Deishin Lee

• Ata, B.; Lee, D.; Tongarlak, M. T., (Forthcoming), "A diffusion model of dynamic participant inflow management", Queueing Systems
  Abstract: This paper studies a diffusion control problem motivated by challenges faced by public health agencies who run clinics to serve the public. A key challenge for these agencies is to motivate individuals to participate in the services provided. They must manage the flow of (voluntary) participants so that the clinic capacity is highly utilized, but not overwhelmed. The organization can deploy costly promotion activities to increase the inflow of participants. Ideally, the system manager would like to have enough participants waiting in a queue to serve as many individuals as possible and efficiently use clinic capacity. However, if too many participants sign up, resulting in a long wait, participants may become irritated and hesitate to participate again in future. We develop a diffusion model of managing participant inflow mechanisms. Each mechanism corresponds to choosing a particular drift rate parameter for the diffusion model. The system manager seeks to balance three different costs optimally: (i) a linear holding cost that captures the congestion concerns, (ii) an idleness penalty corresponding to wasted clinic capacity and negative impact on public health, and (iii) costs of promotion activities. We show that a nested-threshold policy for deployment of participant inflow mechanisms is optimal under the long-run average cost criterion. In this policy, the system manager progressively deploys mechanisms in increasing order of cost, as the number of participants in the queue decreases. We derive explicit formulas for the queue length thresholds that trigger each promotion activity, providing the system manager with guidance on when to use each mechanism.

  Link(s) to publication:

  http://dx.doi.org/10.1007/s11134-024-09909-y

• Ata, B.; Tongarlak, M. T.; Lee, D.; Field, J., 2024, "A Dynamic Model for Managing Volunteer Engagement", Operations Research, January 72(5)
  Abstract: Non-profit organizations that provide food, shelter, and other services to people in need, rely on volunteers to deliver their services. Unlike paid labor, non-profit organizations have less control over unpaid volunteers’ schedules, efforts, and reliability. However, these organizations can invest in volunteer engagement activities to ensure a steady and adequate supply of volunteer labor. We study a key operational question of how a non-profit organization can manage its volunteer workforce capacity to ensure consistent provision of services. In particular, we formulate a multiclass queueing network model to characterize the optimal engagement activities for the non-profit organization to minimize the costs of enhancing volunteer engagement, while maximizing productive work done by volunteers. Because this problem appears intractable, we formulate an approximating Brownian control problem in the heavy traffic limit and study the dynamic control of that system. Our solution is a nested threshold policy with explicit congestion thresholds that indicate when the non-profit should optimally pursue various types of volunteer engagement activities. A numerical example calibrated using data from a large food bank shows that our dynamic policy for deploying engagement activities can significantly reduce the food bank's total annual cost of its volunteer operations while still maintaining almost the same level of social impact. This improvement in performance does not require any additional resources -- it only requires that the food bank strategically deploy its engagement activities based on the number of volunteers signed up to work volunteer shifts.

  Link(s) to publication:

  http://dx.doi.org/10.1287/opre.2021.0419

• Lee, D., 2023, "Transforming food supply chains for sustainability", Journal of Supply Chain Management, October 59(4): 79 - 92.
  Abstract: Modern food supply chains—infused with scientific and engineering innovations—have made food increasingly more affordable and accessible. Yet there is growing concern about the long-term sustainability of our food system. Over time, the inputs (e.g., water, fertile soil, fossil fuels, and chemicals) and working resources (e.g., land and labor) required for industrial food production and its associated supply chain structure have become more scarce and hence more expensive. At the same time, the by-products of these farming and supply chain activities (e.g., farm runoff and greenhouse gas emissions) have often created negative externalities on the environment and human health. To improve the sustainability of food production, research from the life sciences recommends adoption of transformative farming methods that incorporate ecological principles in a sustainable approach to farming. Operationally, this approach leverages economies of scope. In order to maintain strategic alignment, changing food production methods should be complemented with appropriate changes in the rest of the supply chain, including consumption habits. We propose a research agenda informed by findings from the life sciences, which integrates approaches from supply chain management as well as food and agricultural economics, to align all food supply chain partners with sustainable food production.

