Conversations with Supply Chain Managers

This paper documents the process of supply chain formation to bring a new product to market, based on phone and personal interviews with supply chain professionals and consultants from a range of industries including but not restricted to high tech, consumer products and services, entertainment, food, furniture, family and entertainment, consulting and other b-to-b services, automotive, and large complex engineered products. Most of these interviews were conducted between September 2009 and January 2010, but some earlier interactions have been incorporated as appropriate. Potentially identifying information has been removed to preserve anonymity, which was promised to the respondents.http://deepblue.lib.umich.edu/bitstream/2027.42/76027/1/1145_Lovejoy.pd

Bargaining Chains (Long Version)

We consider a firm that designs a new product and wishes to bring it to market, but does not have ownership or control over all of the resources required to make that happen. The firm must select and contract with one of several possible tier 1 suppliers for necessary inputs, who do the same with their (tier 2) suppliers, etc. This general situation is common in industry. We assume tier-wise negotiations, sole sourcing within each tier, complete local information, and horizontal competition. We develop a bargaining-based solution to the negotiations between two adjacent multi-firm tiers and show its consistency with familiar solution concepts from the theories of bargaining and cooperative games. We then link up multiple bargaining modules to generate chain-wide predictions for efficiency and profitability in supply chains with an arbitrary number of tiers and an arbitrary number of firms per tier. We investigate the implications of the results for investments in process improvements or supplier development.http://deepblue.lib.umich.edu/bitstream/2027.42/76028/1/1146_Lovejoy.pd

Efficient Structures for Innovative Social Networks

What lines of communication among members of an organization are most effective in the early, ideation phase of innovation? We investigate this question with a recombination and selection model of knowledge transfer operating through a social network. We measure cost in human time, and seek efficient social network structures in the time--total cost plane (minimize ideation time subject to an upper bound on total cost, or vice versa) and in the time--cost per period plane, with a similar interpretation. Our results suggest that efficiently innovative organizations look nothing like what one intuitively associates with standard formal organizations with strict and unchanging lines of communication, nor do they conform with what one might expect from static social network representations of communication patterns. Rather, ideation is accelerated when people dynamically churn through a large (ideally the entire population) set of conversational partners over time, which naturally begets short path lengths and eliminates information bottlenecks. In organizations with these features group meetings do not help and can hurt the process, because many parallel conversations can achieve the same or better results as one-to-many communications. A family of networks called the complete wheel-stars emerges as an important family on the time-cost efficient frontier. Wheel-star graphs have a completely connected clique of agents at the center, with all other agents connected to the core but not to each other; the star and the complete graph are its extreme elements. We discuss the consequences of these results for organizations and sociometric analyses.http://deepblue.lib.umich.edu/bitstream/2027.42/64992/1/1136_lovejoy.pd

Bargaining in Supply Chains (Long Version)

We study experimentally bargaining in a multiple-tier supply chain with horizontal competition and sequential bargaining between tiers. Our treatments vary the cost differences between firms in tiers 1 and 2. We measure how these underlying costs influence the efficiency, negotiated prices and profit distribution across the supply chain, and the consistency of these outcomes with existing theory. We find that the structural issue of cost differentials dominates personal characteristics in explaining outcomes, with profits in a tier generally increasing with decreased competition in the tier and increasing with decreased competition in alternate tiers. The Balanced Principal model of supply chain bargaining does a good job explaining our data, and outperforms the common assumption of leader-follower negotiations. We find a significant anchoring effect from a firm's first bid but no effect of the sequence of those bids, no evidence of failure to close via escalation of commitment, and mixed results for a deadline effect. We also find an interesting asymmetry between the buy and sells sides in employed bidding strategy. The buy side makes predominantly concessionary offers after the initial anchor, but a significant number of sell side firms engage in aggressive anti-concessionary bidding, a strategy that is effective in that it increases prices while not compromising closure rates.http://deepblue.lib.umich.edu/bitstream/2027.42/109717/1/1259_Lovejoy.pdfhttp://deepblue.lib.umich.edu/bitstream/2027.42/109717/4/1259_Lovejoy_Mar2015.pdfDescription of 1259_Lovejoy_Mar2015.pdf : Long Version March 201

Little’s Law Flow Analysis of Observation Unit Impact and Sizing

Expanding hospital capacity by developing an observation unit may be an important strategy in congested hospitals. Understanding the principles for evaluating the potential impact and appropriate sizing of an observation unit is important. The objective of this paper is to contrast two approaches to determining observation unit sizing and profitability, real options, and a flow analysis based on Little’s Law. Both methods have validity and use similar data sets. The Little’s Law approach has the advantage of providing an estimate of appropriate size for the unit and a natural internal consistency check on data. The benefits of an observation unit can depend critically on assumptions regarding backfill patients, and minor changes in data or assumptions can translate into significant changes in annual financial consequences. Using both the real options and the Little’s Law approaches provides some internal consistency checks on data and assumptions. Both are sufficiently simple to be easily mastered and conducted. Using these two simple and accessible methods in parallel for computing the size and financial consequences for an observation unit is recommended.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/98762/1/j.1553-2712.2010.00969.x.pd

