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Management Sciences and Quantitative Methods Commons™
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Articles 1 - 20 of 20
Full-Text Articles in Management Sciences and Quantitative Methods
Do Competing Suppliers Maximize Profits As Theory Suggests? An Empirical Evaluation, Ehsan Elahi, Roger Blake
Do Competing Suppliers Maximize Profits As Theory Suggests? An Empirical Evaluation, Ehsan Elahi, Roger Blake
Management Science and Information Systems Faculty Publication Series
This research compares results from laboratory experiments with predictions from theory for decisions made by competing suppliers. We consider a supply chain in which a single buyer outsources the manufacture of a commodity product to suppliers not on the basis of price, but rather on service. Three different criteria on which suppliers compete are evaluated: 1) a guaranteed specific inventory fill-rate, 2) guaranteed level of base-stock, and 3) a parameter optimizing the supply chain in the buyer’s favor. Our results show that in most cases, suppliers’ decisions are significantly different than the Nash equilibrium, meaning that they do not maximize …
Do Competing Suppliers Maximize Profits As Theory Suggests? An Empirical Evaluation, Ehsan Elahi, Roger Blake
Do Competing Suppliers Maximize Profits As Theory Suggests? An Empirical Evaluation, Ehsan Elahi, Roger Blake
Ehsan Elahi
This research compares results from laboratory experiments with predictions from theory for decisions made by competing suppliers. We consider a supply chain in which a single buyer outsources the manufacture of a commodity product to suppliers not on the basis of price, but rather on service. Three different criteria on which suppliers compete are evaluated: 1) a guaranteed specific inventory fill-rate, 2) guaranteed level of base-stock, and 3) a parameter optimizing the supply chain in the buyer’s favor. Our results show that in most cases, suppliers’ decisions are significantly different than the Nash equilibrium, meaning that they do not maximize …
An Experimental Investigation Of Outsourcing Through Competition, Ehsan Elahi, Roger Blake
An Experimental Investigation Of Outsourcing Through Competition, Ehsan Elahi, Roger Blake
Management Science and Information Systems Faculty Publication Series
Our research uses laboratory experiments to examine the theoretical results of competition between suppliers in an outsourcing setup. We consider a supply chain in which a single buyer needs to outsource the manufacturing of a product among N potential suppliers. The buyer allocates demand to suppliers not on the basis of price, but rather on service. We analyze the levels of service suppliers will decide to provide when competing on three different criteria specified by the buyer. For the first, suppliers compete by providing the buyer a specific service level (fill-rate), and for the second by maintaining a specific quantity …
Value Of Information: Facilitating Targeted Information Acquisition In Decision Processes, Jeffrey Keisler
Value Of Information: Facilitating Targeted Information Acquisition In Decision Processes, Jeffrey Keisler
Management Science and Information Systems Faculty Publication Series
No abstract provided.
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Management Science and Information Systems Faculty Publication Series
In this paper we consider a single buyer who wants to outsource the manufacturing of a product to N potential suppliers. The buyer’s objective is to maximize the service level she receives from the suppliers. The suppliers compete for the buyer’s demand based on a competition parameter which the buyer announces along with an allocation rule. We model each supplier as a make-to-stock queueing system. Using a simple proportional allocation function, we compare two competition parameters: service level and inventory level. We show that inventory competition creates a higher overall service level for the buyer. We also show an optimal …
Product Bundling: Impacts Of Product Heterogeneity And Risk Considerations, Mehdi Sheikhzadeh, Ehsan Elahi
Product Bundling: Impacts Of Product Heterogeneity And Risk Considerations, Mehdi Sheikhzadeh, Ehsan Elahi
Management Science and Information Systems Faculty Publication Series
Bundling has been extensively studied in the literature and its benefits have been manifested through three perspectives of achieving better price discrimination, helping to save costs, and preserving the power for deterring a potential entrant. In this study, we examine two aspects of bundling which have not been studied before. We examine the impact of product heterogeneity on bundling decisions. We also address risk considerations in a bundling problem. Specifically, we consider a retailer who has the option of selling a bundle of two products (pure bundling policy), or selling the products separately (no-bundling policy). The retailer could also face …
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Outsourcing Through Competition: What Is The Best Competition Parameter?, Ehsan Elahi
Ehsan Elahi
In this paper we consider a single buyer who wants to outsource the manufacturing of a product to N potential suppliers. The buyer’s objective is to maximize the service level she receives from the suppliers. The suppliers compete for the buyer’s demand based on a competition parameter which the buyer announces along with an allocation rule. We model each supplier as a make-to-stock queueing system. Using a simple proportional allocation function, we compare two competition parameters: service level and inventory level. We show that inventory competition creates a higher overall service level for the buyer. We also show an optimal …