  Link(s) to publication:

  http://dx.doi.org/10.1111/jscm.12310

• Agrawal, V.; Lee, D., 2019, "The Effect of Sourcing Policies on Suppliers’ Sustainable Practices", Production and Operations Management, April 28(4): 767 - 787.
  Abstract: To meet the growing demand for sustainably produced products, firms must be able to source sustainably produced parts from their suppliers. In this paper, we analyze how a buyer (manufacturer or retailer) can use sourcing policies to influence their suppliers to adopt sustainable processes that can meet certain sustainability criteria. We study two sustainable sourcing policies commonly observed in practice, which influence suppliers’ process decisions by committing to offer sustainable products. Under a Sustainable Preferred policy, a buyer commits to offering a sustainable product if she can source sustainably produced parts from the supplier, but will otherwise offer a conventional product. In contrast, under a Sustainable Required sourcing policy, a buyer will only offer a sustainable product, and therefore will only source from the supplier if he has adopted a sustainable process. Our results offer insights for managers by identifying how these sustainable sourcing policies influence upstream suppliers to switch to a sustainable process, and how this affects the ability of a downstream buyer to offer a sustainable product. We find that when the buyer sources from a sole supplier, the Preferred policy can deter the supplier from switching as compared to when the buyer remains noncommittal. However, only the Required policy can induce the supplier to switch. In contrast, when a buyer has multiple suppliers, the Preferred policy does not deter the supplier, but can induce him to switch to a sustainable process, similar to the Required policy. Accordingly, our results suggest that to induce the supplier to switch to a sustainable process, a buyer should adopt a Required policy when sourcing from a sole supplier, but utilize a Preferred policy when there are multiple suppliers.

  Link(s) to publication:

  https://onlinelibrary.wiley.com/doi/abs/10.1111/poms.12943

  http://dx.doi.org/10.1111/poms.12943

• Ata, B.; Lee, D.; Sönmez, E., 2019, "Dynamic Volunteer Staffing in Multicrop Gleaning Operations", Operations Research, March 67(2): 295 - 597.
  Abstract: Gleaning programs organize volunteer gleaners to harvest a variety of leftover crops that are donated by farmers for the purpose of feeding food-insecure individuals. Thus, the gleaning process simultaneously reduces food waste and food insecurity. However, the operationalization of this process is challenging because gleaning relies on two uncertain sources of input: the food and labor supplies. The purpose of this paper is to help gleaning organizations increase the (value-weighted) volume of fresh food gleaned by better managing the uncertainties in the gleaning operation. We develop a model to capture the uncertainties in food and labor supplies and seek a dynamic volunteer-staffing policy that maximizes the payoff associated with the amount of food gleaned. The exact analysis of the staffing problem seems intractable. Therefore, we resort to an approximation in the heavy traffic regime. In that regime, we characterize the system dynamics of the multicrop gleaning operation and derive the optimal staffing policy in closed form. The optimal policy is a nested threshold policy that specifies the staffing level for each class of donation (i.e., a donation of a particular crop type and donation size). The policy depends on the number of available gleaners and the backlog of gleaning donations. A numerical study using data calibrated from a gleaning organization in the Boston area shows that the dynamic staffing policy we propose can recover approximately 10% of the volume lost when the gleaning organization uses a static policy. To achieve this improvement, no capital or major process changes would be required—only some small changes to the staffing level requests.