Designing Incentives in Startup Teams: Form and Timing of Equity Contracting

Entrepreneurial teams assign equity positions in their startups using a term sheet that details equity splits and conditions for being granted those splits. It is conventional wisdom in the entrepreneurial press that equal splits are poor choices. The conventional logic is that by not connecting rewards to contribution level equal split contracts can encourage free-riding behaviors. We experimentally test this conventional wisdom, among other entrepreneurial contracting hypotheses. Our results confirm the relationship between equal splits and depressed effort and contribution, but suggest a different causal sequence relative to conventional wisdom. Rather than the contract form being the primitive and the behavior the derived consequence, our results suggest the reverse. The differences in contract performance are driven primarily by the sorting of high contributors into non-equal contracts and of low contributors into equal contracts. However, delaying the contracting mitigates these sorting effects, reducing the effort gap between contracts. Taken together, our results suggest that both investors and founders should pay as much (or more) attention to personality type as they do to contract form, but if one is stuck with a given set of personalities delayed contracting (more so than contract form) can improve performance.https://deepblue.lib.umich.edu/bitstream/2027.42/138118/1/1372_Kagan.pd

Pre-auction Investments by Type-conscious Agents

This paper examines pre-auction investments made by asymmetric agents that compete for a supply contract from a monopolist principal. Agents are privately aware of their managerial efficiencies which determine how well they can leverage fixed investments to reduce their variable costs for servicing the contract, and they privately choose investment levels prior to the procurement mechanism being declared by the principal. Hence, the distribution of "types" that is standard in the principal-agent literature is, here, endogenously determined by the private actions of the agents. The principal declares a mechanism that is optimal for her, after agents have made their private investment decisions. We show that in equilibrium all optimal investment strategies by competing firms will have the form of investing as if there is no reservation price up to a critical level of managerial type, and investing minimally thereafter. This feature, however, implies that only trivial pure strategy equilibria can exist when the principal has any reasonably competitive alternative for servicing the contract. This is because in these cases an optimal mechanism induces agents to adopt a discontinuous investment strategy which provides the principal an incentive to deviate from the declared mechanism. An intuitive extrapolation of the extant literature to our context (in which agents adopt technologies featuring a fixed-variable cost trade-off) would suggest that we would see ``underinvestment," manifesting itself as lower fixed and higher variable cost technologies in the industry. However, this intuition is either sustained trivially or cannot be sustained in pure strategies when the principal has any reasonable outside options for supply. The question of what cost structure we will see in equilibrium in these contexts will require future effort, and a consideration of mixed strategies.http://deepblue.lib.umich.edu/bitstream/2027.42/48743/1/1057-Lovejoy.pd

All Payer Hospital Regulations

Introduction: An all-payer system is a price setting system where rates of payment for healthcare services have not been negotiated between a hospital or health system or a payer but instead by a third party organization, such as Maryland’s Health Services Cost Review Commission (HSCRC), who sets most hospital rates that all payers agree to honor. All payer hospitals focus is on legislative principles in an effort to control costs. Methods: The methodology for this study was a literature review compiled with overview of All-payer hospital systems and its utilization in a hospital setting. All articles prior to 2000 were eliminated from the search. Twenty-eight references were examined and concluded to have mitigated the inclusion parameters along with benefits and disadvantages of the system. Results: Since 1976 Maryland has successfully kept hospital costs under control using an all-payer system. Additionally, improvements in length of stay and other health measures have improved. While an all payer system works for Maryland that has a large population in urban areas, other states may not see an improvement if they are larger or more rural. Even with lower controlled rates, Maryland still ranks less favorably in per capita health spending and regional variations than other states. Discussion/Conclusion: The majority of states are not utilizing the benefits of all payer systems. Implementation can improve healthcare in the US by impeding escalating costs, distinguishing fair payment systems, and increasing the access to care. This research study did not extensively compare other nations all payer systems to Maryland or how it could be implemented in the US. The all payer system has practical implications in the US healthcare system. If programs to cut spending are implemented too quickly, national healthcare could be compromised

The Qualitative and Quantitative Effects of Patient Centered Medical Home in the Veterans Health Administration

Since the 1990’s, the Veteran’s Health Administration (VHA) has implemented a system of primary care that has been considered some of the best care that can be offered (Klein, 2011). The Patient Center Medical Home (PCMH) Model, also called “Patient Aligned Care Team” (PACT) in the VHA, has been coordinating and integrating services which ensure optimal health outcomes at an acceptable value (Bidassie, Davies, Stark, & Boushon, 2014). PACT was created in 2010, building on 20 years of the VHA transforming from a loosely based system of inpatient services to a provider of outpatient primary care for veterans. From 2010 until 2011, their primary care staff levels decreased from 2.3 Full Time Equivalents (FTE) to 3.0 FTE, and in there was a reduction in face to face encounters as it was increased telephone consultations and electronic messaging (Trivedi et al., 2011). The VHA meets all five core functions under the PACT system, notably with the Peer to Peer toolkit, which permits the PCP to coordinate care with multiple specialists, and allows the exchange of electronic health records, which meets the requirements for accessible services, comprehensive care, patient centered, and coordination of care with one system (Luck, 2014). Quality metrics are hard to come by because most PCPs under the pact program see quality metrics to be a hindrance to the spirit of the PACT program, because responding to the performance metrics consume time and resources, and these quality metrics do not take into account the spirt of PCMH (Kansagara et al, 2014). The purpose of this research was to analyze the effects of PACT on the VHA to determine expenditures and the overall outcome of patient care

Reproductive Character Displacement And Signal Ontogeny In A Sympatric Assemblage Of Electric Fish

Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/86991/1/j.1558-5646.2011.01245.x.pd