ORCID Profile
0000-0001-7688-5122
Current Organisation
Indiana University Bloomington
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Publisher: Elsevier BV
Date: 11-1999
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 10-2004
Abstract: This paper demonstrates optimal policies for capacitated serial multiechelon production/inventory systems. Extending the Clark and Scarf (1960) model to include installations with production capacity limits, we demonstrate that a modified echelon base-stock policy is optimal in a two-stage system when there is a smaller capacity at the downstream facility. This is shown by decomposing the dynamic programming value function into value functions dependent upon in idual echelon stock variables. We show that the optimal structure holds for both stationary and nonstationary stochastic customer demand. Finite-horizon and infinite-horizon results are included under discounted-cost and average-cost criteria.
Publisher: Wiley
Date: 23-01-2023
DOI: 10.1111/POMS.13648
Abstract: At the onset of the COVID‐19 pandemic, hospitals were in dire need of data‐driven analytics to provide support for critical, expensive, and complex decisions. Yet, the majority of analytics being developed were targeted at state‐ and national‐level policy decisions, with little availability of actionable information to support tactical and operational decision‐making and execution at the hospital level. To fill this gap, we developed a multi‐method framework leveraging a parsimonious design philosophy that allows for rapid deployment of high‐impact predictive and prescriptive analytics in a time‐sensitive, dynamic, data‐limited environment, such as a novel pandemic. The product of this research is a workload prediction and decision support tool to provide mission‐critical, actionable information for in idual hospitals. Our framework forecasts time‐varying patient workload and demand for critical resources by integrating disease progression models, tailored to data availability during different stages of the pandemic, with a stochastic network model of patient movements among units within in idual hospitals. Both components employ adaptive tuning to account for hospital‐dependent, time‐varying parameters that provide consistently accurate predictions by dynamically learning the impact of latent changes in system dynamics. Our decision support system is designed to be portable and easily implementable across hospital data systems for expeditious expansion and deployment. This work was contextually grounded in close collaboration with IU Health, the largest health system in Indiana, which has 18 hospitals serving over one million residents. Our initial prototype was implemented in April 2020 and has supported managerial decisions, from the operational to the strategic, across multiple functionalities at IU Health.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 10-2015
Abstract: This paper examines how a firm’s financial distress and the legal environment regarding the ease of bankruptcy reorganization can alter product market competition and supplier–buyer relationships. We identify three effects—predation, bail-out, and abetment—that can change firms’ behavior from their actions in the absence of financial distress. The predation effect increases competition before potential bankruptcy as the nondistressed competitor behaves as if it has some first-mover advantage that could benefit a supplier with price control. The bail-out effect reflects the supplier’s incentive to grant the distressed firm concessions to preserve competition, improving supply chain efficiency and providing support for the exclusivity rule in Chapter 11 of the United States Bankruptcy Code when the supplier and the distressed firm are financially linked. The abetment effect is that the supplier may deliberately abet the competitor’s predation, leading to increased operational disadvantages for the distressed firm before bankruptcy. Together these effects stress that a firm’s bankruptcy potential can hurt its competitors and benefit its suppliers/customers. They also provide guidelines for firms’ operational decisions in such situations, a rationale for observed firm actions surrounding bankruptcies, and motivation for policies supporting reorganization and relaxing broad enforcement of nondiscriminatory pricing regulations. This paper was accepted by Serguei Netessine, operations management.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 10-2008
Abstract: We investigate the situation where a customer experiencing an inventory stockout at a retailer potentially leaves the firm's market. In classical inventory theory, a unit stockout penalty cost has been used as a surrogate to mimic the economic effect of such a departure in this study, we explicitly represent this aspect of consumer behavior, incorporating the diminishing effect of the consumers leaving the market upon the stochastic demand distribution in a time-dynamic context. The initial model considers a single firm. We allow for consumer forgiveness where customers may flow back to the committed purchasing market from a nonpurchasing “latent” market. The per-period decisions include a marketing mix to attract latent and new consumers to the committed market and the setting of inventory levels. We establish conditions under which the firm optimally operates a base-stock inventory policy. The subsequent two models consider a duopoly where the potential market for a firm is now the committed market of the other firm each firm decides its own inventory level. In the first model, the only decisions are the stocking decisions and in the second model, a firm may also advertise to attract dissatisfied customers from its competitor's market. In both cases, we establish conditions for a base-stock equilibrium policy. We demonstrate comparative statics in all models.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 08-2011
