, Panos Kouvelis, Weihua Zhou","doi":"10.1287/msom.2022.1177","DOIUrl":"https://doi.org/10.1287/msom.2022.1177","url":null,"abstract":"Problem definition: This paper studies an entrepreneur’s pricing strategy in a reward-based crowdfunding campaign under asymmetric product quality information. We propose two signaling mechanisms and investigate how entrepreneurs can leverage their pricing strategy to signal a high-quality project. Academic/practical relevance: This problem is relevant to practice, as asymmetric quality information is a significant concern in reward-based crowdfunding. High-quality entrepreneurs seek credible mechanisms to signal the quality of projects to customers. Methodology: We develop a stylized game-theoretic signaling model with funding and regular selling periods that captures asymmetric quality information between an entrepreneur and customers. Results: We propose a new theory on quality signaling in crowdfunding. We show that contingent access to the regular selling market after running a successful crowdfunding campaign allows high-quality entrepreneurs to signal their quality through low funding prices (one-price signaling). A high-quality entrepreneur can increase his funding price and still signal his high-quality level if he commits to the future regular selling price (two-price signaling). We show that the distinct feature of crowdfunding, that is, the probabilistic nature of crowdfunding, plays different roles in one- and two-price signaling. It is the driving force for the separating equilibrium in one-price signaling, and in two-price signaling, it affects how the entrepreneur should manipulate his funding and regular selling prices to reduce signaling cost. Managerial implications: Entrepreneurs should be mindful of pricing in funding and regular selling periods because it could play an essential role in signaling quality information. Our findings suggest practical tools for quality signaling in crowdfunding. We also investigate when price commitment is the most beneficial for a high-quality entrepreneur, looking for potential signaling mechanisms. Funding: W. Zhou acknowledges financial support from the National Natural Science Foundation of China [Grant 72192823 and Grant 71821002]. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1177 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135796884","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 2
Price Discrimination and Inventory Allocation in Bertrand Competition 伯特兰竞争中的价格歧视与库存配置
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2022.1146
Maxime C. Cohen, Alexandre Jacquillat, Haotian Song
{"title":"Price Discrimination and Inventory Allocation in Bertrand Competition","authors":"Maxime C. Cohen, Alexandre Jacquillat, Haotian Song","doi":"10.1287/msom.2022.1146","DOIUrl":"https://doi.org/10.1287/msom.2022.1146","url":null,"abstract":"Problem definition: It is common practice for firms to deploy strategies based on customer segmentation (by clustering customers into different segments) and price discrimination (by offering different prices to different customer segments). Price discrimination, although seemingly beneficial, can hurt firms in competitive environments. Academic/practical relevance: It is thus critical for firms to understand when to engage in price discrimination and how to support discriminatory pricing practices with appropriate inventory management strategies. This paper tackles this overarching question through operational lenses by studying the joint impact of price discrimination and the allocation of limited inventory across customer segments. Methodology: We develop a Bertrand competition game featuring capacity restrictions, quality differentiation, and customer heterogeneity. Results: We characterize (pure- or mixed-strategy) Nash equilibria for a single-stage game reflecting uniform pricing and for a two-stage inventory-price game reflecting discriminatory pricing along with endogenous inventory allocation. Managerial implications: We identify three sources of market friction in price competition enabling firms to earn higher profits: capacity limitations, quality differentiation, and customer heterogeneity. Price discrimination eliminates the market frictions from customer heterogeneity, but strategic inventory allocation restores (or strengthens) the market frictions from capacity limitations. As such, price discrimination is only beneficial when combined with optimal inventory allocation across segments. We discuss relevant real-world examples featuring regional price discrimination along with strategic inventory allocation, including fast fashion and vaccines. Otherwise, uniform pricing may outperform discriminatory pricing. Our results thus underscore the critical role of inventory allocation in the design of competitive pricing strategies. Funding: This research was partially supported by the National Natural Science Foundation of China [Grant 71821002]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.1146 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135235754","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 1
Revenue Management in Crowdfunding 众筹中的收益管理
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2022.1147
Jiding Zhang, Sergei Savin, Senthil Veeraraghavan
