4 Presentations

• 
  10:30 AM - 10:55 AM

  Analyzing the Effect of Demand Heterogeneity on the Competition for Price and Location in a Duopoly Market: A Game Theoretical Approach.

  • Asvadi Saman, presenter, John Molson School of Business
  • Satyaveer Chauhan, John Molson School of Business

  In this paper, we study the effect of heterogeneity of customers on the joint decision about location and pricing strategies for two retailers in a market. We consider two classes of customers: Customers with a high willingness to pay for the product, and customers with a low willingness to pay for the same product. Our analysis shows that the heterogeneity of the market affects the optimal pricing and location decisions of the two customers. We show that the way that the two classes of customers are distributed in the market has a significant effect on the location and price decisions of the retailers, as well as on the profit they make. Also, our analysis indicated that whether the two retailers decide simultaneously, or enter the market one at a time, affects the location they choose and the price they offer. Mathematical and numerical analysis show how the optimal decisions are related to different parameters of the problem, namely the reservation price for each customer class, the travelling cost, the dimensions of the demand market, and the distribution of the two customer classes along the demand market. The results of our study guides retailers and supply chain practitioners to choose class/classes of customers to serve in various situations, to maximize their profit.
• 
  10:55 AM - 11:20 AM

  Cost-sharing and revenue-sharing contracts for collaborative quality improvement in a supply chain with product recall

  • Amirhossein Jafarzadeh Ghazi, presenter, PhD student
  • Nader Azad, Assistant Professor of Operations Management, Faculty of Business and IT, Ontario Tech University
  • Salma Karray, University of Ontario Institute of Technology

  Quality-related product recalls can be arduous incidents for the entire supply chain. Considering the rising cost of quality, a manufacturer and a retailer may adopt collaborative quality improvement strategies to enhance the performance of a supply chain with a risk of a product recall. We develop a manufacturer-Stackelberg game model and investigate whether cost or revenue-sharing contracts can benefit the supply chain with recall. We also examine the impact of bargaining on designing a collaborative agreement. We find that revenue and cost-sharing contracts can improve product quality, recall probability, and the manufacturer’s and retailer’s profits compared to a non-collaborative contract. Furthermore, a revenue-sharing through bargaining contract is best-off in terms of improving quality, recall probability, and the manufacturer’s profit. However, the retailer is best-off under a typical revenue-sharing contract. In addition, under revenue-sharing contracts, product discontinuation and the manufacturer’s bankruptcy incidents are less likely.
• 
  11:20 AM - 11:45 AM

  Efficiency Analysis of Multiple Groups of Decision-Making Units

  • Jafar Sadeghi, presenter, Western University
  • Fredrik Odegaard, Western University
  • Mehmet A. Begen, Western University

  In applications of Data Envelopment Analysis (DEA), it is common to put Decision-Making Units (DMUs) into multiple groups for flexibility in meeting their requirements and environmental constraints. However, the literature lacks a satisfactory and rigorous method for measuring the efficiency of such groups. We propose a new approach to analyze groups efficiencies both with and without reallocation of resources. Additionally, we develop dual formulations with meaningful interpretations.
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  11:45 AM - 12:10 PM

  A mutual catastrophe insurance framework for horizontal collaboration in the prepositioning of strategic reserves

  • Hani Zbib, presenter, ESG - UQAM
  • Burcu Balcik, Ozyegin University
  • Marie-Eve Rancourt, HEC Montréal
  • Gilbert Laporte, HEC Montréal

  Horizontal collaboration in humanitarian logistics can be highly beneficial through pooling and sharing resources, but it can be costly and difficult to create and operate. Moreover, communities may lack funds to establish it and often depend on donors for the initial investment. Integrating the logistical and financial functions within a catastrophic risk management framework addresses these challenges. The role of the framework is to determine how to integrate these functions together, how to pool risk jointly, and what are the most effective cost and benefit sharing mechanisms.

  In this talk, we present how the catastrophe insurance literature, rich in sharing mechanisms, can be integrated in a framework for horizontal collaboration in the prepositioning of strategic reserves. The framework consists of an umbrella insurer offering multi-year insurance contracts to a portfolio of policyholders. It encompasses four components: prepositioning network design, providing insurance coverage from the prepositioning network, managing the insurer's capital, and allocating premiums to policyholders.

  To that end, we compare three contract types: mutual insurance contracts with full coverage to policyholders; service-level based insurance contracts with a probability of ruin for the insurer; and mutual insurance contracts with full coverage and an integrated vertical collaboration with suppliers through reinsurance-based supply contracts.