  Link(s) to publication:

  http://dx.doi.org/10.1287/opre.2018.1792

• Lee, D.; Sönmez, E.; Gómez, M.; Fan, X., 2017, "Combining Two Wrongs to Make Two Rights: Mitigating Food Insecurity and Food Waste through Gleaning Operations", Food Policy, April 68: 40 - 52.
  Abstract: Two concurrent social issues in the United States are food insecurity and food waste. The practice of gleaning offers a mechanism for combining these problems to create a synergistic solution. We develop a stochastic optimization model to determine the schedule that maximizes the volume of excess crops rescued from farm fields for the purpose of feeding food-insecure households, thus maximizing social impact. We model gleaning as a service operation where donation calls arrive randomly requesting to be scheduled within a limited time window. The feature that distinguishes gleaning operations from other service settings is that there is uncertainty in both when donations will arrive and the attendance of the gleaners who are volunteers that are not obliged to attend gleaning trips. We apply our model to the gleaning operation of the Food Bank of the Southern Tier in New York State, focusing on five major crops produced in the region. By characterizing how the gleaning operation behaves, our model allows us to optimize the gleaning schedule to maximize the expected total volume gleaned and determine under which conditions different operational strategies can be most useful for improving the performance of the gleaning operation. This in turn enables us to identify conditions under which alternative policy interventions (e.g., farm donation tax credits and government grants to strengthen operational capacity) are more effective for scaling up gleaning programs.

  Link(s) to publication:

  http://dx.doi.org/10.1016/j.foodpol.2016.12.004

• Lee, D.; Tongarlak, M. T., 2017, "Converting Retail Food Waste into By-Product", European Journal of Operational Research, March 257(3): 944 - 956.
  Abstract: By-product synergy (BPS) is a form of joint production that uses the waste stream from one (primary) process as useful input into another (secondary) process. The synergy is derived from avoiding waste disposal cost in the primary process and virgin raw material cost in the secondary process. BPS increases profit and can have a positive environmental impact by reducing waste. We investigate how BPS can mitigate food waste in a retail grocer setting, and how it interacts with other mechanisms for reducing waste (i.e., waste disposal fee and tax credit for food donation). In the retail setting, waste is generated because of demand uncertainty – the retailer stocks inventory without knowing demand and excess units become waste. We derive the retailer’s optimal order policy under BPS and the order policy for a more practical hybrid implementation of BPS, and compare these BPS implementations to the benchmark case where the retailer only sells fresh produce (“Fresh Only”). We show that the benefit of BPS increases in primary demand uncertainty, but decreases in secondary demand uncertainty. We find that BPS can reduce waste when secondary demand uncertainty and the net tax benefit from donation are low, but can increase waste if increased secondary demand uncertainty drives up safety stock. Our results suggest that under BPS, the threshold net tax benefit required to induce donation increases because BPS competes with donation for excess primary units. We find that the tax credit and disposal fee are substitute mechanisms for inducing food donation.

  Link(s) to publication:

  https://www.sciencedirect.com/science/article/pii/S0377221716306580

  http://dx.doi.org/10.1016/j.ejor.2016.08.022

• Lee, D.; Ata, B.; Tongarlak, M. T., 2017, "Mechanisms for Increasing Sourcing from Capacity-Constrained Local Suppliers", Decision Sciences, February 48(1): 108 - 149.
  Abstract: The fresh produce supply chain is characterized by large (mainstream) farms that are located far from consumers, and capacity‐constrained (local) farms that are located close to the consumer. In this setting, we study: (i) how leadtime and capacity asymmetry between mainstream and local farms affect a retail grocer's order policy for fresh produce, and (ii) how various operational mechanisms can increase the amount sourced from local farms. We show that this supply chain structure is disadvantageous for local suppliers (farms) because it induces the retailer to treat the local supply as a de facto responsive supply without paying a premium for the responsiveness. This disadvantage is exacerbated when the retailer's objective is to achieve a high service level. We study three mechanisms that can improve conditions for local farms: working with an intermediary, backhauling, and a retail order policy, purchase guarantee, that explicitly supports local farms. The intermediary and backhauling mechanisms help the local farm by making local supply more attractive to the retailer, inducing her to order more locally sourced produce. The intermediary reduces the retailer's overstock and stockout costs whereas backhauling increases the average margin. The purchase guarantee order policy helps local farms at the expense of retail profit. However, we show that purchase guarantee and backhauling are complementary mechanisms that together can benefit the retailer and local farms.