{"title":"Revenue Management in Crowdfunding","authors":"Jiding Zhang, Sergei Savin, Senthil Veeraraghavan","doi":"10.1287/msom.2022.1147","DOIUrl":"https://doi.org/10.1287/msom.2022.1147","url":null,"abstract":"Problem definition: We study the optimal design of crowdfunding campaigns and develop a model that maximizes revenue for a given crowdfunding campaign by optimizing both the pledge level sought from donors and the duration of the campaign. Academic/practical relevance: Our model explains the patterns of backer/donor arrival and pledging observed on crowdfunding platforms, such as Kickstarter. This model can be used to calibrate the revenue impact from using prespecified pledge levels or campaign durations. Methodology: We develop a theoretical model of the dynamics of the pledging process within the campaign duration, which employs a continuous-time, finite-horizon framework with two types of backer populations. Our model follows a diffusion-based approach and incorporates the structure of empirical observations. Results: We show that when campaign creators must follow an external standard for either the pledge level or the campaign duration, they should match low pledge levels with long campaign durations and high pledge levels with short campaign durations. We show that the optimal duration of a campaign, when not fixed by external constraints, depends on the composition of the backer population. Shorter campaigns are attuned to independent backers, and longer campaigns cater to herding backers. Managerial implications: Our analysis provides creators of crowdfunding campaigns with straightforward prescriptions for how to set the optimal pledge level and campaign duration. Platform managers could use the analysis to calibrate the arrival process of backers and creators’ campaign parameters. Funding: This work was supported by the Fishman-Davidson Center. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.1147 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"168 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136229586","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 3
Queueing Systems with Rationally Inattentive Customers 理性不专心的顾客排队系统
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2021.1032
Caner Canyakmaz, Tamer Boyacı
{"title":"Queueing Systems with Rationally Inattentive Customers","authors":"Caner Canyakmaz, Tamer Boyacı","doi":"10.1287/msom.2021.1032","DOIUrl":"https://doi.org/10.1287/msom.2021.1032","url":null,"abstract":"Problem definition: Classical models of queueing systems with rational and strategic customers assume queues to be either fully visible or invisible, while service parameters are known with certainty. In practice, however, people only have “partial information” on the service environment, in the sense that they are not able to fully discern prevalent uncertainties. This is because assessing possible delays and rewards is costly, as it requires time, attention, and cognitive capacity, which are all limited. On the other hand, people are also adaptive and endogenously respond to information frictions. Methodology: We develop an equilibrium model for a single-server queueing system with customers having limited attention. Following the theory of rational inattention, we assume that customers optimize their learning strategies by deciding the type and amount of information to acquire and act accordingly while internalizing the associated costs. Results: We establish the existence and uniqueness of a customer equilibrium when customers allocate their attention to learn uncertain queue lengths and delineate the impact of service characteristics. We provide a complete spectrum of the impact of information costs on throughput and show numerically that throughput might be nonmonotone. This is also reflected in social welfare if the firm’s profit margin is high enough, although customer welfare always suffers from information costs. Managerial implications: We identify service settings where service firms and social planners should be most cautious for customers’ limited attention and translate our results to advisable strategies for information provision and service design. For example, we recommend firms to avoid partial hindrance of queue-length information when a low-demand service is not highly valued by customers. For a popular service that customers value reasonably highly, however, partial hindrance of information is particularly advisable. Academic/practical relevance: We propose a microfounded framework for strategic customer behavior in queues that links beliefs, rewards, and information costs. It offers a holistic perspective on the impact of information prevalence (and information frictions) on operational performance and can be extended to analyze richer customer behavior and complex queue structures, rendering it a valuable tool for service design. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2021.1032 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136297321","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 2
Evaluating Count Prioritization Procedures for Improving Inventory Accuracy in Retail Stores 评估提高零售商店库存准确性的计数优先排序程序
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2022.1119
Nicole DeHoratius, Andreas Holzapfel, Heinrich Kuhn, Adam J. Mersereau, Michael Sternbeck
