Supply Diagnostic Incentives under Endogenous Information Asymmetry
Authors: Mohammad E. Nikoofal, Mehmet Gumus
Publication: Production and Operations Management, Forthcoming
Abstract:
This paper develops a dyadic supply chain model with one buyer who contracts the manufacturing of a new product to a supplier. Due to the lack of experience in manufacturing, the extent of supply risk is unknown to both the buyer and supplier before the time of contract. However, after the contract is accepted, the supplier may invest in a diagnostic test to acquire information about his true reliability, and use this information when deciding on a process improvement effort. Using this setting, we identify both operational and strategic benefits and costs of diagnostic test. Operationally, it helps the supplier to take the first-best level of improvement effort, which would increase efficiency of the total supply chain. Strategically, it enables the buyer to reduce the agency costs associated with implementing process improvement on the supplier. Besides these benefits, diagnostic test increases the degree of information asymmetry along the supply chain. This in turn provides the supplier with proprietary information, whose rent would be demanded from the buyer in equilibrium. Benefit-cost analysis reveals two key factors in determining the value of diagnostic test: (i) degree of endogenous information asymmetry between supply chain firms, and (ii) the relative cost of diagnostic test with respect to process improvement cost. Our results indicate that when both are high, the mere presence of diagnostic test can result in less reliable supply chain. This implies that when incentives are not properly aligned, information asymmetry amplified due to diagnostic test neutralizes all its benefits.
Designing Risk-Adjusted Therapy for Patients with Hypertension
Authors: Manaf Zargoush, Mehmet Gumus, Vedat Verter, Stella Daskalopoulou
Journal Name: Production and Operations Management, Forthcoming
Abstract:
Hypertension has not been well studied by operations researchers from a clinical decision support perspective. Moreover, little personalized (i.e. patient-centric) guidance is available regarding the number and combination of antihypertensive medications. To fill this gap, we develop a Markov Decision Process (MDP) to characterize the optimal sequence (and combination) of antihypertensive medications under the standard medication dose. Our model is patient-centric as it takes into account a set of relevant patient characteristics such as age, gender, blood pressure level, smoking habits, diabetes status, and cholesterol level. Based on a set of intuitive assumptions, we prove that our model yields a series of structured optimal policies. Having calibrated our model based on real data and medical literature, we analyze these optimal policies and discuss their insights to the real practice. We also compare the benefits, in terms of quality adjusted life expectancy, QALE, obtained from our results with those obtained from British Hypertension Society (BHS) guideline.
Quality at the Source or at the End? Managing Supplier Quality Under Information Asymmetry
Authors: Mohammad E. Nikoofal, Mehmet Gümüş
Publication: Manufacturing & Service Operations Management, Forthcoming
Abstract:
Supply-Side Story: Risks, Guarantees, Competition, and Information Asymmetry
Authors: Gümüş, M., Gurnani, H., and Ray, S.
Publication: Management Science
The Impact of Product Substitution and Retail Capacity on the Timing and Depth of Price Promotions: Theory and Evidence
Authors: Gumus, M., Kaminsky, P., and Mathur, S.
Publication: International Journal of Production Research
Joint procurement and demand-side bidding strategies under price volatility
Authors: Nie, X., Boyacı, T., Gümüş, M., Ray, S., Zhang, D. Publication: Annals of Operations ResearchAbstract
United We Stand, Divided We Fall: Strategic Supplier Alliances Under Default Risk
Authors: Xiao Huang, Tamer Boyaci, Mehmet Gumus, Saibal Ray and Dan Zhang
Publication: Management Science
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On the Value of Terrorist's Private Information in Government's Defensive Resource Allocation Problem
Authors: Mohammad E. Nikoofal & Mehmet Gumus
Publication: IIE Transactions
Abstract:
"With or Without Forecast Sharing: Competition and Credibility under Information Asymmetry," Production and Operations Management
Author: Mehmet Gumus
Publication: Production and Operations Management
Abstract:
"Returns Policies Between Channel Partners for Durable Products," Marketing Science
Authors: Gumus, Mehmet; Ray, Saibal; Yin, Shuya
Publication: Marketing Science
Abstract:
"Shipping Fees or Shipping Free? A Tale of Two Price Partitioning Strategies in Online Retailing," Production and Operations Management
Authors: Gumus, Mehmet; Li, Shanling; Oh, Wonseok; Ray, Saibal
Publication: Production and Operations Management, July 2013
Abstract:
Supply-side story: Risks, guarantees, competition, and information asymmetry
Authors: Gumus, Mehmet; Ray, Saibal; Gurnani, Haresh
Abstract: