M&SOM Review

As we move into the second decade of the 21st century, the public is more convinced than ever that the US healthcare system suffers from an obsession with medical tests and procedures. The Institute of Medicine estimated up to $765 billion per year, or 6 percent of the nation’s GDP, is spent on low-value tests and treatments. In the case of medical testing, various studies estimate as much as 30 percent of it is not cost effective, a phenomenon commonly referred to as overtesting.

View Full Post »

Standby upgrades are an innovative revenue management practice that has recently been adopted by many hotel chains, where guests are offered a premium room upgrade at a discounted price after they reserve a standard room, and only charged for the upgrade if the premium room is available upon their arrival to the hotel. This program is marketed as being beneficial for the hotel by monetizing premium room inventory that may otherwise go unused, creating awareness for room features such as city/ocean view, and improving guest satisfaction and loyalty.

View Full Post »

Setting an appropriate inventory service level is critical and requires balancing the costs of holding too much inventory against the costs of holding too little. One key factor in determining service level is customers’ responses to product unavailability. Will customers shift their demand to other firms, change their willingness to pay, or respond in some other fashion? Researchers have explored the relationship between service level and demand in business-to-consumer (B2C) contexts both analytically and empirically. But, what about the relationship between service levels and demand upstream, in a business-to-business (B2B) context? Do retail buyers—individuals who work for the retailer and procure on behalf of end consumers—respond to changes in service level in a similar way?

View Full Post »

The U.S. electric car manufacturer Tesla, and its rockstar CEO Elon Musk, are never short of surprises. In June 2014, Elon, in broken English (a reference to an Internet meme), announced that “all our patents are belong to you,” opening up all of Tesla’s patents to anyone who wants to use them “in good faith.” This announcement ignited the Internet. Some praised Elon’s altruism and open-source spirit. Others viewed it as a publicity stunt, believing that the real secret recipe was never patented (just like Coca-Cola). Elon’s own words, “the world would all benefit from a common, rapidly evolving technology platform,” hinted that he was not entirely altruistic, and wanted to promote the electric vehicle technology.

View Full Post »

For customers of retail products, returning an unwanted purchase has never been easier. “Your feedback is helping us build Earth’s Most Customer-Centric Company,” ends an email from a customer service representative at a major online retailer to a product return request recently submitted by one of the authors. Slogans like “Unconditional return within 30 days,” “Money back guarantee within 60 days,” “100% refund if you’re not satisfied,” have become the gold standard in modern marketing regardless of the product, industry, or sales channel. One reason behind this shift is that lenient return policies give important advantages to original equipment manufacturers (OEMs) by signaling quality, improving brand image, and, hopefully, leading to growth in revenues and profit.

View Full Post »

Imagine you are a branch manager for a nationwide retail bank. A major competitor has just opened its newest location, and it is right next-door to yours. The competitor offers better service quality than your branch does but worse rates. How should you respond? Do nothing? Cut rates? Improve service? How should your response differ if the competitor offers better rates but worse quality?

View Full Post »

As consumers become increasingly aware of the conveniences of online shopping, their purchasing behavior becomes more complex. Not only do shoppers compare prices at competing online retailers in real time, they also take into account various factors such as the possibility of future discounts, stock levels, and retailers’ return policies. Consequently, a costly behavioral phenomenon arises for online retailers: online shoppers’ propensity to strategically defer purchases until prices drop.

View Full Post »

The steel industry is one of the largest industrial energy consumers and one of the largest contributors to greenhouse gas and air pollution. Consequently, for most steel companies, improving energy utilization and reducing environmental impact become equally important as improving productivity and profitability. Iron and steel production is a complicated multistage process that mainly consists of iron making, steel making, and hot rolling and cold rolling stages, where the cold rolling stage consists of pickling, rolling, batch annealing, temper rolling, and some post-treatment steps. Batch annealing is a key operation which can improve the mechanical properties of cold rolled products. However, annealing is also a main energy-consuming operation in the cold rolling stage; it consumes a huge amount of energy and resources, such as water, electricity, and coal gas and protective gas. Thus, the batch annealing process is one of the bottlenecks at most steel plants, and improving its efficiency becomes crucial to increase a steel company’s profitability and energy utilization.

View Full Post »

In the past 25 years, demand for emergency healthcare in the United States has exploded, pushing capacity-strained emergency departments across the country to the limit and prompting organizations from the National Academy of Medicine to the General Accounting Office to label the American emergency care system “in crisis.”

View Full Post »