Abstract of the seminar papers

09.40—10.20    Jo van Nunen (Professor of Management Science and Information Management, Erasmus University Rotterdam):
                        OR defining the future
ICT (information and communication technology) has led many innovations over the last years. For one thing, it has made massive amounts of information about processes, products, customers and resources on-line available, which can be analyzed for the operational planning and control of and dynamic decision making in all sorts of business processes. But there is more—as companies compete with each other by designing and streamlining their primary processes together with others to serve customers in the best possible way, the need to (re)think the way to exploit their core competence. The strategic choices that enable the possibility to create organizations dynamically, depending on individual customer demands, need to be analyzed on the basis of the data available. Operations Research is a necessary tool to do this in a justified way. Indeed, we argue that OR models, and the corresponding solution methods, play a pivotal role for companies to develop a successful strategy.

10.20—11.00    Adriaan Schippers (Perot Systems):
                          Datamining for e-Customer Relationship Management
Key factors for successful (e-)Customer Relationship Management are the ability to understand customer behavior across all channels of interaction and define tailor-made criteria to segment the customer base and, secondly, design customized processes in accordance with these segments.
Starting by stressing the importance and role of CRM-Analytics, the presentation then summarizes features of the data mining technology and its benefit for companies to understand and predict customer behavior.
In two cases this is illustrated. The first is a project within a large bank concerning a strategy for customer retention. The second case shows how data mining models can be deployed to serve customer interaction in real-time.

11.25—12.05    René B.M. de Koster (professor of Logistics and Operations Management, Erasmus University Rotterdam):
                          The logistics after the click
The Internet offers new opportunities to many firms: exploiting new markets; the development of new services and products;  the supply of customized information;  a new way of doing business through for instances e-auctions and e-marketplaces.  Many companies have gone virtual and try to sell their products and services direct-to-customers in a profitable way. This is not at all easy. Which aspects play a role in the design and analysis of a logistics network and in which way? The focus of this presentation is on the consequences of Internet sales on the logistics structure.

12.05—12.45    Martin Hermsen (senior manager e-business strategy, Deloitte Consulting):
                         Yield Management (Revenue Management) in the consumer services industry
Yield management (revenue management) is the practice of maximizing profits from the sale of perishable assets, such as hotel rooms and airline seats, by controlling price, inventory and service. By seizing control of the sold volume at each price level, yield management permits a significant augmentation of revenue.
Yield management calculates and defines the most efficient tariffs to optimize revenue on the basis of modeling and forecasting demand. This technique is commonly used in the airline and hotel industry where it is part of those companies’ central reservation system. Today, most companies in the consumer services industry are present, or will be shortly, on the Internet selling directly to consumers. Dynamic pricing strategies therefore should be an integral part of any B2C e-business strategy.
During this session the following key subject and questions will be discussed:
-    What are the business drivers for designing and implementing a yield management system?
-    How should it integrate into other components of an e-business strategy and framework?
-    What are the process, technology and organizational impacts?
-    What are the challenges and critical success factors for implementation?
-    How do organizations adapt behavior to optimize benefits from yield management systems?

14.00—14.40    Ger Koole (professor of business processes optimization, Vrije Universiteit):
                         Quantitative issues for contact centers
Businesses have drastically changed their way to communicate with their clients. Telephony is used in different ways, and the Internet opens many new possibilities. Customer contacts are usually handled by a single organizational unit in the company. Quantitative issues in these contact centers are to a large extent driven by the service requirements of  telephone calls. We introduce the basic mathematics of these contact centers and show how flexibility in task assignment and occupancy levels is necessary to meet service level and productivity standards.

14.50—15.30    Rudolf Müller (Associate Professor of Economics, Maastricht University):
                         Mechanism design for electronic markets—algorithms and economics
With more and more firms using the Internet for selling and purchasing goods, the design of trading mechanisms becomes one of the most important issues in electronic commerce research. Economic theory has created a great deal of knowledge about markets, and how market design may influence prices and welfare. But applying the theory in practice had so far to assume that agents in the real world behave like agents in a model, while experimental economic research has shown that this rarely happens. Electronic trading mechanisms change this picture as they can fix market rules. Market mechanisms can further rely on an amount of information exchange and processing that was not feasible before. An electronic marketplace therefore becomes an artifact that can be designed and planned specifically to the needs of participants. The presentation examplifies this by the study of multi-item auctions.  Multi-item auctions are auctions in which an auctioneer wants to sell a set of identical, or different indivisible items. A combinatorial auction is a multi-item auction in which bidders can make bids for subsets of items. The lecture investigates combinatorial auctions from a combinatorial optimization perspective. It describes the economic properties of the Vickrey-Clarke-Groves mechanism, and the combinatorial optimization problems that have to be solved in order to make this mechanism applicable in practice. It shows how a class of primal-dual algorithms for set packing relates to combinatorial auction design. For the special case of single-minded bidders, it is shown that primal-dual algorithms define computationally efficient auctions that fulfill at the same time nice economic properties.

15.50—16.30    Eric van Damme (Professor of economics, Katholieke Universiteit Brabant):
                          Spectrum auctions
During 2000 several European countries  have auctioned UMTS licences. Holders of these 3G licenses can offer fast mobile Internet access and mobile video telephony services. The auctions have had drastic consequences for shares of  telecoms operators.Quite remarkably, the (per capita) auction revenues differed considerably in various countries, ranging from Euro 18 in Switzerland to Euro 648 in The UK. In all countries, apart from the UK, the auctions  have been accompanied with allegations of possible collusion among firms. In some countries, such as the Netherlands, where the auction was considered a fiasco, they have led to political problems as well. In this paper we explain the different experiences in different countries and discuss how game theory can help to design auctions that meet certain goals, such as maximising revenue.We also discuss how telecom firms used game theory during the playing of these auctions.