Decision Science Digest: August 22, 2023

BALTIMORE, MD, August 22, 2023 –

EDITOR’S NOTE: Decision Science Digest is a periodic communique highlighting recent peer-reviewed research published by INFORMS, the largest association for the decision and data sciences, across its 17 journals. This issue highlights four press releases based on the findings of new peer-reviewed articles.

• Predicting Fashion Faux Pas: Data Identifies What Will Sell, Reducing Returns (INFORMS journal Marketing Science)
• The Progression of Misconduct in the Chicago Police Department: Learned Behavior and How to Stop it (INFORMS journal Management Science)
• Reimagining Hospital Funds: How to Use What You Have to Make Quality Improvements (INFORMS journal Management Science)
• Eyes on the Sky: Preparing for the Future of Drone Air Traffic (INFORMS journal Transportation Science)

Reducing Returns and Improving Profits: Predicting Fashion Sales Before They Launch

New research in the INFORMS journal Marketing Science uses data to predict how to select and design fashion items that are less likely to be returned. Prior research shows that in online channels, products are returned at high rates. Shipping, processing and refurbishing are so costly that a retailer’s profit is extremely sensitive to return rates. In the paper, “Leveraging the Power of Images in Managing Product Return Rates,” the model automatically extracts image-based interpretable features. The results show that retailers can improve profits by more than 8% and identify items with features less likely to be returned. Fashion seasons are over before sufficient data on return rates are observed so retailers need to anticipate each item’s return rate prior to launch. This work illustrates the value of using prelaunch images to manage returns. Link to full article.

New Research Finds Misconduct is Developed in Organizations Lowest Ranks: Case Study Featuring Chicago Police Department

New research in the INFORMS journal Management Science looks at data from the Chicago Police Department to illustrate the impacts of early exposure to misconduct. The study, “Intergenerational Transmission of Organizational Misconduct: Evidence from the Chicago Police Department,” finds that early exposure to a subculture of misconduct imprints newcomers with the belief that misconduct is normal, which is then carried by these individuals into managerial positions and passed down to their subordinates. The researchers use a lottery that assigns applicants to training cohorts to demonstrate that officers with early exposure to a subculture of misconduct not only engage in more misconduct over their entire careers, but also increase the misconduct of their subordinates after they become managers. The researchers also find that this dynamic is stronger when subordinate officers are exposed to a subculture of misconduct themselves, are earlier in their tenure and have not yet received their annual review from their manager. Link to full article.

New Model Reconfigures Hospital Expenditures to Make Quality Improvements

New research in the INFORMS journal Management Science identifies ways to utilize existing hospital funding for quality improvements. The Hospital Value-Based Purchasing (VBP) Program is Medicare’s implementation of yardstick incentives applied to hospitals in the United States. Under the VBP Program, 2% of all Medicare payments to hospitals, estimated to be $1.9 billion in fiscal year 2021, are withheld and redistributed based on their relative performance in the quality of delivered care. In the paper, “Searching for the Best Yardstick: Cost of Quality Improvements in the U.S. Hospital Industry,” researchers use a model in which hospitals are engaged in repeated competition under yardstick incentives. Using structural estimation methods, they recover key parameters that govern hospitals’ decisions to invest in quality improvement. The authors estimate the trajectory of quality improvements for each hospital by dynamically solving for hospitals’ individually optimal investment policies. They found that increasing the size of the incentives from 2% to 4% would have resulted in an additional quality investment of U.S. $1.2 billion from 2011 to 2018. Link to full article.

Preparing for the Future: Managing Air Traffic of Drones

Unmanned aerial vehicles or drones are increasing in use for both commercial and casual purposes. Although there isn’t “drone traffic” now, there is a good chance there will be in the future, and it will need to be managed. New research in the INFORMS journal Transportation Science studies the problem of planning drone delivery service through an urban air traffic network space. The paper, “Branch-and-Price for Drone Delivery Service Planning in Urban Airspace,” finds an optimal way to route drones over existing roads when they are used for individual trip requests with origins, destinations and time windows. Link to full article.

About INFORMS 

As the largest professional association for the data and decision sciences, INFORMS members leverage mathematics and scientific methodologies to help organizations and governments at all levels make better, data-driven decisions. With more than 12,000 professional and student members from around the world, INFORMS is the largest association for the decision and data sciences. INFORMS members support organizations and governments at all levels as they work to transform data into information, and information into insights that save lives, save money, and solve problems.

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Contact:

Ashley Smith

443-757-3578

[email protected]