Incentives for Shared Services: Multiserver Queueing Systems with Priorities

2021 ◽  
Author(s):  
Hanlin Liu ◽  
Yimin Yu
Keyword(s):  
Cooperative Game ◽  
Cost Allocation ◽  
Service Providers ◽  
Queueing Systems ◽  
Service Level ◽  
Problem Definition ◽  
Shared Services ◽  
Scheduling Policy ◽  
Shared Service ◽  
Managerial Implications

Problem definition: We study shared service whereby multiple independent service providers collaborate by pooling their resources into a shared service center (SSC). The SSC deploys an optimal priority scheduling policy for their customers collectively by accounting for their individual waiting costs and service-level requirements. We model the SSC as a multiclass [Formula: see text] queueing system subject to service-level constraints. Academic/practical relevance: Shared services are increasingly popular among firms for saving operational costs and improving service quality. One key issue in fostering collaboration is the allocation of costs among different firms. Methodology: To incentivize collaboration, we investigate cost allocation rules for the SSC by applying concepts from cooperative game theory. Results: To empower our analysis, we show that a cooperative game with polymatroid optimization can be analyzed via simple auxiliary games. By exploiting the polymatroidal structures of the multiclass queueing systems, we show when the games possess a core allocation. We explore the extent to which our results remain valid for some general cases. Managerial implications: We provide operational insights and guidelines on how to allocate costs for the SSC under the multiserver queueing context with priorities.

scholarly journals Shipping to Heterogeneous Customers with Competing Carriers

2020 ◽  
Vol 22 (4) ◽  
pp. 850-867 ◽  
Author(s):  
Tao Lu ◽  
Ying-Ju Chen ◽  
Jan C. Fransoo ◽  
Chung-Yee Lee
Keyword(s):  
Product Differentiation ◽  
Service Providers ◽  
Problem Definition ◽  
Cost Advantage ◽  
Dual Sourcing ◽  
Trade Off ◽  
Freight Rates ◽  
Premium Price ◽  
Managerial Implications ◽  
Mode Of Transport

Problem definition: We study a shipper transporting and selling a short life-cycle product to a destination market via two competing transportation service providers (i.e., carriers). The two carriers offer distinct speeds and competing freight rates, whereas customers in the destination market obtain higher utility if they receive the product earlier and their time preferences are heterogeneous. Academic/practical relevance: Perishable products are commonly shipped via multiple means of transport. The faster the mode of transport, the more expensive it is, but speed enables the product to reach the market with higher quality. In addition to the trade-off between speed and cost, the competition between carriers can also influence the shipper's transportation procurement strategies. Our model highlights the implications of carrier competition in a dual sourcing problem. Methodology: We analyze a two-stage game in which carriers first compete on freight rates, and then the shipper determines the shipping quantities. Results: We show that the shipper may benefit from product differentiation via dual-mode shipping, in which the shipment that arrives earlier is sold at a premium price. In equilibrium, the shipper's profit can be U-shaped in the speed difference between carriers. Dual sourcing may be inferior to simply restricting a single shipping service in a winner-take-all fashion. Managerial implications: This study reveals an underlying trade-off between the operational advantage from product differentiation and the cost advantage from carrier competition. To benefit from either of these advantages, a shipper should use two carriers with either very distinct or very similar speeds. Single sourcing may bring an additional cost advantage that outweighs the value of production differentiation through dual sourcing.

Competition Between Two-Sided Platforms Under Demand and Supply Congestion Effects

2020 ◽  
Author(s):  
Fernando Bernstein ◽  
Gregory A. DeCroix ◽  
N. Bora Keskin
Keyword(s):  
Service Providers ◽  
Supply And Demand ◽  
Relative Number ◽  
Sharing Economy ◽  
Problem Definition ◽  
Ride Sharing ◽  
Managerial Implications ◽  
The Impact ◽  
Number Of Customers ◽  
Congestion Effects

