Sriram Dasu

Batching and Scheduling Jobs on Batch and Discrete Processors

We consider a situation in which the manufacturing system is equipped with batch and discrete processors. Each batch processor can process a batch limited number of jobs simultaneously. Once the process begins, no job can be released from the batch processor until the entire batch is processed. In this paper, we analyze a class of two-machine batching and scheduling problems in which the batch processor plays an important role. Specifically, we consider two performance measures: the makespan and the sum of job completion times. We analyze the complexity of this class of problems, present polynomial procedures for some problems, propose a heuristic, and establish an upper bound on the worst case performance ratio of the heuristic for the NP-complete problem. In addition, we extend our analysis to the case of multiple families and to the case of three-machine batching.

Human issues in service design

Abstract A heightened awareness of the fundamental behavioral science principles underlying human interactions can be translated directly into service design. Service encounter design can be approached with the same depth and rigor found in goods production. Service encounters can be designed to enhance the customer’s experience during the process and their recollection of the process after it is completed. This paper summarizes the key concepts from a panel discussion at the DSI National Meeting in Orlando in November 2000. The panel brought together a number of leading academic researchers to investigate current research questions relating to the human side of the design, development and deployment of new service technologies. Human issues from the customer and service provider vantage are illustrated and challenges to researchers for exploring this perspective are presented.

Ordering policies in an environment of stochastic yields and substitutable demands

In this paper, we model production problems where yields are stochastic, demands are substitutable, and several items are jointly produced. We formulate this problem as a profit maximizing convex program, and study two approximation procedures. The first method solves finite horizon stochastic programs on a rolling horizon basis. We develop a decomposition algorithm for solving the finite horizon problems. The finite horizon problems are linear programs. Our algorithm utilizes the network-like structure of the coefficient matrix of the linear programs. The second method is a heuristic procedure that is based on the structure of the optimal policy for two-period problems. The heuristic parallels the decision rules used by managers in practice. The computational results suggest that the performance of this heuristic is comparable to that of the rolling horizon approach.

A review of open queueing network models of manufacturing systems

In this paper we review open queueing network models of manufacturing systems. The paper consists of two parts. In the first part we discuss design and planning problems arising in manufacturing. In doing so we focus on those problems that are best addressed by queueing network models. In the second part of the paper we describe developments in queueing network methodology. We are primarily concerned with features such as general service times, deterministic product routings, and machine failures — features that are prevalent in manufacturing settings. Since these features have eluded exact analysis, approximation procedures have been proposed. In the second part of this paper we review the developments in approximation procedures and highlight the assumptions that underlie these approaches.

Dynamic pricing when consumers are strategic: Analysis of posted and contingent pricing schemes

We study dynamic pricing policies for a monopolist selling perishable products over a finite time horizon to strategic buyers. Buyers are strategic in the sense that they anticipate the firms price policies. It is expensive and administratively difficult for most brick and mortar retailers to change prices, placing limits on the number of price changes and the types of pricing policies they can adopt. The simplest policy is to commit to a set of price changes. A more complex alternative is to let the price depend on sales history. We investigate two pricing schemes that we call posted and contingent pricing. Using the posted pricing scheme, the firm announces a set of prices at the beginning of the horizon. In the contingent pricing scheme, price evolution depends upon demand realization. Our focus is on the posted pricing scheme because of its ease of implementation. Counter to intuition, we find that neither a posted pricing scheme nor a contingent pricing scheme is dominant and the difference in expected revenues of these two schemes is small. Limiting the number of price changes will result in a decrease in expected revenues. We show that a multi-unit auction with a reservation price provides an upper bound for expected revenues for both pricing schemes. Numerical examples suggest that a posted pricing scheme with two or three price changes is enough to achieve revenues that are close to the upper bound. Dynamic pricing is only useful when strategic buyers perceive scarcity. We study the impact of scarcity and derive the optimal stocking levels for large markets. Finally, we investigate whether or not it is optimal for the seller to conceal inventory or sales information from buyers. A firm benefits if it does not reveal the number of units it has available for sale at the beginning of the season, or subsequently withholds information about the number of units sold.

Psychology of the Experience: The Missing Link in Service Science

For service science to be a complete discipline it must address how customers experience services with the same depth of analysis as it studies the analytics of information and physical flow processes that deliver the service. In this paper we identify topics and insights drawn from the behavioral sciences that can be used to provide the initial underpinnings of the psychological side of service science. We also propose an agenda for research and education in the area.

Approximating nonrenewal processes by Markov chains: use of Super-Erlang (SE) chains

We study a class of point processes generated by transitions in Markov chains. We are primarily concerned with approximating superposed phase renewal processes by these point processes. We identify a subclass of Markov chains that we call Super-Erlang chains. These chains have special properties that facilitate the development of approximations. We outline an approximation procedure and provide computational results that demonstrate the potential of the approach. The primary motivation for this study is the analysis of open queueing networks.

Analysis of the ΣPhi/Ph/1 Queue

In this paper, we analyze a queue to which the arrival process is the superposition of separate arrival streams, each of whose interarrival time distributions is of phase type, and the service time distribution is also of phase type. The performance measures derived for this queue include: the distribution of the number in the system as seen by each customer class upon arrival, Laplace-Stieltjes transform LST of the waiting-time distribution for each customer class, stationary interdeparture time distribution and the lag correlation coefficients of the departure process, and characteristics of the tails of the waiting time and queue length distributions.

Beyond price mechanisms: How much can service help manage the competition from gray markets?

Companies operating global supply chains in various industries struggle with parallel importers diverting goods from authorized channels to gray markets. While the existing gray market literature mainly focuses on pricing, in this paper we develop a model to examine the role of demand enhancing services as non-price mechanisms for coping with gray markets. We consider a manufacturer that sells a product in two markets and a parallel importer that transfers the product from the low-price market to the high-price market and competes with the manufacturer on price and service. We show that parallel importation forces the manufacturer to provide more service in both markets. We explore the value of service and the effects of competition intensity and market responsiveness to service on the manufacturer’s policy. We find that a little service can go a long way in boosting the profit of the manufacturer. Investing in service enables the manufacturer to differentiate herself from the parallel importer and to achieve the ideal price discrimination. In addition, service increases the value of strategic price discrimination when facing parallel importation. We also analyze the case when the manufacturer sells through a retailer in the high price market and can delegate service provision to the retailer or provide service herself. We find that delegating service to the retailer reduces double marginalization and can simultaneously benefit the manufacturer and the retailer, even if the retailer is not as efficient as the manufacturer.

Experience psychology – a proposed new subfield of service management

Purpose – In their seminal book, The Experience Economy, Pine and Gilmore point out that customers buy experiences and are willing to pay a steep premium for them and hence service organizations should try to make them more fun. The purpose of this paper (and the premise of the recent book) is that services can be redesigned using psychological principles to deliver positive experiences for any kind of service, not just those that lend themselves to fun; by definition, satisfaction with a subconscious aspect of a service cannot be explained by the customer; and the psychological aspects of service interactions have to be approached with the same level of rigor as that are used to design processes that deliver the technical features of the service. Design/methodology/approach – A point of view on the gap and opportunities in the field. Findings – The authors show that there is an opportunity to extend the service operations field. Practical implications – Enables managers and researchers to think about new...