The problem of locating flow-intercepting facilities on a network with probabilistic customer flo... more The problem of locating flow-intercepting facilities on a network with probabilistic customer flows and with facility set-up costs is studied in this paper. Two types of models are investigated, namely the double-counting model and the no-double-counting model (double-counting refers to ...
This paper shows that operational flexibility interacting with informational uncertainty may lead... more This paper shows that operational flexibility interacting with informational uncertainty may lead to truthful information exchange in equilibrium even when the communication is nonbinding and unverifiable, i.e., “cheap talk.” We consider a model consisting of a manufacturer releasing a new product with uncertain release date and demand, and a retailer who must determine the allocation of limited capacity between a preexisting third-party product and the manufacturer’s new product that may or may not be released on time. The manufacturer has a private forecast about the likelihood of the product release and/or about the demand, which he shares (either truthfully or not) with the retailer. We show that under the “traditional” supply chain structure (one-time opportunity to order) no truthful equilibrium can emerge. However, if (1) the supply chain structure allows for postponement, i.e., the ability to delay orders at a certain cost by the retailer, and (2) the manufacturer has informational uncertainty about the retailer’s capacity, then truthful information exchange may emerge in equilibrium, where the manufacturer transmits his true forecast and the retailer treats the transmission as truthful. The genesis of this effect is preference reversal, where the manufacturer is not sure which way to distort the forecast to best motivate the retailer to wait for the new product. Thus, we show that a truth-revealing mechanism can emerge from a relatively rich setup featuring two-sided information asymmetry interacting with postponement. This paper was accepted by Gad Allon, operations management.
International Regional Science Review, Mar 21, 2014
Spatial planners often make “comprehensive” decisions on the location of public service facilitie... more Spatial planners often make “comprehensive” decisions on the location of public service facilities by using the concept of urban hierarchy: population centers at the upper level of the hierarchy (typically large cities) get the highest level facilities, such as specialized hospitals and universities, while the centers at the lower levels of hierarchy get lower-level facilities. Intuitively, this suggests that there should be a link between urban hierarchy designations and population dynamics in future periods. This link must be taken into account in planning decisions, as it suggests that today’s decisions affect tomorrow’s demand for services. Indeed, this link was assumed in a previously published planning model. Yet, no direct evidence of such a link appears in the literature. The primary goal of this article is to fill this gap by using the census data for Portugal for the period 1991–2001 and the changes in the urban hierarchy that were implemented during 1980s and early 1990s. While our results support the link between urban hierarchy designations and population dynamics that has been assumed in previously published work, the mechanism describing this link appears to be somewhat different from the one postulated previously. Several extensions and directions for future work are also discussed.
Flow-intercepting facilities are facilities such as gas stations and advertising billboards, whic... more Flow-intercepting facilities are facilities such as gas stations and advertising billboards, which provide “service” to passing-by customer flows. Customers that pass by such facilities are said to be intercepted. A typical objective in locating these facilities is the maximization of the total customer flow intercepted. We consider two new models for locating flow-intercepting facilities on a network. Both models use only information on the fraction of customers travelling from any node to any adjacent nodes and the fraction of customers that start their travel at any given node. This information is more practical to obtain than the complete path flow information required by existing models. The trade-off for using this reduced data set is the loss of equivalence with the path-flow based models. However, a set of computational experiments shows that the proposed models can be regarded as an approximation of the existing ones. In the first model, repeat visits by a customer to the facilities (e.g., billbo...
In this paper, we analyze how well a machine can solve a general problem in queueing theory. To a... more In this paper, we analyze how well a machine can solve a general problem in queueing theory. To answer this question, we use a deep learning model to predict the stationary queue-length distribution of an $M/G/1$ queue (Poisson arrivals, general service times, one server). To the best of our knowledge, this is the first time a machine learning model is applied to a general queueing theory problem. We chose $M/G/1$ queue for this paper because it lies "on the cusp" of the analytical frontier: on the one hand exact solution for this model is available, which is both computationally and mathematically complex. On the other hand, the problem (specifically the service time distribution) is general. This allows us to compare the accuracy and efficiency of the deep learning approach to the analytical solutions. The two key challenges in applying machine learning to this problem are (1) generating a diverse set of training examples that provide a good representation of a "gen...
