Category: Book Chapters

Pharmaceutical Supply Chains and Drug Shortages

By Hui Zhao📧

In Tutorials in Operations Research: Advancing the Frontiers of OR/MS: From Methodologies to Applications, 2023, 228–245. https://doi.org/10.1287/educ.2023.0258

Although the pharmaceutical industry is vital to the economy and the efficiency of pharmaceutical supply chains directly affects the quality and cost of patient care, pharmaceutical supply chains have been largely under-researched compared with the thriving research on medical services/hospital operations by the INFORMS community. At the same time, the pharmaceutical industry faces a unique economic and regulatory environment with many supply chain challenges. In this tutorial, I aim to provide a basic understanding of the complicated pharmaceutical supply chain and the challenges it faces. Using drug shortages (a persistent problem facing the pharmaceutical industry, government, and the society) and many other examples, I demonstrate that the richness and uniqueness of the pharmaceutical supply chains provide great opportunities for impactful research.

Keywords: Pharmaceutical supply chains; Drug shortages; Supply chain management; Public health

Chapter 27: Research Needs in Disaster Response Logistics

By J. Holguín-Veras, T. Encarnación, D. Ramirez-Rios, J. Amaya📧, and F. Aros-Vera

In Handbook of Research Methods for Supply Chain Management, 2022, 481–495. https://doi.org/10.4337/9781788975865.00036

This chapter defines the field of Disaster Response Logistics (DRL) and provides a comprehensive overview of the wide range of emergency functions that are performed as part of DRL. Using this classification of emergency functions, the authors identify the emergency functions where supply chain and operations management could play an important role. Then, the authors proceed to outline the corresponding research needs. The resulting set of research needs provide guidance to new entrants to disaster response logistics, and to individuals interested in exploring under-studied subjects, about areas where research is lacking.

Keywords: Humanitarian Logistics; Disaster Response Logistics

Input Uncertainty in Stochastic Simulation

By R. R. Barton📧, H. Lam, and E. Song

In The Palgrave Handbook of Operations Research, 2022, pp 573–620. https://doi.org/10.1007/978-3-030-96935-6_17

Stochastic simulation requires input probability distributions to model systems with random dynamic behavior. Given the input distributions, random behavior is simulated using Monte Carlo techniques. This randomness means that statistical characterizations of system behavior based on finite-length simulation runs have Monte Carlo error. Simulation output analysis and optimization methods that account for Monte Carlo error have been in place for many years. But there is a second source of uncertainty in characterizing system behavior that results from error in estimating the input probability distributions. When the input distributions represent real-world phenomena but are determined based on finite samples of real-world data, sampling error gives imperfect characterization of these distributions. This estimation error propagates to simulated system behavior causing what we call input uncertainty. This chapter summarizes the relatively recent development of methods for simulation output analysis and optimization that take both input uncertainty and Monte Carlo error into account.

Should an Analyst Share Calibration Information with Experts?

By Saurabh Bansal,📧 M. Sabbaghi, and R. Sharma

In Behavioral Decision Analysis, Springer International Series in Operations Research and Management Science, 2022 (Peer-reviewed/refereed).

Many times, expert judgment is used in a two-step procedure: (i) obtain judgments for calibration quantities for which true/empirical values are available to calibrate the expert’s judgmental errors, and then (ii) obtain judgments for focal
quantities (quantities of interest but without historical data), adjust them using the calibration information, and then use the adjusted judgments to assist decision making. In such situations, should a decision analyst share the calibration information with the expert before the expert provides judgments for focal quantities? We answer this question using laboratory experiments. We specifically investigate the role of task complexity, numeracy, and self-awareness on the use of calibration information by the expert. We find that: (a) Expert judgment tends to be of a worse quality as task complexity increases, (b) Calibration feedback does not improve managerial judgments in a less complex task, but it does reduce the bias and (especially) noise in a more complex task, (c) Numeracy does not impact the use of calibration information by experts regardless of task complexity, and (d) Individuals are able to directionally discern whether they are doing well in less complex tasks, but not in more complex tasks. As such these results suggest that when faced with complex tasks experts do benefit from receiving calibration information. However, this benefit comes at the expense of rendering this information inapplicable for the decision analyst to adjust the focal judgments provided by an expert. In contrast, experts do not benefit from receiving calibration information for simple tasks, allowing decision analysts to continue to use the calibration information to adjust managerial judgments.

Portfolio Management Issues in the Commercial Seed Industry: A Modeling Framework and Industry Implementation

By Saurabh Bansal,📧 and M. Nagarajan

In Agricultural Supply Chain Management Research. Springer Series in Supply Chain Management, vol 12, pp 53–67, 2022 (Peer-reviewed/refereed). https://doi.org/10.1007/978-3-030-81423-6_4

In this chapter we first introduce the commercial seed business in the continental USA. Subsequently, we discuss the problem formulation and solution for a firm that offers a portfolio of hybrid seed corn in the market and seeks to optimize the acreage for each hybrid. We also discuss implementation of the solution developed at the firm. As such, this chapter highlights contextual factors that make the production planning problems in the agribusiness unique and in need for customized solutions.