{"title":"Evaluating Count Prioritization Procedures for Improving Inventory Accuracy in Retail Stores","authors":"Nicole DeHoratius, Andreas Holzapfel, Heinrich Kuhn, Adam J. Mersereau, Michael Sternbeck","doi":"10.1287/msom.2022.1119","DOIUrl":"https://doi.org/10.1287/msom.2022.1119","url":null,"abstract":"Problem definition: We compare several approaches for generating a prioritized list of items to be counted in a retail store, with the objective of detecting inventory record inaccuracy and unknown out of stocks. Academic/practical relevance: We consider both “rule-based” approaches, which sort items based on heuristic indices, and “model-based” approaches, which maintain probability distributions for the true inventory levels updated based on sales and replenishment observations. Methodology: Our study evaluates these approaches on multiple metrics using data from inventory audits we conducted at European home and personal care retailer dm-drogerie markt. Results: Our results support arguments for both rule-based and model-based approaches. We find that model-based approaches provide versatile visibility into inventory states and are useful for a broad range of objectives but that rule-based approaches are also effective as long as they are matched to the retailer’s goal. We find that “high-activity” rule-based policies, which favor items with high sales volumes, inventory levels, and past errors, are more effective at detecting inventory discrepancies. The best policies uncover over twice the discrepancies detected by random selection. A “low-activity” rule-based policy based on low recorded inventory levels, on the other hand, is more effective at detecting unknown out of stocks. The best policy detects over eight times the unknown out of stocks found by random selection. Managerial implications: Our findings provide immediate guidance to our retail partner on appropriate methods for detecting inventory record inaccuracy and unknown out of stocks. Our approach can be replicated at other retailers interested in customized optimization of their counting programs. Funding: This work was supported by the Bavarian Ministry for Science and Arts [Grant BayIntAn_KUEI_2018_43] and the EHI Foundation and GS1 Germany [Prize for Best Collaboration Between Science and Practice in Retail Research (2019)]. A. J. Mersereau thanks the Sarah Graham Kenan Foundation for support. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.1119 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"5 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136296846","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 2
The Impact of Committing to Customer Orders in Online Retail 在线零售中客户订单承诺的影响
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2022.1124
Gonçalo Figueira, Willem van Jaarsveld, Pedro Amorim, Jan C. Fransoo
{"title":"The Impact of Committing to Customer Orders in Online Retail","authors":"Gonçalo Figueira, Willem van Jaarsveld, Pedro Amorim, Jan C. Fransoo","doi":"10.1287/msom.2022.1124","DOIUrl":"https://doi.org/10.1287/msom.2022.1124","url":null,"abstract":"Problem definition: Online retailers are on a consistent drive to increase on-time delivery and reduce customer lead time. However, in reality, an increasing share of consumers places orders early. Academic/practical relevance: Such advance demand information can be deployed strategically to reduce costs and improve the customer service experience. This requires inventory and allocation policies that make optimal use of this information and that induce consumers to place their orders early. An increasing number of online retailers not only offer customers a choice of lead time but also, actively back-order missing items from a consumer basket. Methodology: We develop new allocation policies that commit to a customer order upon arrival of the order rather than at the moment the order is due. We provide analytical results for the performance of these allocation policies and evaluate their behavior with real data from a large food retailer. Results: Our policy leads to a higher fill rate at the expense of a slight increase in average delay. The analysis based on real-life data suggests a sizeable impact that should impact current best practices in online retail. Managerial implications: With the changing landscape in online retail, customers increasingly place baskets of orders that they would like to receive at a planned and confirmed moment in time. Especially in grocery, this has grown fast. This fundamentally changes the strategic management of inventory. We demonstrate that online retailers should commit early to customer orders to enhance the customer service experience and eventually, to also create opportunities for reducing the cost of operations. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.1124 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"175 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136298870","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 2
Increasing Biomanufacturing Yield with Bleed–Feed: Optimal Policies and Insights 用放血饲料提高生物制造产量:最佳政策和见解
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2022.1163
Yesim Koca, Tugce Martagan, Ivo Adan, Lisa Maillart, Bram van Ravenstein
