Essays in Empirical Operations Management: Bayesian Learning of Service Quality and Structural Estimation of Complementary Product Pricing and Inventory Management

This dissertation contributes to the rapidly growing empirical research area in the field of operations management. It contains two essays, tackling two different sets of operations management questions which are motivated by and built on field data sets from two very different industries --- air cargo logistics and retailing.

The first essay, based on the data set obtained from a world leading third-party logistics company, develops a novel and general Bayesian hierarchical learning framework for estimating customers' spillover learning, that is, customers' learning about the quality of a service (or product) from their previous experiences with similar yet not identical services. We then apply our model to the data set to study how customers' experiences from shipping on a particular route affect their future decisions about shipping not only on that route, but also on other routes serviced by the same logistics company. We find that customers indeed borrow experiences from similar but different services to update their quality beliefs that determine future purchase decisions. Also, service quality beliefs have a significant impact on their future purchasing decisions. Moreover, customers are risk averse; they are averse to not only experience variability but also belief uncertainty (i.e., customer's uncertainty about their beliefs). Finally, belief uncertainty affects customers' utilities more compared to experience variability.

The second essay is based on a data set obtained from a large Chinese supermarket chain, which contains sales as well as both wholesale and retail prices of un-packaged perishable vegetables. Recognizing the special characteristics of this particularly product category, we develop a structural estimation model in a discrete-continuous choice model framework. Building on this framework, we then study an optimization model for joint pricing and inventory management strategies of multiple products, which aims at improving the company's profit from direct sales and at the same time reducing food waste and thus improving social welfare.

Collectively, the studies in this dissertation provide useful modeling ideas, decision tools, insights, and guidance for firms to utilize vast sales and operations data to devise more effective business strategies.

Leading from the Edge: Marginal Leadership at Cultural Crossroads

If a church reflects its larger community, it will have more dynamic interactions among different people. Current U.S. communities consist of very diverse people who have different socioeconomic and cultural backgrounds. Since the mid 20th century, various immigrant communities who have dissimilar cultural, religious, and linguistic traditions have accelerated the need of change in American churches. The drastic cultural change has demanded churches to equip their lay and clergy leaders with multicultural competencies for effective ministries.

My thesis explores imaginative leadership in cultural crossroads. Emphasizing the leadership imagination of cross-cultural ministry, I approach it in biblical, theological, and missional perspectives. In this dynamic cultural milieu, the study topic may help the church renew its ecclesial purpose by seeing cross-cultural ministry as a creative opportunity to reach out to more diverse people of God. I begin with a conceptual framework for cross-cultural ministry and cultural intelligence. Then I explain why cross-cultural ministry is significant and how it enhances the spirit of Christ Jesus. As I develop the thesis, I discuss leadership challenge and development in the cross-cultural ministry context. This thesis may contribute to equipping lay and clergy leaders by overcoming the homogeneous ‘in-group’ mindset in the church.

The primary focus is on developing marginal leadership of church in the post-Christendom era. Church leaders must creatively hold the tension between the current church context and Christian faith resources and seek a hopeful resolution as a third way through integrative thought process. While conventional leadership emphasizes a better choice out of the given options, marginal leadership takes time for integrative thought process to seek a new direction for the future. Conventional leaders take the center with their power, status, and prestige, but marginal leaders position themselves on the edge. Leading from the edge is a distinctive cross-cultural leadership and is based on the servant leadership of Jesus Christ who put himself as a servant for the marginalized. By serving and relating to others on the margin, this imaginative leadership may make appropriate changes desired in today’s American churches.

In addition to academic research, I looked into the realities of cross-cultural leadership in the local churches through congregational studies. I speculated that church leadership involves both laity and clergy and that it can be enhanced. All Christians are called to serve the Lord according to their gifts, and it is crucial for lay and clergy persons to develop their leadership character and skills. In particular, as humans are contextualized with their own cultures, church leaders often confront great challenges in cross-cultural or multicultural situations. Through critical thoughts and imaginative leadership strategies, however, they can overcome intrinsic human prejudice and obstacles.

Through the thesis project, I have reached four significant conclusions. First, cultural intelligence is an essential leadership capacity for all church leaders. As the church consists of more diverse cultural people today, its leaders need to have cultural competencies. In particular, cross-cultural leaders must be equipped with cultural intelligence. Cross-cultural ministry is not a simple byproduct of social change, but a creative strategy to open a door to bring God’s reconciliation among diverse people. Accordingly, church leaders are to be well prepared to effectively cope with the challenges of cultural interactions. Second, both lay and clergy leaders’ imaginative leadership is crucial for leading the congregation. While conventional leadership puts an emphasis on selecting a better choice based on the principle of opportunity cost, imaginative leaders critically consider the present church situations and Christian faith values together in integrative thoughts and pursue a third way as the congregation’s future hope. Third, cross-cultural leadership has a unique characteristic of leading from the edge and promotes God’s justice and peaceable relationships among different people. By leading the congregation from the edge, church leaders may experience the heart of Christ Jesus who became the friend of the marginalized. Fourth, the ‘homogeneous unit principle’ theory has its limit for today’s complex ‘inter-group’ community context. The church must be a welcoming and embracing faith community for all people. Cross-cultural ministry may become an entrance door for a more peaceable and reconciling life among different people. By building solidarity with others, the church may experience a kingdom reality.

This thesis focuses on the mission of the church and marginal leadership of church leaders in ever-changing cultural crossroads. The church becomes a hope in the broken and apathetic world, and Christians are called to build relationships inside and beyond the church. It is significant for church leaders to be faithfully present on the margin and relate to diverse people. By consistently positioning themselves on the margin, they can build relationships with new and diverse people and shape a faithful life pattern for others.