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.

Establishing a regional, multisite database for quality improvement and service planning in community-based palliative care and hospice.

BACKGROUND: Outpatient palliative care, an evolving delivery model, seeks to improve continuity of care across settings and to increase access to services in hospice and palliative medicine (HPM). It can provide a critical bridge between inpatient palliative care and hospice, filling the gap in community-based supportive care for patients with advanced life-limiting illness. Low capacities for data collection and quantitative research in HPM have impeded assessment of the impact of outpatient palliative care. APPROACH: In North Carolina, a regional database for community-based palliative care has been created through a unique partnership between a HPM organization and academic medical center. This database flexibly uses information technology to collect patient data, entered at the point of care (e.g., home, inpatient hospice, assisted living facility, nursing home). HPM physicians and nurse practitioners collect data; data are transferred to an academic site that assists with analyses and data management. Reports to community-based sites, based on data they provide, create a better understanding of local care quality. CURRENT STATUS: The data system was developed and implemented over a 2-year period, starting with one community-based HPM site and expanding to four. Data collection methods were collaboratively created and refined. The database continues to grow. Analyses presented herein examine data from one site and encompass 2572 visits from 970 new patients, characterizing the population, symptom profiles, and change in symptoms after intervention. CONCLUSION: A collaborative regional approach to HPM data can support evaluation and improvement of palliative care quality at the local, aggregated, and statewide levels.

Institutional change and coproduction of public services: The effect of charter schools on parental involvement

Recent discussions of school choice have revived arguments that the decentralization of governing institutions can enhance the quality of public services by increasing the participation of intended beneficiaries in the production of those services. We use data from the Schools and Staffing Survey to examine the extent to which the decentralization of authority to charter schools induces parents to become more involved in their children's schools. We find that parents are indeed more involved in charter schools than in observationally similar public schools, especially in urban elementary and middle schools. Although we find that this difference is partly attributable to measurable institutional and organizational factors, we also find that charter schools tend to be established in areas with above-average proportions of involved parents, and we find suggestive evidence that, within those areas, it is the more involved parents who tend to select into charter schools. Thus, while the institutional characteristics of charter schools do appear to induce parents to become more involved in their children's schools, such characteristics are only part of the explanation for the greater parental involvement in charter schools than in traditional public schools. © The Author 2005. Published by Oxford University Press. All rights reserved.