Problem definition: This paper explores the impact of competition between platforms in the sharing economy. Examples include the cases of Uber and Lyft in the context of ride-sharing platforms. In particular, we consider competition between two platforms that offer a common service (e.g., rides) through a set of independent service providers (e.g., drivers) to a market of customers. Each platform sets a price that is charged to customers for obtaining the service provided by a driver. A portion of that price is paid to the driver who delivers the service. Both customers’ and drivers’ utilities are sensitive to the payment terms set by the platform and are also sensitive to congestion in the system (given by the relative number of customers and drivers in the market). We consider two possible settings. The first one, termed “single-homing,” assumes that drivers work through a single platform. In the second setting, termed “multihoming” (or “multiapping,” as it is known in practice), drivers deliver their service through both platforms. Academic/practical relevance: This is one of the first papers to study competition and multihoming in the presence of congestion effects typically observed in the sharing economy. We leverage the model to study some practical questions that have received significant press attention (and stirred some controversies) in the ride-sharing industry. The first involves the issue of surge pricing. The second involves the increasingly common practice of drivers choosing to operate on multiple platforms (multihoming). Methodology: We formulate our problem as a pricing game between two platforms and employ the concept of a Nash equilibrium to analyze equilibrium outcomes in various settings. Results: In both the single-homing and multihoming settings, we study the equilibrium prices that emerge from the competitive interaction between the platforms and explore the supply and demand outcomes that can arise at equilibrium. We build on these equilibrium results to study the impact of surge pricing in response to a surge in demand and to examine the incentives at play when drivers engage in multihoming. Managerial implications: We find that raising prices in response to a surge in demand makes drivers and customers better off than if platforms were constrained to charge the same prices that would arise under normal demand levels. We also compare drivers’ and customers’ performance when all drivers either single-home or multihome. We find that although individual drivers may have an incentive to multihome, all players are worse off when all drivers multihome. We conclude by proposing an incentive mechanism to discourage multihoming.

scholarly journals A Survey on Improving QoS in Service Level Agreement for Cloud Computing Environment

2021 ◽  
Vol 15 (21) ◽  
pp. 119
Author(s):  
Afaf Edinat ◽  
Rizik M. H. Al-Sayyed ◽  
Amjad Hudaib
Keyword(s):  
Cloud Computing ◽  
Learning Process ◽  
Service Providers ◽  
Service Level Agreement ◽  
Cloud Service ◽  
Service Level ◽  
Shared Services ◽  
Computing Environment ◽  
Cloud Computing Environment ◽  
The Relationship

Cloud computing is considered one of the most important techniques in the field of distributed computing which contributes to maintain increased scalability and flexibility in computer processing. This is achieved because it, using the Internet, provides different resources and shared services with minimum costs. Cloud service providers (CSPs) offer many different services to their customers, where the customers’ needs are met seeking the highest levels of quality at the lowest considerate prices. The relationship between CSPs and customers must be determined in a formal agreement, and to ensure how the QoS between them will be fulfilled, a clear Service Level Agreement (SLA) must be called for. Several previously-proposed models used in the literature to improve the QoS in the SLA for cloud computing and to face many of the challenges in the SLA are reviewed in this paper. We also addressed the challenges that are related to the violations of SLAs, and how overcoming them will enhance customers’ satisfaction. Furthermore, we proposed a model based on Deep Reinforcement Learning (DRL) and an enhanced DRL agent (EDRLA). In this model, and by optimizing the learning process in EDRLA, proposed agents would be able to have optimal CSPs by improving the learning process in EDRLA. This improvement will be reflected in the agent's performance and considerably affect it, especially in identifying cloud computing requirements based on the QoS metrics.

scholarly journals PROCESS MANAGEMENT IN LOCAL GOVERNMENT SHARED SERVICES CENTRES – FROM AN INVENTORY OF SHARED SERVICE PROCESSES TO SLA DESIGNING

2018 ◽  
Vol 17 (3) ◽  
pp. 63-73
Author(s):  
Paweł Modrzyński ◽  
Robert Karaszewski ◽  
Alicja Reuben
Keyword(s):  
Local Government ◽  
Private Sector ◽  
Process Management ◽  
Service Level ◽  
Shared Services ◽  
Public And Private ◽  
The Public ◽  
Shared Service ◽  
Public And Private Sector

The efficiency and quality of performed tasks constitute one of the indicators of functioning of an organization in both the public and private sector. The article presents the experience of the Shared Services Centre (SSC) in Toruń in the managing processes conducted as a part of provided shared service. The management of the processes which are presented by the authors of the article includes inventories of taken-over processes, their standardisation, optimisation and the principles of constructing service level agreements (SLAs) concluded by the SSC with the served units.

