Julie L. Swann

Coordination of Pricing and Inventory Decisions: A Survey and Classification

Recent years have seen scores of retail and manufacturing companies exploring innovative pricing strategies in an effort to improve their operations and ultimately the bottom line. Firms are employing such varied tools as dynamic pricing over time, target pricing to different classes of customers, or pricing to learn about customer demand. The benefits can be significant, including not only potential increases in profit, but also improvements such as reduction in demand or production variability, resulting in more efficient supply chains.

Simple Procedures for Selecting the Best Simulated System When the Number of Alternatives is Large

In this paper, we address the problem of finding the simulated system with the best (maximum or minimum) expected performance when the number of alternatives is finite, but large enough that ranking-and-selection (R&S) procedures may require too much computation to be practical. Our approach is to use the data provided by the first stage of sampling in an R&S procedure to screen out alternatives that are not competitive, and thereby avoid the (typically much larger) second-stage sample for these systems. Our procedures represent a compromise between standard R&S procedures--which are easy to implement, but can be computationally inefficient--and fully sequential procedures--which can be statistically efficient, but are more difficult to implement and depend on more restrictive assumptions. We present a general theory for constructing combined screening and indifference-zone selection procedures, several specific procedures and a portion of an extensive empirical evaluation.

Estimating Rates of New Root Caries in Older Adults

Although older adults are keeping their teeth longer, no national data are available on new caries in this age group. To characterize the extent of caries among older adults, we systematically reviewed studies on root caries incidence, increment, attack rate, and annual total (root + coronal) caries increment. We used a random-effects model to estimate annual summary measures and their 95% confidence intervals (CI) and tested for heterogeneity. For the 9 studies reporting root caries incidence, the summary measure equaled 23.7% (CI = 17.1–30.2%). For the 9 studies reporting root caries increment, the summary measure was 0.47 surfaces (CI = 0.34–0.61). For the 7 studies reporting total caries increment, the summary measure equaled 1.31 surfaces (95% CI = 1.01–1.61 surfaces). Because of heterogeneity, summary measures should be interpreted with caution. This research suggests, however, that older adults experience high rates of new caries and could benefit from caries-prevention programs.

Dynamic Pricing and the Direct-to-Customer Model in the Automotive Industry

The Internet is changing the automotive industry as the traditional manufacturer and dealer structure faces increased threats from third party e-tailers. Dynamic pricing together with the Direct-to-Customer business model can be used by manufacturers to respond to these challenges. Indeed, by coordinating production and inventory decisions with dynamic pricing, the automotive industry can increase profits and improve supply chain performance. To illustrate these benefits, we discuss a strategy that incorporates pricing, production scheduling, and inventory control under production capacity limits in a multi-period horizon. We show that under concave revenue curves, a greedy algorithm provides the optimal solution, and we describe extensions to the model such as multiple products sharing production capacity. Using computational analysis, we quantify the profit potential and sales variability due to dynamic pricing, and we suggest that it is possible to achieve significant benefit with few price changes.

New Coronal Caries in Older Adults: Implications for Prevention

To characterize the extent and severity of coronal caries among older US adults and document their need for prevention interventions, we systematically reviewed studies on coronal caries incidence, increment, and attack rate. We abstracted six studies and calculated summary measures using a random-effects model (95% confidence interval [95%CI]). We tested for heterogeneity and identified associated factors by examining the correlation between outcome measures and baseline population risk and study characteristics. We re-calculated summary measures after adjusting outcomes that netted out examiner reversals. Incidence and increment varied significantly by study. Adjusting studies for netting out examiner reversals reduced heterogeneity significantly. Annual attack rate among adjusted North American studies was 1.4 surfaces per 100 surfaces (95%CI = 1.0–1.9), or approximately 1 new carious surface per person per year. These rates are equal to or higher than those in children and indicate a need for caries-prevention services.

