ISyE Seminar Series: Robert Shumsky
"Optimal Delay Messages"
Presentation by Robert Shumsky
Wednesday, February 23
About the seminar:
What should service providers tell their customers about delays? Typical prescriptions include ‘provide more accurate information’ or ‘under-promise and over-deliver,’ but there are few empirical studies to back up this advice and (to our knowledge) no rigorous models that capture the interplay between information provision and each customer’s emotional response. Customers are typically disappointed if they have to wait longer than expected, and may also value accuracy and precision in delay messages. We develop a framework that takes these preferences into account so that delay messages are designed to optimize the customers’ experiences while waiting. We assume that customers are Bayesian and update their beliefs about the expected start time of service, given both the messages from the service provider and the passage of time. They may be loss-averse in the sense that an increase in the expected wait causes more distress than the positive response caused by an equivalent decrease, and they may be uncertainty-averse in that variance in delay forecasts diminish utility. We find that when loss aversion dominates, the optimal message structure emphasizes provision of information about the tails of the distribution rather than simply updating the customers about the duration of the wait. When uncertainty-aversion is high, more traditional ordinal forecasts are optimal, and optimal messages should provide the most accurate information about the longest delays. In general, the model allows us to explore the role of forecasting systems and delay announcements to both provide accurate information and manage expectations.
"Optimal Delay Messages" (pdf)
Robert Shumsky is a Professor of Operations Management at the Tuck School of Business at Dartmouth and is co-director of Dartmouth’s Master in Health Care Delivery Science program. His research focuses on the improvement of service operations, and he has written about capacity estimation and control, how to allocate work to improve quality, and how to coordinate service supply chains. He has conducted research on the U.S. air traffic management system and studied transportation operations for state agencies and the Federal Aviation Administration. He has also served as a consultant for both manufacturing and service operations, including call centers and health care providers. Professor Shumsky has published articles in Manufacturing and Service Operations Management, Operations Research, Management Science, and the Proceedings of the National Academy of Science. He currently serves in various editorial positions for several academic journals. He received his PhD degree in Operations Research from MIT.