Essays in Operations Management: Applications in Health Care and the Operations-Finance Interface

Abstract

I present three essays pertaining to the management of supply chain risks in this dissertation. The first essay and the second essay analyze supply chain risks from a financial perspective, while the third essay analyzes supply chain risk with the objective of maximizing societal benefits in health care.

In my first essay, I consider a firm facing inventory decisions under the influence of the financial market. With stochastic analytical methods, the purpose of this essay is to examine the optimal inventory decisions under a variety of conditions. I have identified the relevant factors impacting such decisions and the firm's value. Moreover, I have studied the benefits brought by efforts to improve the random capacity of the firm. I conclude that the financial market can significantly impact both a firm's inventory decisions and process improvement incentives.

In my second essay, I model a stylized supply chain managed by a base-stock inventory policy where the decision maker holds concerns about the down-side risk of the supply chain cost. With stochastic analytical methods, the purpose of this essay is to obtain solutions of the problem of minimizing Conditional Value-at-Risk under various supply chain scenarios. I find that various supply chain parameters may influence the optimal solution and the optimality of a stock-less operation. I conclude that operating characteristics of a supply chain can shape its inventory policy when down-side risks are taken into account.

For my third essay, the purpose of this essay is to investigate the operational decisions of a medical center specializing in bone marrow transplants. Using the queuing system method, I formulate the medical center as a queuing system with random patient arrivals and departures. I find optimal decisions and efficient frontiers regarding waiting room size and the number of transplant rooms with the objective of maximizing patient health benefits. I conclude that the design of a health care delivery system is crucial for health care institutions to sustain and improve their social impacts.

In each of the three essays, I use analytical and numerical approaches to optimize managers' decisions with respect to various sources of risk.