The problem of locating flow-intercepting facilities on a network with probabilistic customer flo... more The problem of locating flow-intercepting facilities on a network with probabilistic customer flows and with facility set-up costs is studied in this paper. Two types of models are investigated, namely the double-counting model and the no-double-counting model (double-counting refers to ...
This paper shows that operational flexibility interacting with informational uncertainty may lead... more This paper shows that operational flexibility interacting with informational uncertainty may lead to truthful information exchange in equilibrium even when the communication is nonbinding and unverifiable, i.e., “cheap talk.” We consider a model consisting of a manufacturer releasing a new product with uncertain release date and demand, and a retailer who must determine the allocation of limited capacity between a preexisting third-party product and the manufacturer’s new product that may or may not be released on time. The manufacturer has a private forecast about the likelihood of the product release and/or about the demand, which he shares (either truthfully or not) with the retailer. We show that under the “traditional” supply chain structure (one-time opportunity to order) no truthful equilibrium can emerge. However, if (1) the supply chain structure allows for postponement, i.e., the ability to delay orders at a certain cost by the retailer, and (2) the manufacturer has informational uncertainty about the retailer’s capacity, then truthful information exchange may emerge in equilibrium, where the manufacturer transmits his true forecast and the retailer treats the transmission as truthful. The genesis of this effect is preference reversal, where the manufacturer is not sure which way to distort the forecast to best motivate the retailer to wait for the new product. Thus, we show that a truth-revealing mechanism can emerge from a relatively rich setup featuring two-sided information asymmetry interacting with postponement. This paper was accepted by Gad Allon, operations management.
International Regional Science Review, Mar 21, 2014
Spatial planners often make “comprehensive” decisions on the location of public service facilitie... more Spatial planners often make “comprehensive” decisions on the location of public service facilities by using the concept of urban hierarchy: population centers at the upper level of the hierarchy (typically large cities) get the highest level facilities, such as specialized hospitals and universities, while the centers at the lower levels of hierarchy get lower-level facilities. Intuitively, this suggests that there should be a link between urban hierarchy designations and population dynamics in future periods. This link must be taken into account in planning decisions, as it suggests that today’s decisions affect tomorrow’s demand for services. Indeed, this link was assumed in a previously published planning model. Yet, no direct evidence of such a link appears in the literature. The primary goal of this article is to fill this gap by using the census data for Portugal for the period 1991–2001 and the changes in the urban hierarchy that were implemented during 1980s and early 1990s. While our results support the link between urban hierarchy designations and population dynamics that has been assumed in previously published work, the mechanism describing this link appears to be somewhat different from the one postulated previously. Several extensions and directions for future work are also discussed.
Flow-intercepting facilities are facilities such as gas stations and advertising billboards, whic... more Flow-intercepting facilities are facilities such as gas stations and advertising billboards, which provide “service” to passing-by customer flows. Customers that pass by such facilities are said to be intercepted. A typical objective in locating these facilities is the maximization of the total customer flow intercepted. We consider two new models for locating flow-intercepting facilities on a network. Both models use only information on the fraction of customers travelling from any node to any adjacent nodes and the fraction of customers that start their travel at any given node. This information is more practical to obtain than the complete path flow information required by existing models. The trade-off for using this reduced data set is the loss of equivalence with the path-flow based models. However, a set of computational experiments shows that the proposed models can be regarded as an approximation of the existing ones. In the first model, repeat visits by a customer to the facilities (e.g., billbo...
In this paper, we analyze how well a machine can solve a general problem in queueing theory. To a... more In this paper, we analyze how well a machine can solve a general problem in queueing theory. To answer this question, we use a deep learning model to predict the stationary queue-length distribution of an $M/G/1$ queue (Poisson arrivals, general service times, one server). To the best of our knowledge, this is the first time a machine learning model is applied to a general queueing theory problem. We chose $M/G/1$ queue for this paper because it lies "on the cusp" of the analytical frontier: on the one hand exact solution for this model is available, which is both computationally and mathematically complex. On the other hand, the problem (specifically the service time distribution) is general. This allows us to compare the accuracy and efficiency of the deep learning approach to the analytical solutions. The two key challenges in applying machine learning to this problem are (1) generating a diverse set of training examples that provide a good representation of a "gen...
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