Keywords: Agriculture; Random yield; Operational flexibility

Compliance as Operations Management

By S. Alizamir, S. Kim, and S. Muthulignam📧

In The Cambridge Handbook of Compliance, 2021:12 (Peer-reviewed/refereed). https://doi.org/10.1017/9781108759458.007

In this chapter we review the body of operations management (OM) literature that studies compliance issues. Researchers in OM focus on how operational-level decisions (such as process improvement, capacity, quality, and risk mitigation) impact performance outcomes in business and society. In recent years there has been growing interest among OM scholars in compliance issues, mostly in the context of environmental regulation and corporate social responsibility (CSR). The focus on operations casts new light and brings novel insights to compliance issues, and in some cases provides guidance for implementable solutions.

The Fulfillment-Optimization Problem

By M. Acimovic📧 and V. F. Farias

In INFORMS TutORials in Operations Research. Operations Research and Management Science in the Age of Analytics, 2019, 218–237 (Invited. Peer-reviewed/refereed). https://doi.org/10.1287/educ.2019.0199

This tutorial studies the fulfillment-optimization problem, a key optimization problem facing retailers that fulfill online customer orders using inventory that might be distributed across multiple supply nodes, which for omnichannel retailers may include the entire store network in addition to distribution centers. This tutorial formulates and studies the fulfillment optimization problem as an online optimization problem. The first approach we study to solving this problem is similar in spirit to linear programming–based bid price approaches to network revenue management. The second approach relies on an algorithm based on the primal-dual schema. The approaches are complementary; the former is suitable in a regime where the demand for products is relatively predictable, whereas the latter is applicable to settings where such predictability is not available. In both cases we describe the practical impact of these solutions at real-world retailers. Finally, we discuss outstanding unsolved problems in the area that we believe can have significant impact on practice.

Keywords: Online retailing; Omnichannel retailing; Fulfillment optimization; Inventory control; Heuristics

Forecast Decisions

By P. Goodwin, B. B. Moritz📧, and E. Siemsen, E.

In The Handbook of Behavioral Operations Management, 2018, 433–458 (Invited. Peer-reviewed/refereed). https://doi.org/10.1002/9781119138341.ch12

The Handbook of Behavioral Operations offers a comprehensive resource that fills the gap in the behavioral operations management literature. This vital text highlights best practices in behavioral operations research and identifies the most current research directions and their applications. A volume in the Wiley Series in Operations Research and Management Science, this book contains contributions from an international panel of scholars from a wide variety of backgrounds who are conducting behavioral research. The handbook provides succinct tutorials on common methods used to conduct behavioral research, serves as a resource for current topics in behavioral operations research, and as a guide to the use of new research methods. The authors review the fundamental theories and offer frameworks from a psychological, systems dynamics, and behavioral economic standpoint. They provide a crucial grounding for behavioral operations as well as an entry point for new areas of behavioral research. The handbook also presents a variety of behavioral operations applications that focus on specific areas of study and includes a survey of current and future research needs.

Healthcare Supply Chains

By S.-H. Cho and H. Zhao📧

In Handbook of Healthcare Analytics: Theoretical Minimum for Conducting 21st Century Research on Healthcare Operations, Chapter 8, 2018 (Invited. Peer-reviewed/refereed). https://doi.org/10.1002/9781119300977.ch8

Healthcare supply chains are usually long and complex, involving many parties and unique intermediaries, such as a Group Purchasing Organization (GPO), as well as very different products, such as brand and generic products. This chapter presents an extensive review of past research efforts in healthcare supply chains and provides two particular examples. The first example studies the redesign of drug purchasing contracts for generic injectables to mitigate drug shortages. The second example studies the redesign of supply contracts for influenza vaccines to address a mismatch between supply and demand. The chapter presents the models of supply chains for generic injectable drugs and for influenza vaccines, respectively, and characterizes the performance of various supply contracts. It reviews the broad literature on healthcare supply chains, and discusses promising future work and directions. The chapter focuses on ample future research opportunities in healthcare and pharmaceutical supply chains.

Keywords: Direct shipment model; Generic injectable drug supply chain; Group purchasing organization; Healthcare supply chains; Influenza vaccine supply chain; Pharmaceutical supply chains; Supply chain management literature; Supply contracts

Managing Product Returns in Retailing

By J. Petersen and A. Alptekinoglu📧

In Handbook of Research on Retailing, 2018, Chapter 10: 220–233 (Invited. Peer-reviewed/refereed). https://doi.org/10.4337/9781786430281.00019

Product returns continue to challenge retailers, especially as retail channels and product variety proliferate. The purpose of this chapter is to first highlight the ongoing research on product returns in both the marketing and supply chain/operations areas in an effort to encourage more research that has the potential to span boundaries across these two areas. Further, the goal is to highlight some of the new product return-related developments in retailing that are attempting to solve the ongoing challenge of better managing customer product return behavior to maximize customer profitability. Specifically, the authors pose several still unanswered research questions to inspire ongoing research on product returns across the marketing and supply chain/operations areas.