  Link(s) to publication:

  http://dx.doi.org/10.1111/deci.12204

• Sonmez, E.; Lee, D.; Gomez, M. I.; Fan, X., 2016, "Improving Food Bank Gleaning Operations: An Application in New York State", American Journal of Agricultural Economics, March 98(2): 549 - 563.
  Abstract: Gleaning is increasingly attracting the attention of food safety networks, including food banks, as a valuable tool that simultaneously reduces food loss and alleviates food insecurity. However, managing gleaning operations can be challenging because the arrival of gleaning opportunities and the attendance of gleaner volunteers are both stochastic. We develop a stochastic optimization model to characterize and optimize a gleaning operation. The food bank chooses the gleaning schedule, which affects the gleaner capacity and the number of gleaning opportunities scheduled. In a specific field study of the Food Bank of the Southern Tier in New York, we analyze the tradeoff between call and volume service levels to find the optimum schedule that maximizes the expected total volume gleaned. Moreover, we find that increasing the gleaning window and increasing slot availability can be used as substitute mechanisms for increasing the total volume gleaned. Additionally, we use our model to assess the impact of recruiting more volunteer gleaners.

  Link(s) to publication:

  https://academic.oup.com/ajae/article/98/2/549/2195583

  http://dx.doi.org/10.1093/ajae/aav069

• Ata, B.; Lee, D.; Tongarlak, M. T., 2012, "Optimizing Organic Waste to Energy Operations", Manufacturing and Service Operations Management, March 14(2): 231 - 244.
  Abstract: A waste-to-energy firm that recycles organic waste with energy recovery performs two environmentally beneficial functions: it diverts waste from landfills and it produces renewable energy. At the same time, the waste-to-energy firm serves and collects revenue from two types of customers: waste generators who pay for waste disposal service and electricity consumers who buy energy. Given the process characteristics of the waste-to-energy operation, the market characteristics for waste disposal and energy, and the mechanisms regulators use to encourage production of renewable energy, we determine the profit-maximizing operating strategy of the firm. We also show how regulatory mechanisms affect the operating decisions of the waste-to-energy firm. Our analyses suggest that if the social planner's objective is to maximize landfill diversion, offering a subsidy as a per kilowatt-hour for electricity is more cost effective, whereas if the objective is to maximize renewable energy generation, giving a subsidy as a lump sum to offset capital costs is more effective. This has different regulatory implications for urban and rural settings where the environmental objectives may differ.

  Link(s) to publication:

  http://dx.doi.org/10.1287/msom.1110.0359

• Lee, D., 2012, "Turning Waste into By-Product", Manufacturing and Service Operations Management, March 14(1): 115 - 127.
  Abstract: This paper studies how a firm can create and capture value by converting a waste stream into a useful and saleable by-product (i.e., implementing by-product synergy (BPS)). We show that BPS creates an operational synergy between two products that are jointly produced. In essence, BPS is a process innovation that reduces the marginal cost of the original product and/or the by-product. The firm creates value through this process innovation and can capture this value by capturing newly created market opportunities, taking market share from competitors, or licensing the innovation to its competitors. We determine the optimal operating and licensing strategies for the firm and find market conditions under which the firm would benefit most from implementing BPS. We show that the optimal operating and licensing strategies are driven by the size of the cost reduction enabled by the BPS process innovation. We also show that leveraging the synergies between the original product and by-product can lead to counterintuitive profit-maximizing operating strategies such as increasing the amount of waste generated, and strategically increasing the quantity of original product above the business as usual production volume. We present a framework for assessing the environmental impact of BPS that incorporates the impact of the optimal operating and licensing strategies.

