Technology and Operations Management

Fontainebleau, France

Technology and Operations Management

Fontainebleau, France
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Belavina E.,University of Chicago | Girotra K.,Technology and Operations Management | Kabra A.,Technology and Operations Management
Management Science | Year: 2017

This paper compares the financial and environmental performance of two revenue models for the online retailing of groceries: the per-order model, where customers pay for each delivery, and the subscription model, where customers pay a set fee and receive free deliveries. We build a stylized model that incorporates (i) customers with ongoing uncertain grocery needs and who choose between shopping offline or online and (ii) an online retailer that makes deliveries through a proprietary distribution network. We find that subscription incentivizes smaller and more frequent grocery orders, which reduces food waste and creates more value for the customer; the result is higher retailer revenues, lower grocery costs, and potentially higher adoption rates. These advantages are countered by greater delivery-related travel and expenses, which are moderated by area geography and routing-related scale economies. Subscription also leads to lower food waste-related emissions but to higher delivery-related emissions. Ceteris paribus, the perorder model is preferable for higher-margin retailers with higher-consumption product assortments that are sold in sparsely populated markets spread over large, irregular areas with high delivery costs. Geographic and demographic data indicate that the subscription model is almost always environmentally preferable because lower food waste emissions dominate higher delivery emissions. © 2016 INFORMS.

Van Wassenhove L.N.,Technology and Operations Management | Zikopoulos C.,Aristotle University of Thessaloniki
International Journal of Production Research | Year: 2010

We study a simple reverse supply chain consisting of a remanufacturing facility and a number of independent locations where used products are returned by the end-users. At the collection locations, the returned products are graded and classified based on a list of nominal quality metrics provided by the remanufacturer. It is assumed that this classification is subject to errors; specifically, the returns condition is overestimated because of a stochastic proportion of returned units which are classified in classes corresponding to better quality than the actual. The scope of the paper is to study how these classification errors affect the optimal procurement decisions of the remanufacturer as well as the associated profit for the cases of both constant and stochastic demand in a single-period context. Moreover, in the former case we study the impact of these classification errors on profit variability. The quantification of the impact of quality overestimation provides intuition on the value of reliable classification and on the extent of the necessary investments and initiatives to improve classification accuracy. © 2010 Taylor & Francis.

Pedraza Martinez A.J.,Technology and Operations Management | Stapleton O.,Social Innovation Center | Van Wassenhove L.N.,Technology and Operations Management
Journal of Operations Management | Year: 2011

Transportation is the second largest overhead cost to humanitarian organizations after personnel. Academic knowledge about fleet management in humanitarian operations is scarce. Using a multiple case research design we study Field Vehicle Fleet Management (Field VFM) in four large International Humanitarian Organizations (IHO): the International Committee of the Red Cross, the International Federation of Red Cross and Red Crescent Societies, the World Food Program and World Vision International. Our field research includes more than 40 interviews at headquarters, regional and national level in Africa, the Middle East and Europe. The paper answers three research questions: (1) How do IHO manage their field vehicle fleets? (2) What are the critical factors affecting IHO Field VFM? (3) How does Field VFM affect in-country program delivery? The contribution of this research is twofold. First, it helps to fill the existing gap in the humanitarian literature regarding Field VFM. Second, it expands the fleet management literature to a new and virtually unexplored area. © 2010 Elsevier B.V. All rights reserved.

Eftekhar M.,Arizona State University | Van Wassenhove L.N.,Technology and Operations Management
Journal of Operations Management | Year: 2016

Four-wheel drive vehicles play a pivotal role in securing the last-mile distribution of goods and services in humanitarian development programs. To optimize the use of their fleets, humanitarian organizations recommend policies aimed at enhancing the utilization of vehicles while preserving residual value. Although these decisions have a significant impact on cost, there is limited empirical evidence to show that the recommended policies are actually implemented and that they produce the expected benefits. This paper theoretically and empirically examines the complex and inter-related effects of vehicle-to-mission allocation decisions and of alternative vehicle usage patterns on vehicle utilization and residual value in humanitarian development programs. The results suggest that humanitarian organizations could break the utilization-residual value trade-off by adopting different policies than the ones currently in place. They also reveal that organizations need to realize that what seems logical from the headquarters' perspective may be illogical or inconvenient for the field, and as a result, the field may do the opposite of what is recommended or even instructed. Therefore, they either need better data and analysis combined with audits or they need to improve mechanisms that incentivize field delegations to follow standards recommended by the headquarters. © 2016 Elsevier B.V. All rights reserved.

Jain N.,Technology and Operations Management | Hasija S.,Technology and Operations Management | Popescu D.G.,Technology and Operations Management
Operations Research | Year: 2013

Outsourcing of equipment repair and restoration is commonly practiced by firms in many industries. The operational performance of equipment is determined by joint decisions of the firm (client) and the service provider (vendor). Although some decisions are verifiable and thus directly contractible, many decisions are not. The result is a double-sided moral hazard environment in which each party has incentives to free ride on the other's effort. A performance-based contract allows the client to align the incentives of the vendor, but it also exposes the vendor to stochastic earnings and thereby creates disincentives to make first-best decisions. To capture these issues, we develop a novel principal-agent model by integrating elements of the machine repairman model and a stochastic financial distress model within the double-sided moral hazard framework. We apply our model to solve the client's problem of designing the optimal performance-based contract. We find that the client can attain the first-best profit by restricting the search space to only two classes of performance-based contract structures: linear and tiered. We show that the linear contract structure has limited ability in attaining the first-best outcome, contingent on the vendor's exogenous characteristics. In contrast, the tiered contract structure enables the client to attain the first-best outcome regardless of vendor characteristics. Our results provide normative insights on the role of contract structures in eliminating any loss due to double-sided moral hazard or to the vendor's financial concerns. These results also provide theoretical support for the extensive use of tiered contracts observed in practice. © 2013 INFORMS.