How Can We Improve The Performance Of Supply Chain Contracts? An Experimental Study, Ehsan Elahi, Narasimha Lamba, Chinthana Ramaswamy
How Can We Improve The Performance Of Supply Chain Contracts? An Experimental Study, Ehsan Elahi, Narasimha Lamba, Chinthana Ramaswamy
Management Science and Information Systems Faculty Publication Series
Although optimal forms of supply chain contracts have been widely studied in the literature, it has also been observed that decision makers fail to make optimal decisions in these contract setups. In this research, we propose different approaches to improve the performance of supply chain contracts in practice. We consider revenue sharing and buyback contracts between a rational supplier and a retailer who, unlike the supplier, is susceptible to decision errors. We propose five approaches to improve the retailer’s decisions which are in response to contract terms offered by the supplier. Through laboratory experiments, we examine the effectiveness of each …
How Can We Improve The Performance Of Supply Chain Contracts? An Experimental Study, Ehsan Elahi, Narasimha Lamba, Chinthana Ramaswamy
How Can We Improve The Performance Of Supply Chain Contracts? An Experimental Study, Ehsan Elahi, Narasimha Lamba, Chinthana Ramaswamy
Ehsan Elahi
Although optimal forms of supply chain contracts have been widely studied in the literature, it has also been observed that decision makers fail to make optimal decisions in these contract setups. In this research, we propose different approaches to improve the performance of supply chain contracts in practice. We consider revenue sharing and buyback contracts between a rational supplier and a retailer who, unlike the supplier, is susceptible to decision errors. We propose five approaches to improve the retailer’s decisions which are in response to contract terms offered by the supplier. Through laboratory experiments, we examine the effectiveness of each …
Connecting Big Data With Big Decisions: Ideas For Synthesizing Analytics And Decision Analysis, Jeffrey Keisler
Connecting Big Data With Big Decisions: Ideas For Synthesizing Analytics And Decision Analysis, Jeffrey Keisler
Management Science and Information Systems Faculty Publication Series
This paper describes an approach to connect decision analysis models with outputs of analytic methods applied to various types of big data. Decision analysis models focus on issues of concern to a decision maker and incorporate use of a range of methods and axioms to develop insights about what the decision maker should do. In particular, decision analysis models typically use subjective judgments from the decision maker to describe beliefs about the likelihood of events and the desirability of outcomes. In order for human judgments to be improved by the availability of large amounts of data and processing power, it …
Communicating Analytic Results: A Tutorial For Decision Consultants, Jeffrey Keisler, Patrick Noonan
Communicating Analytic Results: A Tutorial For Decision Consultants, Jeffrey Keisler, Patrick Noonan
Management Science and Information Systems Faculty Publication Series
Good analysis alone may not achieve the goals of decision analysis (DA) engagements. Good communication of the results of that analysis can help stakeholders understand, accept, and implement the recommended course of action. Practitioners can use decision analytic principles when considering the decision of how to communicate results themselves. From this perspective, we consider a range of questions to ask in preparing for communication with the client and other stakeholders. We review standard communication practices in DA engagements. The standard practice can be improved by drawing on insights from other areas of management practice. Decision analysis has both technical and …
Optimal Service-Based Competition With Heterogeneous Suppliers, Ehsan Elahi, Saif Benjaafar, Karen L. Donohue
Optimal Service-Based Competition With Heterogeneous Suppliers, Ehsan Elahi, Saif Benjaafar, Karen L. Donohue
Management Science and Information Systems Faculty Publication Series
We investigate how a competition can be designed to maximize expected profit for a buyer who wishes to allocate demand among a diverse set of suppliers when his profit is dependent on the supplier’s service levels. The candidate suppliers are heterogeneous in their capacities and cost structures, and compete for shares of the buyer’s demand based on their promised service levels. To characterize the optimal competition, we first identify a family of allocation functions that are service maximizing, meaning they can intensify the competition to a point where each supplier provides its maximum feasible service level and the outcome of …
An Invitation To Portfolio Decision Analysis, Ahti Salo, Jeffrey Keisler, Alec Morton
An Invitation To Portfolio Decision Analysis, Ahti Salo, Jeffrey Keisler, Alec Morton
Management Science and Information Systems Faculty Publication Series
Portfolio Decision Analysis (PDA) – the application of decision analysis to the problem of selecting a subset or portfolio from a large set of alternatives – accounts for a significant share, perhaps the greater part, of decision analysis consulting. By construction, PDA has a sound theoretical and methodological basis, and its ability to contribute to better resource allocation decisions has been demonstrated in numerous applications. This book pulls together some of the rich and diverse efforts as a starting point for treating PDA as a promising and distinct area of study and application. In this introductory chapter, we first describe …
Outsourcing Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Outsourcing Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Management Science and Information Systems Faculty Publication Series
