We introduce a new problem that arises from operations planning in the process industry. This problem involves matching an order book against surplus inventory before production planning. It can be ...formulated by generalizing the multiple knapsack problem along three dimensions: (i) adding assignment restrictions on items that can be assigned to a knapsack, (ii) adding a new attribute (called "color" in this paper) to an item and then adding the associated "color" constraints that restrict the number of distinct colors that can be assigned to a knapsack, and (iii) considering multiple objectives for optimization. We formulate the problem, provide a result regarding its complexity, and report on our computational experience with solving a set of real instances based on data from the operations of a large steel plant. We then propose a network-flow-based heuristic that yields solutions within 3% of optimal (or the best known feasible solution). This system has been successfully deployed and is now used daily in the mill operations.
Industrial Symbiosis or By-Product Synergy is defined as a resource-sharing strategy that engages traditionally separate industries in a collective approach that involves a physical exchange of ...materials, water, energy, and by-products. Inspired by a real-world example of a paper-sugar symbiotic complex, we study the impact of competition on a firm's willingness to implement an industrial symbiotic system. Sugar and paper firms are symbiotically connected, in the sense that the biomass from the manufacture of one product is used as a raw material for the second product, and vice versa. We characterize the firm's operational optimal/equilibrium decisions for its two products - both in the presence and absence of a symbiotic system - under monopoly as well as under competition. Our models capture the supply-side (e.g., a fixed production cost and changes in the variable production costs), as well as the demand-side ("green" consumers who value the nature-friendly production process) impact of implementing industrial symbiosis. Our results indicate that firms are more willing to implement industrial symbiosis when (i) the proportion of the green consumers is high; or (ii) consumers' appreciation for the green variants is high; or (iii) variable production costs after implementation are lower. For a firm, competition from firms that only produce regular products encourages implementation of industrial symbiosis, whereas competition from firms that produce both regular and green products discourages it.
We consider the problem of scheduling operations in bufferless robotic cells that produce identical parts. Maximizing the long-term average throughput of parts is an important problem in both theory ...and practice. We define an appropriate state space required to analyze this problem and show that cyclic schedules which repeat a fixed sequence of robot moves indefinitely are the only ones that need to be considered. For the different classes of robotic cells studied in the literature, we discuss the current state of knowledge with respect to cyclic schedules. Finally, we discuss the importance of two fundamental open problems concerning optimal cyclic schedules, special cases for which these problems have been solved, and attempts to solve the general case.
An Approximation Scheme for Data Monetization Mehta, Sameer; Dawande, Milind; Janakiraman, Ganesh ...
Production and operations management,
June 2022, Letnik:
31, Številka:
6
Journal Article
Recenzirano
Odprti dostop
The unprecedented rate at which data are being generated has led to the growth of data markets where valuable data sets are bought and sold. A salient feature of this market is that a data‐buyer ...(agent) is endowed with multidimensional private information, namely, her “ideal” record that she values the most and how her valuation for a given record changes as its distance from her ideal record changes. Consequently, the revenue‐maximization problem faced by a data‐seller (principal), who serves multiple buyers, is a multidimensional mechanism‐design problem, which is well recognized as being difficult to solve. Our main result in this paper is an approximation scheme that guarantees a revenue within as close a positive amount from the optimal revenue as desired. The scheme generates a posted‐price menu consisting of a set of item–price pairs—each entry in the menu consists of an item, that is, a set of records from the data set, and the price corresponding to that item. As a trade‐off, the length of the menu resulting from the scheme increases as the desired guarantee gets closer to zero. For convenience in practice, data‐sellers may want the ability to limit the length of the menu used by the scheme. To facilitate this, we extend our analysis to obtain a general approximation guarantee corresponding to a menu of any given length. We also demonstrate how the seller can exploit buyers' preferences to generate intuitive and useful rules of thumb for an effective practical implementation of the scheme.
The construction of a software system requires not only individual coding effort from team members to realize the various functionalities, but also adequate team coordination to integrate the ...developed code into a consistent, efficient, and bug‐free system. On the one hand, continuous coding without adequate coordination can cause serious system inconsistencies and faults that may subsequently require significant corrective effort. On the other hand, frequent integrations can be disruptive to the team and delay development progress. This tradeoff motivates the need for a good coordination policy. Both the complexity and the importance of coordination is accentuated in distributed software development (DSD), where a software project is developed by multiple, geographically‐distributed sub‐teams. The need for coordination in DSD exists both within one sub‐team and across different sub‐teams. The latter type of coordination involves communication across spatial boundaries (different locations) and possibly temporal boundaries (different time zones), and is a major challenge that DSD faces. In this study, we model both inter‐ and intra‐sub‐team coordination in DSD based on the characteristics of the systems being developed by the sub‐teams, the deadline for completion, and the nature of division adopted by the sub‐teams with respect to development and integration activities. Our analysis of optimal coordination policies in DSD shows that integration activities by one sub‐team not only benefit that sub‐team (as is the case in co‐located development) but can also help the other sub‐teams by providing greater visibility, thereby resulting in a higher integration frequency relative to co‐located development. Analytical results are presented to demonstrate how the characteristics of the projects and the sub‐teams, and the efficiency of communication across the sub‐teams, affect coordination and productivity. We also investigate the pros and cons of using specialized integration sub‐teams and find that their advantage decreases as the project schedule becomes tighter. Decentralized decisions and asymmetric subsystems are also discussed.