{"title":"Increasing Biomanufacturing Yield with Bleed–Feed: Optimal Policies and Insights","authors":"Yesim Koca, Tugce Martagan, Ivo Adan, Lisa Maillart, Bram van Ravenstein","doi":"10.1287/msom.2022.1163","DOIUrl":"https://doi.org/10.1287/msom.2022.1163","url":null,"abstract":"Problem definition: Bleed–feed is a novel technology that allows biomanufacturers to skip intermediary bioreactor setups. However, the specific time at which bleed–feed is performed is critical for success. The process is stringently regulated, and its implementation involves unique tradeoffs in operational decision making. Our analysis formalizes the operational challenges related to bleed–feed decisions, and our results inform biomanufacturers and policymakers on the potential impact of this technology on current practice. Academic/practical relevance: Operations management (OM) methodologies have not yet been widely adopted in the biomanufacturing industry. This research presents one of the first attempts to demonstrate how OM can complement biomanufacturing to improve operational decisions. We present a practically relevant problem and a rigorous solution approach that is relevant to both OM and biomanufacturing. Methodology: We develop a finite-horizon, discrete-time Markov decision processes model and analyze the structural characteristics of optimal bleed–feed policies. Moreover, we characterize the behavior of the value function as a function of regulatory restrictions. As a salient feature, the MDP model captures both the biological dynamics of fermentation and the operational tradeoffs in biomanufacturing. Results: We show that optimal bleed–feed policies have a three-way control-limit structure under mild conditions that were validated with industry data. Moreover, our analysis reveals that the marginal benefits of bleed–feed diminish as additional bleed–feeds are performed. As a practically relevant benchmark, we consider a risk-averse heuristic and identify sufficient conditions for its optimality. Managerial implications: Our analysis (supported with an industry case study) shows that bleed–feed implementation can provide benefits. Real-world implementation at MSD resulted in an 82.5% improvement in the batch yield per setup (using one bleed–feed). We find that low-risk fermentation systems benefit the most from bleed–feed implementation. We also find that the performance gap between optimal policies and the risk-averse heuristic is higher when the failure risks or the critical biomass levels are lower. Funding: This work was supported by the Nederlandse Organisatie voor Wetenschappelijk Onderzoek, NWO-VENI scheme. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1163 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"167 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134955161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 1
Business Method Innovation in U.S. Manufacturing and Trade 美国制造业和贸易的商业方法创新
3区 管理学
M&som-Manufacturing & Service Operations Management Pub Date : 2023-01-01 DOI: 10.1287/msom.2022.1129
Tian Heong Chan, Anandhi Bharadwaj, Deepa Varadarajan
{"title":"Business Method Innovation in U.S. Manufacturing and Trade","authors":"Tian Heong Chan, Anandhi Bharadwaj, Deepa Varadarajan","doi":"10.1287/msom.2022.1129","DOIUrl":"https://doi.org/10.1287/msom.2022.1129","url":null,"abstract":"Problem definition: In what kinds of business method innovation do firms in the manufacturing and trade sectors engage? Does engaging in business method innovation create value for these firms? The present paper answers these questions using empirical evidence. Methodology/results: Using text analysis of business method patents, we show that business method innovation in the U.S. manufacturing and trade sectors is aimed primarily at improving the business operations that support the sales of tangible products—that is, how the firm targets customers, manages product delivery, or enhances the product through service offerings. We then evaluate the effect of having business method innovation, as evidenced by patents, on a firm’s value. Leveraging the exogenous shock of the State Street ruling, which first recognized business methods as a patentable category of innovation, we identify a set of firms that possess business method patents and a matched set of comparable firms without such patents. Then, using a difference-in-differences with firm fixed effects model on the matched sample, we show that the valuation of the former set of firms increased by 9% after State Street, as measured by Tobin’s q. We further show that (1) business method innovators in the manufacturing sector gained a 7% increase, whereas business method innovators in the trade sectors gained a 25% increase; and (2) only firms with broader innovation scope—that is, business method innovations covering the range of customer targeting, product delivery, and service support of products—experienced a significant (18%) value bump. Managerial implications: This research provides evidence that business method innovation in the manufacturing and trade sectors primarily involves innovating in business operations that support product sales. Our work also provides empirical support for the proposition that engaging in business method innovation drives manufacturing and trade firms’ market performance. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2022.1129 .","PeriodicalId":49901,"journal":{"name":"M&som-Manufacturing & Service Operations Management","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135235910","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
引用次数: 1
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