Evaluation of Telemedicine for Screening of Diabetic Retinopathy in the Veterans Health Administration

OBJECTIVEnTo explore the cost-effectiveness of telemedicine for the screening of diabetic retinopathy (DR) and identify changes within the demographics of a patient population after telemedicine implementation.nnnDESIGNnA retrospective medical chart review (cohort study) was conducted.nnnPARTICIPANTSnA total of 900 type 1 and type 2 diabetic patients enrolled in a medical system with a telemedicine screening program for DR.nnnMETHODSnThe cost-effectiveness of the DR telemedicine program was determined by using a finite-horizon, discrete time, discounted Markov decision process model populated by parameters and testing frequency obtained from patient records. The model estimated the progression of DR and determined average quality-adjusted life years (QALYs) saved and average additional cost incurred by the telemedicine screening program.nnnMAIN OUTCOME MEASURESnDiabetic retinopathy, macular edema, blindness, and associated QALYs.nnnRESULTSnThe results indicate that telemedicine screening is cost-effective for DR under most conditions. On average, it is cost-effective for patient populations of >3500, patients aged <80 years, and all racial groups. Observable trends were identified in the screening population since the implementation of telemedicine screening: the number of known DR cases has increased, the overall age of patients receiving screenings has decreased, the percentage of nonwhites receiving screenings has increased, the average number of miles traveled by a patient to receive a screening has decreased, and the teleretinal screening participation is increasing.nnnCONCLUSIONSnThe current teleretinal screening program is effective in terms of being cost-effective and increasing population reach. Future screening policies should give consideration to the age of patients receiving screenings and the systems patient pool size because our results indicate it is not cost-effective to screen patients aged older than 80 years or in populations with <3500 patients.

The Engineering and Science Issues Test (ESIT): A Discipline-Specific Approach to Assessing Moral Judgment

To assess ethics pedagogy in science and engineering, we developed a new tool called the Engineering and Science Issues Test (ESIT). ESIT measures moral judgment in a manner similar to the Defining Issues Test, second edition, but is built around technical dilemmas in science and engineering. We used a quasi-experimental approach with pre- and post-tests, and we compared the results to those of a control group with no overt ethics instruction. Our findings are that several (but not all) stand-alone classes showed a significant improvement compared to the control group when the metric includes multiple stages of moral development. We also found that the written test had a higher response rate and sensitivity to pedagogy than the electronic version. We do not find significant differences on pre-test scores with respect to age, education level, gender or political leanings, but we do on whether subjects were native English speakers. We did not find significant differences on pre-test scores based on whether subjects had previous ethics instruction; this could suggest a lack of a long-term effect from the instruction.

Pricing, Production, and Inventory Policies for Manufacturing with Stochastic Demand and Discretionary Sales

We study determining prices and production jointly in a multiple period horizon under a general, nonstationary stochastic demand function with a discrete menu of prices. We assume that the available production capacity is limited and that unmet demand is lost. We incorporate discretionary sales, when inventory may be set aside to satisfy future demand even if some present demand is lost. We analyze and compare partial planning or delayed strategies. In delayed strategies, one decision may be planned in advance, whereas a second decision is delayed until the beginning of each time period, after observing the results of previous decisions. For example, in delayed production (delayed pricing), pricing (production) is determined at the beginning of the horizon, and the production (pricing) decision is made at the beginning of each period before new customer orders are received. A special case is where a single price is chosen over the horizon. We describe policies and heuristics for the strategies based on deterministic approximations and analyze their performances. Computational analysis yields additional insights about the strategies, such as that delayed production is usually better than delayed pricing except sometimes when capacity is tight. On average, the delayed production (pricing) heuristic achieved 99.3 (99.8) of the corresponding optimal strategy.

Optimization of Community Health Center Locations and Service Offerings with Statistical Need Estimation

Community Health Centers (CHCs) provide family-oriented healthcare services for people living in rural and urban medically underserved communities; they are an important part of the governments plan to make healthcare more affordable. An optimization model is developed to determine the best location and number of new CHCs in a geographical network, as well as what services each CHC should offer at which capacity level. The weighted demand coverage of the needy population is maximized subject to budget and capacity constraints, where costs are fixed and variable. Statistical methods are applied to national health databases to determine important predictors of healthcare need and disease weights, and these methods are applied to census data to obtain county-based estimates of demand. Using several performance metrics such as the number of encounters, service of uninsured persons, and coverage of rural counties, the results of the system approach to location are analyzed using the state of Georgia as a prototype. It is demonstrated that optimizing the overall network can result in improvements of 20% in several measures. The proposed model is used to analyze policy questions such as how to serve the uninsured.

Policies utilizing tactical inventory for service-differentiated customers

We consider a manufacturer serving two customer classes where one wants the item immediately and the second receives a discount to accept a delay. We show that an (S,R,B) base-stock policy is optimal under differentiation and non-differentiation where S, R, and B are the order-up-to, reserve-up-to, and backlog-up-to amounts.