We examine operational and incentive issues that conspire to reduce the quality of milk—via deliberate adulteration by milk farmers—acquired by competing collection intermediaries in developing ...countries. Broadly speaking, three main forces in the milk supply chain lead to the low quality of milk: high testing costs, harmful competition among stations, and free-riding among farmers. The goal of this study is to provide recommendations that address the quality problem with minimal testing. Interestingly, some intuitive interventions—such as providing stations with better infrastructure (e.g., storage and refrigeration facilities) or subsidizing testing costs—could hurt the quality of milk in the presence of competition. To save testing costs we utilize mixed testing, where the milk combined from multiple farmers is tested once. However, mixed testing makes the system vulnerable to free-riding among farmers. We counter free-riding by applying a credible threat of individual testing (although not its actual use in equilibrium). We then propose two interventions to combat the harmful competition among stations. The novelty of our proposals lies in utilizing the force of competition to solve a problem created by competition. The incentives in our proposals provide a new tool for the stations to compete and convert the harmful effect of competition (quality reduction) into a beneficial one (quality improvement), resulting in a socially desirable equilibrium outcome: all the farmers provide high-quality milk and each competing station conducts only one mixed test and no further testing.
This paper was accepted by Serguei Netessine, operations management
.
In this paper, we address the challenge faced by ad networks in managing the fading ads (or
fads
) shown to an end user during a session of a mobile application (app). A fad is an ad that disappears ...if the user does not interact with it for some length of time. The withdrawn ad could be replaced by another ad. The goal of the ad network is to determine the sequence of fads shown to the user in an ad space to maximize the expected revenue generated over the user’s app session. Mobile in-app advertising is uniquely suited for the sequencing of fads because user sessions are typically longer (than web sessions), and a single ad is displayed at any given point in time. We consider two factors that affect the probability of a click on an ad during a session: (i) the
sojourn effect
, the influence of the passage of time, and (ii) the
exposure effect
, the influence of the number of prior exposures of the ad to the user during that session. We provide simple and optimal policies for the ad-sequencing problem when either of these two effects dominates. For the general case in which both effects are significant, we offer a provably near-optimal heuristic policy. The following two enhancements to the basic sequencing problem are also analyzed: (a) consideration of both click ads (which generate revenue for the ad network only through clicks) and
display ads
(which generate revenue only through exposures) and (b) the presence of a constraint imposed by the publisher (i.e., the owner of the app) that the expected revenue in each time slot exceeds a certain threshold.
The online appendix is available at
https://doi.org/10.1287/isre.2017.0697
.
Mobile-promotion platforms enable advertisers (individual users or businesses) to directly launch their personalized mobile advertising campaigns. These platforms contract with advertisers to provide ...a certain number of impressions on mobile apps in their desired sets of geographic locations (usually cities or zip codes) within their desired time durations (for example, a month); the execution of each such a contract is referred to as a campaign. To fulfill the demands of the campaigns, the platform bids in real time at an ad exchange to win mobile impressions arising over the desired sets of locations of the campaigns and then allocates the acquired impressions among the ongoing campaigns. The core features that characterize this procurement problem—supply is uncertain, supply cannot be inventoried, and there are demand-side commitments to be met—are applicable to a variety of other business settings as well. Our analysis in this paper offers near-optimal policies for both a static model and a dynamic model of campaign arrivals. The static model represents a subscription-based setting, where customers provide information of their campaigns in advance to the platform. The dynamic model represents a setting where campaigns arrive randomly and the platform reacts to these arrivals in real time; for this model, our rolling-horizon policy periodically recomputes the platform’s procurement (or bidding) and allocation decisions. We establish performance bounds on our policies for both models and demonstrate the attractiveness of these bounds on real data. By isolating important structural features of a given set of campaigns, we discuss practical implementation issues and offer procurement-policy recommendations for a variety of settings based on these features.
Data and the online appendix are available at
https://doi.org/10.1287/mnsc.2017.2837
.
This paper was accepted by Vishal Gaur, operations management.
Quality issues in milk—arising primarily from deliberate adulteration by producers—have been reported in several developing countries. In the milk supply chain, a station buys raw milk from a number ...of producers, mixes the milk and sells it to a firm (that then sells the processed milk to end consumers). We study a non‐cooperative game between a station and a population of producers. Apart from penalties on proven low‐quality producers, two types of incentives are analyzed: confessor rewards for low‐quality producers who confess and quality rewards for producers of high‐quality milk. Contrary to our expectations, whereas (small) confessor rewards can help increase both the quality of milk and the station's profit, quality rewards can be detrimental. We examine two structures based on the ordering of individual and mixed testing of milk: pre‐mixed individual testing (first test a fraction of producers individually and then possibly perform a mixed test on the remaining producers) and post‐mixed individual testing (first test the mixed milk from all producers and then test a fraction of producers individually). Whereas pre‐mixed individual testing can be socially harmful, a combination of post‐mixed individual testing and other incentives achieves a desirable outcome: all producers supply high‐quality milk with only one mixed test and no further testing by the station.
Descending mechanisms for procurement (or, ascending mechanisms for selling) have been well‐recognized for their simplicity from the viewpoint of bidders—they require less bidder sophistication as ...compared to sealed‐bid mechanisms. In this study, we consider procurement under each of two types of constraints: (1) Individual/Group Capacities: limitations on the amounts that can be sourced from individual and/or subsets of suppliers, and (2) Business Rules: lower and upper bounds on the number of suppliers to source from, and on the amount that can be sourced from any single supplier. We analyze two procurement problems, one that incorporates individual/group capacities and another that incorporates business rules. In each problem, we consider a buyer who wants to procure a fixed quantity of a product from a set of suppliers, where each supplier is endowed with a privately known constant marginal cost. The buyer's objective is to minimize her total expected procurement cost. For both problems, we present descending auction mechanisms that are optimal mechanisms. We then show that these two problems belong to a larger class of mechanism design problems with constraints specified by polymatroids, for which we prove that optimal mechanisms can be implemented as descending mechanisms.
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