Supply Chain Planning Decisions and AI recommendations (joint work with Lijia Tan and Willem van Jaarsveld)
Sophisticated AI algorithms are often employed in practice to help supply chain planners make decisions (e.g., forecasting, ordering, production). How are these algorithmic suggestions used by humans and do decision makers learn from AI tools? We look at a complex supply chain decision setting with uncertainties, delays, and interrelated decisions. We conduct incentivized lab experiments where decision makers have a sophisticated AI tool avaible, based on a neural network algorithm, which can significantly improve operational outcomes. Decision makers largely use the black-box algorithmic suggestions but in most of the cases modify them. Trust in AI recommendations depends on the type of decision (i.e., order, assembly, transport), the decision maker’s task experience, and their general attitude towards AI tools.
Authentication Service as a Signal of Quality on Second-Hand Platforms (joint work with Masoud Fazlavi and Chong Zhang)
The potential of second-hand product markets to decrease the negative environmental impact of production is high. One obstacle to developing such online markets is consumers’ uncertainty about products' quality. This work investigates the potential of an authentication service, offered by the platform, to mitigate such quality uncertainty for second-hand products. Using a signaling model, we find that a product authentication service offered as an option at a cost can act as a reliable signal of high-quality sellers. This service increases the high-quality sellers’ probability of sale and also their profits, making the platform more attractive for such sellers.
Unbounded rampups under bounded rationality: the case of COVID-19 distribution in The Netherlands (joint work with Henk Akkermans and Albert Mandemakers)
Very fast and coordinated ramp-ups of new products or services are almost always problematic. Typically, managers are inherently boundedly rational, overestimate the scalability of their supply chains, consider fewer alternatives, and coordinate less with other supply chain actors. One notable exception to the phenomenon is COVID-19 production and distribution. In many countries, including European countries such as The Netherlands, vaccines could be designed, produced and distributed much faster than was anticipated. This is all the more surprising, because these ramp-ups were so risky. Why was this? We study the case of the Dutch COVID-19 distribution. The first mile of distribution, from the manufacturing sites to the regional distribution point, worked efficiently, despite the extreme challenges. The logistic service providers coordinated very well and prioritized COVID-vaccines leveraging their broad portfolio. Last mile distribution and vaccination was the responsibility of the regulator in The Netherlands. Outside industry expertise was insufficiently sought, alternative solutions were inadequately evaluated, and adjustments to prior choices were not made easily.