Clinical governance in Australia

2015 ◽  
Vol 20 (2) ◽  
pp. 56-73 ◽  
Author(s):  
Allan D Spigelman ◽  
Shane Rendalls
Keyword(s):  
Web Sites ◽  
Service Providers ◽  
Service Level ◽  
Clinical Governance ◽  
Success Factor ◽  
Quality And Safety ◽  
Funding Policy ◽  
Content Type ◽  
Health Service Providers ◽  
Governance Systems

Purpose – The purpose of this paper is to overview, background and context to clinical governance in Australia, areas for further development and potential learnings for other jurisdictions. Design/methodology/approach – Commentary; non-systematic review of clinical governance literature; review of web sites for national, state and territory health departments, quality and safety organisations, and clinical colleges in Australia. Findings – Clinical governance in Australia shows variation across jurisdictions, reflective of a fragmented health system with responsibility for funding, policy and service provision being divided between levels of government and across service streams. The mechanisms in place to protect and engage with consumers thus varies according to where one lives. Information on quality and safety outcomes also varies; is difficult to find and often does not drill down to a service level useful for informing consumer treatment decisions. Organisational stability was identified as a key success factor in realising and maintaining the cultural shift to deliver ongoing quality. Research limitations/implications – Comparison of quality indicators with clinical governance systems and processes at a hospital level will provide a more detailed understanding of components most influencing quality outcomes. Practical implications – The information reported will assist health service providers to improve information and processes to engage with consumers and build further transparency and accountability. Originality/value – In this paper the authors have included an in depth profile of the background and context for the current state of clinical governance in Australia. The authors expect the detail provided will be of use to the international reader unfamiliar with the nuances of the Australian Healthcare System. Other studies (e.g. Russell and Dawda, 2013; Phillips et al., n.d.) have been based on deep professional understanding of clinical governance in appraising and reporting on initaitives and structures. This review has utilised resources available to an informed consumer seeking to understand the quality and safety of health services.

Shared services beyond sourcing the back offices: Organizational design

2007 ◽  
Vol 26 (4) ◽  
pp. 281-290
Author(s):  
Shouhong Wang ◽  
Hai Wang
Keyword(s):  
Organizational Support ◽  
Process Design ◽  
Organizational Design ◽  
Regulation System ◽  
Shared Services ◽  
Information Process ◽  
Shared Service ◽  
Strategy Identification ◽  
The Government ◽  
Partnership Network

Shared services have been widely spread in the government and private sectors. Unlike outsourcing, shared service is the standardization and consolidation of common functions across the multiple organizations to reduce information process duplication and increase information and knowledge sharing. Shared services should be viewed less as a phenomenon of cost saving and more as a challenge of organization redesign. Five general leading theories of organizational design are examined in the perspective of shared services. A quasi-general organizational design approach is proposed specifically for shared services projects. The proposed approach emphasizes the organizational support for the shared services strategy identification, collaborative partnership network design, optimal shared services process design, and policy and regulation system design.

Partial Completion as a Nonprofit Strategy

2021 ◽  
Author(s):  
Can Zhang ◽  
Atalay Atasu ◽  
Karthik Ramachandran
Keyword(s):  
Nonprofit Organizations ◽  
Service Provision ◽  
Problem Definition ◽  
Product Service ◽  
Service Portfolio ◽  
Wide Range ◽  
Partial Completion ◽  
Innovative Solution ◽  
Managerial Implications ◽  
Level 3

Problem definition: Faced with the challenge of serving beneficiaries with heterogeneous needs and under budget constraints, some nonprofit organizations (NPOs) have adopted an innovative solution: providing partially complete products or services to beneficiaries. We seek to understand what drives an NPO’s choice of partial completion as a design strategy and how it interacts with the level of variety offered in the NPO’s product or service portfolio. Academic/practical relevance: Although partial product or service provision has been observed in the nonprofit operations, there is limited understanding of when it is an appropriate strategy—a void that we seek to fill in this paper. Methodology: We synthesize the practices of two NPOs operating in different contexts to develop a stylized analytical model to study an NPO’s product/service completion and variety choices. Results: We identify when and to what extent partial completion is optimal for an NPO. We also characterize a budget allocation structure for an NPO between product/service variety and completion. Our analysis sheds light on how beneficiary characteristics (e.g., heterogeneity of their needs, capability to self-complete) and NPO objectives (e.g., total-benefit maximization versus fairness) affect the optimal levels of variety and completion. Managerial implications: We provide three key observations. (1) Partial completion is not a compromise solution to budget limitations but can be an optimal strategy for NPOs under a wide range of circumstances, even in the presence of ample resources. (2) Partial provision is particularly valuable when beneficiary needs are highly heterogeneous, or beneficiaries have high self-completion capabilities. A higher self-completion capability generally implies a lower optimal completion level; however, it may lead to either a higher or a lower optimal variety level. (3) Although providing incomplete products may appear to burden beneficiaries, a lower completion level can be optimal when fairness is factored into an NPO’s objective or when beneficiary capabilities are more heterogeneous.