Kremer M.,Pennsylvania State University | Minner S.,TU Munich | Van Wassenhove L.N.,Technology and Operations Management
Production and Operations Management | Year: 2014

The value of demand information underlies many supply chain strategies that aim at better matching supply and demand. This study reports on the results of a laboratory experiment designed to estimate the behavioral value of demand information. Relative to the commonly assumed benchmark of a rational risk-neutral decision maker, we find that decision makers are consistently willing to pay too much for the option to eliminate the risk of supply not matching demand. Contrary to intuition, we show that risk aversion does not explain this result. We posit that demand information provides behavioral value because it mitigates regret from ex post inventory errors. © 2013 Production and Operations Management Society.

Bhattacharya S.,Technology and Operations Management | Hasija S.,Technology and Operations Management | Van Wassenhove L.N.,Technology and Operations Management
Production and Operations Management | Year: 2014

We analyze the efficacy of different asset transfer mechanisms and provide policy recommendations for the design of humanitarian supply chains. As a part of their preparedness effort, humanitarian organizations often make decisions on resource investments ex ante because doing so allows for rapid response if an adverse event occurs. However, programs typically operate under funding constraints and donor earmarks with autonomous decision-making authority resting with the local entities, which makes the design of efficient humanitarian supply chains a challenging problem. We formulate this problem in an agency setting with two independent aid programs, where different asset transfer mechanisms are considered and where investments in resources are of two types: primary resources that are needed for providing the aid and infrastructural investments that improve the operation of the aid program in using the primary resources. The primary resources are acquired from earmarked donations. We show that allowing aid programs the flexibility of transferring primary resources improves the efficiency of the system by yielding greater social welfare than when this flexibility does not exist. More importantly, we show that a central entity that can acquire primary resources from one program and sell them to the other program can further improve system efficiency by providing a mechanism that facilitates the transfer of primary resources and eliminates losses from gaming. This outcome is achieved without depriving the individual aid programs of their decision-making autonomy while maintaining the constraints under which they operate. We find that outcomes with centralized resource transfer but decentralized infrastructural investments by the aid programs are the same as with a completely centralized system (where both resource transfer and infrastructural investments are centralized). © 2013 Production and Operations Management Society.

Van Wassenhove L.N.,INSEAD | Pedraza Martinez A.J.,Technology and Operations Management
International Transactions in Operational Research | Year: 2012

The demand for humanitarian aid is extraordinarily large and it is increasing. In contrast, the funding for humanitarian operations does not seem to be increasing at the same rate. Humanitarian logistics has the challenge of allocating scarce resources to complex operations in an efficient way. After acquiring sufficient contextual knowledge, academics can use operations research (OR) to adapt successful supply chain management best practices to humanitarian logistics. We present two cases of OR applications to field vehicle fleet management in humanitarian operations. Our research shows that by using OR to adapt supply chain best practices to humanitarian logistics, significant improvements can be achieved. © 2010 The Authors. International Transactions in Operational Research. © 2010 International Federation of Operational Research Societies.

Cumps B.,Technology and Operations Management
Information Technology for Development | Year: 2015

This paper illustrates how a computer re-use model can be extended to deal with e-waste challenges. First, we describe the re-use of computers as a factor that can help bridge the global digital divide. In an ICT4D context, refurbished computers can be used in developing countries. We describe and illustrate the operating model of such a computer re-use organization, highlighting the different components and interactions of the operating model. Next, we discuss how e-waste puts this computer re-use model under pressure. We argue that the sustainability of computer re-use in an ICT4D context is seriously impacted by this increasing e-waste problem. Finally, we describe how a computer re-use model can be extended and complemented with e-waste handling activities to retain positive effects in an ICT4D context. The paper is based on a single case study. © 2014 Commonwealth Secretariat.

Sosa M.E.,Technology and Operations Management
Production and Operations Management | Year: 2014

Design rework is a core phenomenon in new product development (NPD). Yet carrying out design rework presupposes recognizing the need for it. I characterize the types of interpersonal knowledge transfer that help developers realize the need for design rework in NPD. As predicted by the NPD literature, I find that individuals who interact frequently with colleagues to address their task interdependences are more likely to realize the need for rework. I also learn that interacting with colleagues who have different expertise in process-related knowledge (as opposed to product-related knowledge) facilitates realizing the need for rework. However, to develop a deeper understanding of how individuals recognize the need for rework when interacting with others, we must expand our views beyond task interdependence and expertise-related factors. In particular, organizational variables - both formal and informal - play a significant role. With respect to formal hierarchical structures, actors of superior rank are less likely to realize the need for rework regardless of whether or not their interacting partner is of superior rank; however, actors of superior rank are more likely to trigger realizing the need for rework when interacting with partners of subordinate rank. By examining an organization's informal structure, I discover that the social "embeddedness" of developers (i.e., the energy and attention invested in a dyadic relationship) significantly influences their propensity to realize the need for rework. Several hypotheses are tested in a sociometric study conducted within the development department of a software company, and I discuss the implications for behavioral operations in NPD. © 2013 Production and Operations Management Society.

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