Faculty affiliated with the Center have diverse research interests focusing on health care, retail operations, and supply chain/technology interface.
Healthcare Information Exchanges (HIEs) facilitate the electronic transfer of information among healthcare organizations. Several studies have shown that the HIEs have potential of saving billions of dollars per year and significantly improving healthcare delivery. In spite of this economic benefit, financial sustainability is still a key challenge for many HIEs. Hence, the focus of our work is to understand the operational decisions of an HIE, and provide insights on making rational decisions to ensure long-term financial sustainability. Typically the HIE partners’ with external suppliers through a rebate program where each member purchases (services/supplies) from specific suppliers through the network and receives a fixed percentage rebate. We examine a context where the HIE offers (i) healthcare information sharing service, and (ii) supplier rebates when choosing discount strategies, membership type, and membership fees. Healthcare providers (HPs) in turn evaluate these offers in making the decision to join the network. Managerial insights for the HIE provider as well as the policy-makers are as follows. Sizes of HPs and the number of potential HPs have a significant impact on the number of members joining the HIE. The increase in profit due to stronger network effects is higher with a larger number of potential members. When the network effect is high (low), a decrease in total maintenance cost results in a higher profit when the pool of potential HPs has a significantly low (high) variability in size. Thus, if HPs have high connectivity, forming a pool that is similar in size is beneficial. If HPs do not have strong connectivity, forming a unequal size member network is preferred.
In the automotive industry, many firms source key components from different suppliers, even though the components may function interdependently. This research examines the relationship between component level interdependence and quality and further identify operational factors that moderate this relationship. We synthesize information from several case studies to model the quality challenges faced by an automotive firm. For several sub-assemblies that go into its products, the firm sourced key components from two different suppliers. The sub-assemblies would fail whenever a component fails, but due to interdependent operations, failure of one component could cause the failure of the other. Improving suppliers’ quality performance was difficult since tracing failures of specific components was not possible. We show that (i) the supply chain structure moderates the impact of interdependence: i.e., reducing the interdependence between components improves quality when suppliers provide the components, but reducing interdependence worsens quality when the firm manufactures the entire sub-assembly; and (ii) penalties, and production/interdependence costs moderate the relation between interdependence and quality performance. Quality performance is lower for outsourcing as compared to in-house manufacturing and coordination schemes to bridge this quality gap are an effective mechanism.
Consumer product retailers typically offer a large range of similar (substitutable) products and suppliers of these products compete to acquire shelf space for their product. This research provides insights into the number of different brands of a product for display and/or stocking by the retailer. Insights stemming from this research are as follows. In a setting where quality/cost differentials between brands are small, both upstream market concentration effects and consumer perceptions of brand homogeneity affect retailer profitability. If there are a few (more) competing brands, then the retailer benefits if products are more (less) homogenous. For settings where quality/cost differentials are significant, the retailer can benefit by carrying a decoy brand (a brand stocked in extremely small (perhaps non-existent) quantities). These decoy brands generally serve to increase competition in the upstream market and thus, enhance retailer profitability.
Once perishable products (e.g., milk, bananas, etc.) are stocked, consumer valuations associated with these products decline over time. The focus of this work is on managing inventory, display, and waste generated through perishables in a retail setting. Two recommended display strategies are a: (a) common-display with both fresh and aged products in front; and (b) layer-display with fresh (or aged) products in front. Both of them enhance retailer profits coupled with a time-phased price discounting process. For example, the layer-display with aged products in front enables the retailer to profit more depending on the discounted price strategy. In certain cases, extreme strategies such as selling only fresh or only old products could be the optimal choice for the retailer. Finally, retailers can increase overall profits by decreasing product waste along with recommended product display options.
Blood banks are established intermediaries operating in an environment characterized with a high degree of supply (blood) uncertainty. Customers of these blood banks (e.g., hospitals), in turn, scale up their requirements of blood to compensate for this uncertainty. This leads to process inefficiencies and higher costs for the blood bank reflected in higher “prices” for eventual customers (e.g., patients). Several research studies examine operations for regional blood banks to offer the following actionable insights. First, if the bank offers each of their customers (the hospitals) an appropriate shortage subsidy, it will result in hospitals choosing to provide the bank with more accurate information of their demands. Such information would increase efficiencies in managing the supply-demand mismatch. On the downside, if there is high variability in supply and/or demand, then the subsidy offered will have to be very large. Second, from a tactical perspective, one process issue of critical importance for blood banks is an effective distribution of their supply to meet demand. Under high supply and demand uncertainty, a distribution policy to optimize shortage and obsolescence costs over a given time period is proposed. Through extensive analysis using historical data, this policy provides significant process efficiencies as compared to existing procedures.
Many companies introduce new products with both visible (e.g., higher recyclable content) and latent (e.g., reductions in process waste generation) green attributes that consumers value and are willing to purchase at a premium. Since the latent attributes lack market visibility, firms use an accentuation strategy (through advertising) to communicate these “green” benefits to consumers. Depending on product category, implementation of such a strategy could be either combative (i.e., exerting a market-share effect to redistribute consumers between competing firms) or constructive (i.e., exerting a market-size effect and expanding the overall size of the market for all firms). Thus, use of accentuation indirectly affects the return-on-investment (ROI) on visible green product attributes. Our study on the efficacy of accentuation from the perspective of competing firms and a social planner leads to the following managerial insights. For marginal cost-intensive products, accentuation is a losing proposition for both the competing firms and the social planner under combative (market-share-increasing) advertising, yet a winning proposition for all parties under constructive (market-size-expanding) advertising. On the other hand, for development cost-intensive products, the level of inherent accentuating attributes and the per-unit valuation premium moderate the effect of an accentuation strategy through combative and/or constructive advertising.
In the last decade, there has been a substantive increase in cross-market mergers and/or acquisitions (e.g., Google acquiring YouTube in 2006; Comcast acquiring NBC Universal in 2011; and Microsoft acquiring LinkedIn in 2016). This has drawn the attention of regulators and social planners who are primarily concerned with the anti-competitive effects of such activity. In this study, this key insights are that supply chain efficiencies moderates whether an integrated firm would take actions taken to “sabotage” its rivals. In essence, regulatory scrutiny is only justified when the merged firm has very efficient supply chains as compared to its independent rivals. A more interesting and counter-intuitive insight is that in certain cases, sabotage actions should not be regulated since they could be in line with those preferred by regulators to enhance social welfare. This lends credence to recent arguments that as long as actions by integrated firms stem from efficient behavior and do not harm competitors more than independent firm decisions, such actions are not anti-competitive.