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.

Automated Assessment of Image Quality and Dose Attributes in Clinical CT Images

Computed tomography (CT) is a valuable technology to the healthcare enterprise as evidenced by the more than 70 million CT exams performed every year. As a result, CT has become the largest contributor to population doses amongst all medical imaging modalities that utilize man-made ionizing radiation. Acknowledging the fact that ionizing radiation poses a health risk, there exists the need to strike a balance between diagnostic benefit and radiation dose. Thus, to ensure that CT scanners are optimally used in the clinic, an understanding and characterization of image quality and radiation dose are essential.

The state-of-the-art in both image quality characterization and radiation dose estimation in CT are dependent on phantom based measurements reflective of systems and protocols. For image quality characterization, measurements are performed on inserts imbedded in static phantoms and the results are ascribed to clinical CT images. However, the key objective for image quality assessment should be its quantification in clinical images; that is the only characterization of image quality that clinically matters as it is most directly related to the actual quality of clinical images. Moreover, for dose estimation, phantom based dose metrics, such as CT dose index (CTDI) and size specific dose estimates (SSDE), are measured by the scanner and referenced as an indicator for radiation exposure. However, CTDI and SSDE are surrogates for dose, rather than dose per-se.

Currently there are several software packages that track the CTDI and SSDE associated with individual CT examinations. This is primarily the result of two causes. The first is due to bureaucracies and governments pressuring clinics and hospitals to monitor the radiation exposure to individuals in our society. The second is due to the personal concerns of patients who are curious about the health risks associated with the ionizing radiation exposure they receive as a result of their diagnostic procedures.

An idea that resonates with clinical imaging physicists is that patients come to the clinic to acquire quality images so they can receive a proper diagnosis, not to be exposed to ionizing radiation. Thus, while it is important to monitor the dose to patients undergoing CT examinations, it is equally, if not more important to monitor the image quality of the clinical images generated by the CT scanners throughout the hospital.

The purposes of the work presented in this thesis are threefold: (1) to develop and validate a fully automated technique to measure spatial resolution in clinical CT images, (2) to develop and validate a fully automated technique to measure image contrast in clinical CT images, and (3) to develop a fully automated technique to estimate radiation dose (not surrogates for dose) from a variety of clinical CT protocols.