Baris Ata

Congestion-Based Leadtime Quotation and Pricing for Revenue Maximization with Heterogeneous Customers
Date Posted:Wed, 27 Oct 2021 17:50:13 -0500
This paper studies a queuing model where two customer classes compete for a given resource and each customer is dynamically quoted a menu of price and leadtime pairs upon arrival. Customers select their preferred pairs from the menu and the server is obligated to meet the quoted leadtime. Customers have convex?concave delay costs. The firm does not have information on a given customer?s type, so the offered menus must be incentive compatible. A menu quotation policy is given and proven to be asymptotically optimal under traditional large-capacity heavy-traffic scaling. Full paper available at ...

Congestion-Based Lead-Time Quotation for Heterogenous Customers with Convex-Concave Delay Costs: Optimality of a Cost-Balancing Policy Based on Convex Hull Functions
Date Posted:Wed, 27 Oct 2021 17:48:17 -0500
We consider a congestible system serving multiple classes of customers who differ in their delay sensitivity and valuation of service (or product). Customers are endowed with convex-concave delay cost functions. A system manager offers a menu of lead times and corresponding prices to arriving customers, who then choose the lead-time?price pair that maximizes their net utility (value minus disutility of delay and price). We investigate how such menus should be chosen dynamically (depending on the system backlog) to maximize welfare. We formulate a novel fluid model of the problem and show that the cost-balancing policy (based on the convex hulls of the delay cost functions) is socially optimal if the system manager can tell customer types apart. If types are indistinguishable to the system manager, the cost-balancing policy is also incentive compatible under social optimization. Finally, we show through a simulation study that the cost-balancing policy does well in the context of the original (stochastic) problem by testing it against various natural benchmarks. Full paper available at ...

New: Congestion-Based Leadtime Quotation and Pricing for Revenue Maximization with Heterogeneous Customers
Date Posted:Wed, 27 Oct 2021 08:55:48 -0500
This paper studies a queuing model where two customer classes compete for a given resource and each customer is dynamically quoted a menu of price and leadtime pairs upon arrival. Customers select their preferred pairs from the menu and the server is obligated to meet the quoted leadtime. Customers have convex–concave delay costs. The firm does not have information on a given customer’s type, so the offered menus must be incentive compatible. A menu quotation policy is given and proven to be asymptotically optimal under traditional large-capacity heavy-traffic scaling. Full paper available at ...

New: Congestion-Based Lead-Time Quotation for Heterogenous Customers with Convex-Concave Delay Costs: Optimality of a Cost-Balancing Policy Based on Convex Hull Functions
Date Posted:Wed, 27 Oct 2021 08:53:52 -0500
We consider a congestible system serving multiple classes of customers who differ in their delay sensitivity and valuation of service (or product). Customers are endowed with convex-concave delay cost functions. A system manager offers a menu of lead times and corresponding prices to arriving customers, who then choose the lead-time–price pair that maximizes their net utility (value minus disutility of delay and price). We investigate how such menus should be chosen dynamically (depending on the system backlog) to maximize welfare. We formulate a novel fluid model of the problem and show that the cost-balancing policy (based on the convex hulls of the delay cost functions) is socially optimal if the system manager can tell customer types apart. If types are indistinguishable to the system manager, the cost-balancing policy is also incentive compatible under social optimization. Finally, we show through a simulation study that the cost-balancing policy does well in the context of the ...

REVISION: On Hospice Operations Under Medicare Reimbursement Policies
Date Posted:Thu, 31 Oct 2013 13:08:50 -0500
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 pro?t 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, ?nding several unintended consequences of the Medicare reimbursement policy. Speci?cally, a hospice may seek short-lived patients (such as cancer patients) over patients with longer expected length-of-stay and the e?ort with which they seek-out, or recruit, such patients will vary during the year. Further, the e?ort they apply to actively discharge patients whose condition has stabilized may also depend on the time of year. These phenomena are unintended and ...

The Value of Partial Resource Pooling: Should a Service Network Be Integrated or Product-Focused?
Date Posted:Thu, 07 Feb 2013 08:33:08 -0600
We investigate how network design impacts capacity requirements and responsiveness, which is a natural performance indicator of quality of service. Inspired by the contrasting network design approaches of FedEx and UPS, we study when two service classes (e.g., express or regular) should be served by dedicated resources (e.g., air or ground) or by an integrated network. We present analytic expressions for the delay distributions and the network integration value, which show how the value of network integration depends on the quality of service guarantees (speed and reliability of service) and the demand characteristics (averages volume and variance of each service class and their correlation). Our results suggests that operating dedicated networks is a fine strategy (meaning that network integration is of little value) if the firm primarily serves express requests with high reliability and if the correlation with regular requests is not strongly negative.

