The domain and interpretation of utility functions: An exploration

This paper proposes an exploration of the methodology of utility functions that distinguishes interpretation from representation. While representation univocally assigns numbers to the entities of the domain of utility functions, interpretation relates these entities with empirically observable objects of choice. This allows us to make explicit the standard interpretation of utility functions which assumes that two objects have the same utility if and only if the individual is indifferent among them. We explore the underlying assumptions of such an hypothesis and propose a non-standard interpretation according to which objects of choice have a well-defined utility although individuals may vary in the way they treat these objects in a specific context. We provide examples of such a methodological approach that may explain some reversal of preferences and suggest possible mathematical formulations for further research.Utility, representaion, interpretation, preference reversal

Ethics outside, within or beyond OR models

Since ethical concerns are calling for more attention within Operational Research, we present three approaches to combine Operational Research models with ethics. Our intention is to clarify the trade-offs faced by the OR community, in particular the tension between the scientific legitimacy of OR models (ethics outside OR models) and the integration of ethics within models (ethics within OR models). Presenting and discussing an approach that combines OR models with the process of OR (ethics beyond OR models), we suggest rigorous ways to express the relation between ethics and OR models. As our work is exploratory, we are trying to avoid a dogmatic attitude and call for further research. We argue that there are interesting avenues for research at the theoretical, methodological and applied levels and that the OR community can contribute to an innovative, constructive and responsible social dialogue about its ethics.Ethics, models, processes, OR

Transition to the circular economy: the story of four case companies

Shifting from a linear sales model to a circular service-based business model is far from straightforward. Many challenges accrue in the transition process, including finding the right market for the recirculated product/service, setting up the reverse supply chain, selecting the right partners, and making sure the new business model is sustainable in the short, medium and long term. This paper discusses the challenges of four companies trying to close the loop while preserving current profit levels. It describes their initial ideas on how the circular business model should be designed, the process they went through, challenges faced, and the eventual outcome. Based on the learnings of the four case companies, we summarise recommendations about preparatory steps required before making the transition towards a circular business model

Designing a circular business strategy: 7 years of evolution at a large washing machine manufacturer

This paper discusses the development of circular business models for a large white goods manufacturer. A 7-year journey in designing, discussing, adapting, and finally finding a potentially profitable circular offer is summarized, and the barriers that had to be overcome in this process are highlighted. The shift from selling washing machines to repeated leases with remanufacturing steps in-between turned out to be very challenging. Despite the numerous claims in the consulting world that both manufacturers and consumers can benefit from the transition to a circular economy, it took multiple iterations to find a business model with the potential of being economically attractive to both the company and the client. The transformation process of shifting to a circular business model tends to be highly underestimated by companies and involves many issues beyond product design such as customer relationships, return logistics, remanufacturing operations, and service contracts. Researchers will need to work with companies to address the transition issues and to increase the relevance of circular economy research

Visit Allocation Problems in Multi-Service Settings: Policies and Worst-Case Bounds

Problem definition: We consider a resource allocation problem faced by health and humanitarian organizations deploying mobile outreach teams to serve marginalized communities. These teams can provide a single service or an assortment of services during each visit. Combining services is likely to increase operational efficiency but decrease the relative benefit per service per visit, as operations are no longer tailored to a single service. The aim of this study is to analyze this benefit-efficiency trade-off. Academic/practical relevance: Increased operational efficiency will enable organizations to serve more people using fewer resources. This is important given the increasing funding gap organizations are facing. Our work adds to the literature on resource allocation problems and visit allocation problems specifically, where the focus has been primarily on single services. Methodology: We analyze a general visit allocation problem incorporating demand distribution (where to go) and return time (how frequently to go). We derive analytical bounds for the benefit-efficiency trade-off, and propose visit allocation policies with worst-case optimality guarantees. Results: Our results show the benefit-efficiency trade-off can be assessed based on high level parameters. We show demand alignment is a key driver of this trade-off. We apply our results to Praesens Care, a social enterprise start-up developing mobile diagnostic laboratories, and verify our insights using real-world data. Managerial Implications: Our research contributes to the discussion on innovation and increased efficiency in health and humanitarian aid delivery by quantifying operational trade-offs in offering assortments of services. Specifically, our results help assess the potential of integrated models for health and humanitarian aid delivery and provide organizations with easy-to-implement methods to determine close-to-optimal visiting policies. Importantly, our methods remain applicable in case of limited data, making them suitable for strategic decision-making

Equity in Health and Humanitarian Logistics:A Beneficiary Perspective

In recent years, academics and health and humanitarian organizations are calling for ‘people-centered’ approaches, making beneficiaries’ preferences central to decisions making. While substantial progress has been made in capturing beneficiaries’ needs in resource allocation models, the approach to equity remains essentially ‘top-down’. That is, while diversity in needs is captured, the diversity in equity perceptions is not acknowledged. In this article, we argue there is a need for a complementary ‘bottom up’ view on equity, taking the perspective of the beneficiary. This will help academics and organizations to better account for the diversity in culture, experience, and social status present in most beneficiary populations. We present the 3P framework (People, Past, and Present) to help systematically think of drivers of beneficiaries’ distributional preferences. Furthermore, we illustrate how these preferences can be integrated into utility-based modeling and why accounting for preferences is important