  Link(s) to publication:

  https://pubsonline.informs.org/doi/abs/10.1287/msom.1110.0352

• Lee, D.; Van den Steen, E., 2010, "Managing Know-How", Management Science, February 56(2): 270 - 285.
  Abstract: We study how firms can use a knowledge management system to optimally leverage employee-generated know-how. In particular, we consider the following practical strategic questions for the manager of a knowledge-intensive firm: Should her firm develop a formal knowledge system? And if so, how should it be managed, particularly in terms of what information to record? We find that firms benefit more from a knowledge system when they are larger, face the same issues more frequently, have higher turnover, and face problems about which there is less general knowledge. In terms of what information to record, a key insight is that recording moderately successful practices can be counterproductive, because doing so may inefficiently reduce employees' incentives to experiment. This “strong-form competency trap” forces firms into an exploration–exploitation trade-off. Firms that value a knowledge system most should also be most selective in recording information. We further find that recording successes is more valuable than recording failures, which supports firms' focus on best practice. Beyond these main principles, we also show that it may be optimal to disseminate know-how on a plant level but not on a firm level, and that recording backup solutions is most valuable at medium levels of environmental change.

  Link(s) to publication:

  http://dx.doi.org/10.1287/mnsc.1090.1101

• Lee, D.; Mendelson, H., 2008, "Divide and Conquer: Competing with Free Technology under Network Effects", Production and Operations Management, January 17(1): 12 - 28.
  Abstract: We study how a commercial firm competes with a free open source product. The market consists of two customer segments with different preferences and is characterized by positive network effects. The commercial firm makes product and pricing decisions to maximize its profit. The open source developers make product decisions to maximize the weighted sum of the segments' consumer surplus, in addition to their intrinsic motivation. The more importance open source developers attach to consumer surplus, the more effort they put into developing software features. Even if consumers do not end up adopting the open source product, it can act as a credible threat to the commercial firm, forcing the firm to lower its prices. If the open source developers' intrinsic motivation is high enough, they will develop software regardless of eventual market dynamics. If the open source product is available first, all participants are better off when the commercial and open source products are compatible. However, if the commercial firm can enter the market first, it can increase its profits and gain market share by being incompatible with its open source competitor, even if customers can later switch at zero cost. This first‐mover advantage does not arise because users are “locked in,” but because the commercial firm deploys a “divide and conquer” strategy to attract early adopters and exploit late adopters. To capitalize on its first‐mover advantage, the commercial firm must increase its development investment to improve its product features.

  Link(s) to publication:

  http://dx.doi.org/10.3401/poms.1070.0005

• Lee, D.; Mendelson, H., 2007, "Adoption of Information Technologies under Network Effects", Information Systems Research, December 18(4): 395 - 413.
  Abstract: Because information technologies are often characterized by network effects, compatibility is an important issue. Although total network value is maximized when everyone operates in one compatible network, we find that the technology benefits for the users depend on vendor incentives, which are driven by the existence of “de facto” or “de jure” standards. In head-to-head competition, customers are better off “letting a thousand flowers bloom,” fostering fierce competition that results in a de facto standard if users prefer compatibility over individual fit, or a split market if fit is more important. In contrast, firms that sponsor these products are better off establishing an up-front, de jure standard to lessen the competitive effects of a network market. However, if a firm is able to enter the market first by choosing a proprietary/incompatible technology, it can use a “divideand-conquer” strategy to increase its profit compared with head-to-head competition, even when there are no switching costs. When there is a first mover, the early adopters, who are “locked in” because of switching costs, never regret their decision to adopt, whereas the late adopters, who are not subject to switching costs, are exploited by the incumbent firm. In head-to-head competition, customers are unified in their preference for incompatibility when there is a first mover; late adopters prefer de jure compatibility because they bear the brunt of the first-mover advantage. This again underscores the interdependence of user net benefits and vendor strategies

  Link(s) to publication:

  http://dx.doi.org/10.1287/isre.1070.0138

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