New: The Value of Partial Resource Pooling: Should a Service Network Be Integrated or Product-Focused?
Date Posted:Thu, 07 Feb 2013 03:33:08 -0600
We investigate how network design impacts capacity requirements and responsiveness, which is a natural performance indicator of quality of service. Inspired by the contrasting network design approaches of FedEx and UPS, we study when two service classes (e.g., express or regular) should be served by dedicated resources (e.g., air or ground) or by an integrated network. We present analytic expressions for the delay distributions and the network integration value, which show how the value of ...

REVISION: On Hospice Operations Under Medicare Reimbursement Policies
Date Posted:Fri, 06 Jul 2012 18:22:56 -0500
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 pro?t 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 ...

On Hospice Operations Under Medicare Reimbursement Policies
Date Posted:Fri, 06 Jul 2012 00:00:00 -0500
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 pro?t 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, ?nding several unintended consequences of the Medicare reimbursement policy. Speci?cally, a hospice may seek short-lived patients (such as cancer patients) over patients with longer expected length-of-stay and the e?ort with which they seek-out, or recruit, such patients will vary during the year. Further, the e?ort they apply to actively discharge patients 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 which ameliorates these shortcomings.

Harvest: Organic Waste Recycling with Energy Recovery (A)
Date Posted:Sun, 18 Mar 2012 19:07:16 -0500
This case describes the waste management industry and a clean technology solution for landfill diversion and renewable energy production. The (A) case focuses on the operational characteristics of waste management and waste to energy, as well as the characteristics of the waste management industry. The intent of the (A) case is to have students perform operational analysis on the organic waste to energy process to evaluate whether a potential new plant is economically feasible and attractive. The (B) case focuses on the sourcing dilemma: pre-processing vs. source separation. To ensure that its waste input fuel is of sufficiently high quality (i.e., low level of inorganic contaminants), the company can either build a pre-processing facility to sort incoming waste to filter out contaminants, or work with suppliers to source separate their waste stream. Learning Objective: Illustrate the societal and operational challenges inherent in waste management. Provide framework to students for evaluating possible solutions.

New: Harvest: Organic Waste Recycling with Energy Recovery (B)
Date Posted:Sun, 18 Mar 2012 16:30:43 -0500
This case describes the waste management industry and a clean technology solution for landfill diversion and renewable energy production. The (A) case focuses on the operational characteristics of waste management and waste to energy, and the characteristics of the waste management industry. The intent of the (A) case is to have students perform operational analysis on the organic waste to energy process to evaluate whether a potential new plant is economically feasible and attractive. The (B) ...

New: Harvest: Organic Waste Recycling with Energy Recovery (A)
Date Posted:Sun, 18 Mar 2012 16:15:11 -0500
This case describes the waste management industry and a clean technology solution for landfill diversion and renewable energy production. The (A) case focuses on the operational characteristics of waste management and waste to energy, as well as the characteristics of the waste management industry. The intent of the (A) case is to have students perform operational analysis on the organic waste to energy process to evaluate whether a potential new plant is economically feasible and attractive ...

Harvest: Organic Waste Recycling with Energy Recovery (B)
Date Posted:Sun, 18 Mar 2012 00:00:00 -0500
This case describes the waste management industry and a clean technology solution for landfill diversion and renewable energy production. The (A) case focuses on the operational characteristics of waste management and waste to energy, and the characteristics of the waste management industry. The intent of the (A) case is to have students perform operational analysis on the organic waste to energy process to evaluate whether a potential new plant is economically feasible and attractive. The (B) case focuses on the sourcing dilemma: pre-processing vs. source separation. To ensure that its waste input fuel is of sufficiently high quality (i.e., low level of inorganic contaminants), the company can either build a pre-processing facility to sort incoming waste to filter out contaminants, or work with suppliers to source separate their waste stream. Learning Objective: Illustrate the societal and operational challenges inherent in waste management. Provide framework to students for evaluating possible solutions.