Coping with Spatial Mismatch: Subsidy Design for Electric Vehicle and Charging Markets

2021 ◽  
Author(s):  
Wei Zhang ◽  
Yifan Dou
Keyword(s):  
Electric Vehicle ◽  
Service Providers ◽  
Supply And Demand ◽  
Problem Definition ◽  
Environmental Benefits ◽  
Third Party ◽  
Theoretic Model ◽  
Spatial Mismatch ◽  
The Government ◽  
Ev Charging

Problem definition: We study how the government should design the subsidy policy to promote electric vehicle (EV) adoptions effectively and efficiently when there might be a spatial mismatch between the supply and demand of charging piles. Academic/practical relevance: EV charging infrastructures are often built by third-party service providers (SPs). However, profit-maximizing SPs might prefer to locate the charging piles in the suburbs versus downtown because of lower costs although most EV drivers prefer to charge their EVs downtown given their commuting patterns and the convenience of charging in downtown areas. This conflict of spatial preferences between SPs and EV drivers results in high overall costs for EV charging and weak EV adoptions. Methodology: We use a stylized game-theoretic model and compare three types of subsidy policies: (i) subsidizing EV purchases, (ii) subsidizing SPs based on pile usage, and (iii) subsidizing SPs based on pile numbers. Results: Subsidizing EV purchases is effective in promoting EV adoptions but not in alleviating the spatial mismatch. In contrast, subsidizing SPs can be more effective in addressing the spatial mismatch and promoting EV adoptions, but uniformly subsidizing pile installation can exacerbate the spatial mismatch and backfire. In different situations, each policy can emerge as the best, and the rule to determine which side (SPs versus EV buyers) to subsidize largely depends on cost factors in the charging market rather than the EV price or the environmental benefits. Managerial implications: A “jigsaw-piece rule” is recommended to guide policy design: subsidizing SPs is preferred if charging is too costly or time consuming, and subsidizing EV purchases is preferred if charging is sufficiently fast and easy. Given charging costs that are neither too low nor too high, subsidizing SPs is preferred only if pile building downtown is moderately more expensive than pile building in the suburbs.

The Effects of Patent Extension and Take-Back Regulation on Green Pharmacy

2021 ◽  
Author(s):  
Tianqin Shi ◽  
Nicholas C. Petruzzi ◽  
Dilip Chhajed
Keyword(s):  
Pharmaceutical Industry ◽  
Social Welfare ◽  
Technical Information ◽  
Problem Definition ◽  
Theoretic Model ◽  
Innovative Company ◽  
Take Back ◽  
Starting Point ◽  
European Environmental Agency ◽  
Managerial Implications

Problem definition: The eco-toxicity arising from unused pharmaceuticals has regulators advocating the benign design concept of “green pharmacy,” but high research and development expenses can be prohibitive. We therefore examine the impacts of two regulatory mechanisms, patent extension and take-back regulation, on inducing drug manufacturers to go green. Academic/practical relevance: One incentive suggested by the European Environmental Agency is a patent extension for a company that redesigns its already patented pharmaceutical to be more environmentally friendly. This incentive can encourage both the development of degradable drugs and the disclosure of technical information. Yet, it is unclear how effective the extension would be in inducing green pharmacy and in maximizing social welfare. Methodology: We develop a game-theoretic model in which an innovative company collects monopoly profits for a patented pharmaceutical but faces competition from a generic rival after the patent expires. A social-welfare-maximizing regulator is the Stackelberg leader. The regulator leads by offering a patent extension to the innovative company while also imposing take-back regulation on the pharmaceutical industry. Then the two-profit maximizing companies respond by setting drug prices and choosing whether to invest in green pharmacy. Results: The regulator’s optimal patent extension offer can induce green pharmacy but only if the offer exceeds a threshold length that depends on the degree of product differentiation present in the pharmaceutical industry. The regulator’s correspondingly optimal take-back regulation generally prescribes a required collection rate that decreases as its optimal patent extension offer increases, and vice versa. Managerial implications: By isolating green pharmacy as a potential target to address pharmaceutical eco-toxicity at its source, the regulatory policy that we consider, which combines the incentive inherent in earning a patent extension on the one hand with the penalty inherent in complying with take-back regulation on the other hand, serves as a useful starting point for policymakers to optimally balance economic welfare considerations with environmental stewardship considerations.

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