We consider a single buyer who wishes to outsource a fixed demand for a manufactured good or service at a fixed price to a set of potential suppliers. We examine the value of competition as a mechanism for the buyer to elicit service quality from the suppliers. We compare two approaches the buyer could use to orchestrate this competition: (1) a Supplier-Allocation (SA) approach, which allocates a proportion of demand to each supplier with the proportion allocated to a supplier increasing in the quality of service the supplier promises to offer, and (2) a Supplier-Selection (SS) approach, which allocates all …
Outsourcing To Non-Identical Suppliers Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Outsourcing To Non-Identical Suppliers Via Service Competition, Ehsan Elahi, Saif Benjaafar, Karen Donohue
Management Science and Information Systems Faculty Publication Series
In this paper, we consider a single buyer who wishes to outsource a fixed demand for a manufactured good or service at a fixed price to a set of N suppliers. We examine the value of competition as a mechanism for the buyer to elicit good service quality from her suppliers. In particular, we consider a scheme in which the buyer allocates a proportion of demand to each supplier, with the proportion a supplier receives increasing in the service level she offers. Suppliers compete for expected market share, which increases in the offered service level. The suppliers affect their service …
Additivity Of Information Value In Two-Act Linear Loss Decisions With Normal Priors, Jeffrey Keisler
Additivity Of Information Value In Two-Act Linear Loss Decisions With Normal Priors, Jeffrey Keisler
Management Science and Information Systems Faculty Publication Series
For the two-act linear loss decision problem with normal priors, conditions are derived for which the expected value of perfect information about two independent risks is super-additive in value. Several applications show how a variety of decision problems can reduce to the canonical problem, and how the general results obtained here can be translated simply to prescriptions for specific situations.
Technical Note: Comparative Static Analysis Of Information Value In A Canonical Decision Problem, Jeffrey Keisler
Technical Note: Comparative Static Analysis Of Information Value In A Canonical Decision Problem, Jeffrey Keisler
Management Science and Information Systems Faculty Publication Series
To gain insight into the behavior of the value of information, this paper identifies specific rules for a canonical decision problem: the two-act linear loss decision with normal prior probability distributions. Conditions are derived for which the expected value of perfect information increases when mean and standard deviation are both linear functions of an exogenous variable. A variety of richer decision problems can be adapted to the problem, so that the general results obtained here can be immediately applied to understand drivers of information value.
Allocating Contractor Risks In The Hanford Waste Cleanup, Jeffrey M. Keisler, William A. Buehring, Peter D. Mclaughlin, Mark A. Robershotte, Ronald G. Whitfield
Allocating Contractor Risks In The Hanford Waste Cleanup, Jeffrey M. Keisler, William A. Buehring, Peter D. Mclaughlin, Mark A. Robershotte, Ronald G. Whitfield
Management Science and Information Systems Faculty Publication Series
Organizations may view outsourcing as a way to manage risk. We developed a decision-analytic approach to determine which risks the buyer can share or shift to vendors and which ones it should bear. We found that allocating risks incorrectly could increase costs dramatically. Between 1995 and 1998, we used this approach to develop the request for proposals (RFP) for the US Department of Energy’s (DOE’s) privatization initiative for the Hanford tank waste remediation system (TWRS). In the model, we used an assessment protocol to predict how vendors would react to proposed risk allocations in terms of their actions and their …
Attribute-Based Differentiation Of Alternatives, Jeffrey Keisler
Attribute-Based Differentiation Of Alternatives, Jeffrey Keisler
Management Science and Information Systems Faculty Publication Series
An intermediate step is introduced to the decision dialogue process for decision analysis. Alternatives are refined after they have been generated within a strategy table but before they are subject to more detailed evaluation. Two or more judges create a subjective mapping from alternatives to attributes that will later be mapped to criteria. In strategy tables, each of the alternative strategies consists of a coherent set of choices made across several decisions that are to be coordinated. These strategic alternatives are modified so as to increase their differentiation in the attribute space, rather than in the decision space alone. When …
Combining Multi-Attribute Utility And Geographic Information For Boundary Decisions: An Application To Park Planning, Jeffrey Keisler, Ronald Sundell
Combining Multi-Attribute Utility And Geographic Information For Boundary Decisions: An Application To Park Planning, Jeffrey Keisler, Ronald Sundell
Management Science and Information Systems Faculty Publication Series
The quality and value of an area depend primarily on what is found within its designated boundaries. To determine the value of such areas in terms of boundaries, we have developed a methodology for integrating multi-attribute utility functions with spatial analysis so that desirable, or appropriate, boundaries can be determined on the basis of the goals and objectives for the park. The key to successful evaluation is the development of measures for what decision makers value, rather than merely using what is easily measured. In a detailed example for planning of national parks, the fundamental objectives are conservation and societal …