Abstract: We consider a two-stage serial supply chain with capacity limits, where each installation is operated by managers attempting to minimize their own costs. A multiple-period model is necessitated by the multiple stages, capacity limits, stochastic demand, and the explicit consideration of inventories. With appropriate salvage value functions, a Markov equilibrium policy is found. Intuitive profit dominance allows for existence of a unique equilibrium solution, which is shown to be a modified echelon base-stock policy. This equilibrium policy structure is sustained in the infinite horizon. A numerical study compares the behavior of the decentralized system with the first-best integrated capacitated system. The performance of this decentralized system relative to the integrated system across other parameters can be very good over a broad range of values. This implies that an acceptable system performance may be attained without the imposition of a contract or other coordinating mechanism, which themselves may encounter difficulties in implementation in the form of negotiation, execution, or enforcement of these agreements. We find instances where tighter capacities may actually enhance channel efficiency. We also examine the effect of capacity utilization on the system suboptimality.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 05-2013
Abstract: This paper analyzes the United States Medicare hospice reimbursement policy. The existing policy consists of a daily payment for each patient under care with a global cap of revenues accrued during the Medicare year, which increases with each newly admitted patient. We investigate the hospice's expected profit and provide reasons for a spate of recent provider bankruptcies related to the reimbursement policy recommendations to alleviate these problems are given. We also analyze a hospice's incentives for patient management, finding several unintended consequences of the Medicare reimbursement policy. Specifically, a hospice may seek short-lived patients (such as cancer patients) over patients with longer expected lengths of stay. The effort with which hospices seek out, or recruit, such patients will vary during the year. Furthermore, the effort they apply to actively discharge a patient whose condition has stabilized may also depend on the time of year. These phenomena are unintended and undesirable but are a direct consequence of the Medicare reimbursement policy. We propose an alternative reimbursement policy to ameliorate these shortcomings. This paper was accepted by Christian Terwiesch, operations management.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 05-2022
Abstract: Supply chains are distributed across multiple locations, and to effectively manage inventory in these channels requires knowledge of inventory levels at many sites. Such information is changing dynamically, so it is unrealistic to expect such information to be readily available, especially in channels with production capacity limits. In “Conveying Demand Information in Serial Supply Chains with Capacity Limits,” Kapuscinski and Parker show that local information alone is sufficient to effectively manage inventory in capacity-limited supply chains. In supply chains with capacity limits, the retailer does not faithfully pass the demand information to her supplier but sends censored information in her order. Despite censoring, these orders contain sufficient information for the modified echelon base-stock policy, a full-information policy, to be mimicked. They provide evidence using numerical experiments and analytical bounds that the modified echelon base-stock policy performs superbly. Also, they describe information requirements used in supply chain literature and demonstrate that with an incentive-compatible mechanism, similar to Lee and Whang (2000), local managers will follow the centralized inventory policy.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 04-2014
Abstract: We provide a review of the types of equilibria typically found in operations management inventory papers and a discussion on when the commonly used stationary infinite-horizon (open-loop) equilibrium may be sufficient for study. We focus particularly on order-up-to and basestock equilibria in the context of inventory duopolies. We give conditions under which the stationary infinite-horizon equilibrium is also a Markov perfect (closed-loop) equilibrium. These conditions are then applied to three specific duopolies. The first application is one with stockout-based substitution, where the firms face independent direct demand but some fraction of a firm's lost sales will switch to the other firm. The second application is one where shelf-space display stimulates primary demand and reduces demand for the other firm's product. The final application is one where the state variables represent goodwill rather than inventory. These specific problems have been previously studied in both the single period and/or stationary infinite-horizon (open-loop) settings but not in Markov perfect (closed-loop) settings. Under the Markov perfect setting, a variety of interesting dynamics may occur, including that there may be a so-called commitment value to inventory.
Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Date: 02-2022
Abstract: We study a buyer’s problem of auditing suppliers within an existing network to ensure social responsibility compliance. The buyer suffers economic damages if a violation at a supplier is exposed (whether by the media, regulator, or nongovernmental organization). To avoid damages, the buyer may audit the network to identify noncompliance. If a supplier fails an audit, the buyer must take one of two costly actions: either rectify the supplier or drop the supplier (along with any dependent suppliers). Dropping a supplier changes the network topology, reducing competition and thereby increasing the buyer’s input cost arising from an equilibrium. We show that the buyer’s optimal dynamic auditing policy has two subphases: the buyer will first audit and drop some suppliers before either auditing and rectifying all remaining suppliers or halting auditing altogether. By halting, the buyer tolerates some noncompliance in the network (“see no evil, hear no evil”). Within the audit-and-drop subphase, when auditing only in the upper tier, the buyer always audits a least valuable unaudited supplier, yielding greater balance in the network. When the buyer audits both tiers, it might choose a supplier other than the least valuable. The buyer may choose a supplier in a pivotal position to help ascertain the viability of a portion of the network (“litmus test”). In extensions, we find that when violations in tier 1 carry a higher penalty for the buyer, the buyer may audit and rectify only tier 1 suppliers when audits may be inaccurate, the buyer more likely tolerates a greater level of noncompliance. This paper was accepted by Charles Corbett, operations management.
No related grants have been discovered for Rodney Parker.