Rogelio Oliva

Texas A&M University | TAMU · Department of Information and Operations Management

JOM has made Design Science central to its development strategy, creating a department to incubate papers using this methodology. An inaugural editorial published in 2016 called for papers with a generic design supported by a design proposition that provides pragmatic guidelines to bridge the gap between the case specific and the universal. In this...

Despite its importance to OM, demand forecasting has been perceived as a "problem-solving" exercise; most empirical work in the field has focused on explanatory models but neglected prediction problems that are part of empirical science. The present study, involving one of the leading electronics distributors in the world, aims to improve predictio...

Despite numerous optimization techniques proposed to address inventory record inaccuracy (IRI), there continues to be a lack of empirical appreciation of IRI, nor do existing item-level inspection policies accommodate managerial needs for allocating inspection effort to groups of items. We address these issues by collaborating with a retailer to co...

Problem Definition: We empirically examine a complementary behavioral source of the bullwhip effect that has been previously overlooked in the literature: that individuals order more aggressively (i.e., overreact) when they face shortages than when they hold inventory. Methodology/Results: We conduct a behavioral experiment using the Beer Distribut...

Machine learning's (ML's) unique power to approximate functions and identify non-obvious regularities in data has attracted considerable attention from researchers in natural and social sciences. The emergence of predictive modeling applications in OM studies notwithstanding, it remains unclear how OM scholars can effectively leverage supervised ML...

This research explores the value of data sharing in a two-echelon, fresh product supply chain consisting of a retailer and manufacturer. Demand is stochastic and price sensitive. Decision-making is decentralized and the supply chain operates with a simple linear wholesale price contract. We employ a game theoretic model in which the manufacturer is...

Empirically grounding analytics (EGA) is an area of research that emerges at the intersection of empirical and analytical research. By "empirically grounding," we mean both the empirical justification of model assumptions and parameters and the empirical assessment of model results and insights. EGA is a critical but largely missing aspect of opera...

Manufacturers have shifted their focus from products to smart solutions in search of higher returns and additional growth opportunities. This shift, described as servitization, or lately as a digital servitization, is not a simple process. Academic study has revealed that its issues are complex, problematic, contingent, and even paradoxical, involv...

This article is based on my talk at the 2019 International System Dynamics Conference on the occasion of receiving the Jay. W. Forrester Award for the article, “Structural dominance analysis of large and stochastic models” (System Dynamics Review 2016, 32(1): 26–51). I summarize here the history of the research project that led to the award‐winning...

Call For Papers for Handbook in Servitization

Retail inventories have been consistently dropping, relative to sales, since the 1990s. Whether these lean inventory developments translate to better retailer operational performance is still an open question. We empirically examine associations between inventory leanness and operational efficiency for a sample of public U.S. retailers from 2000 to...

In this chapter, we show how the tools and principles of system dynamics facilitate the integration of operations management and behavioral sciences. At its core, system dynamics develops process‐based theories that explicitly examine the interactions between the physical and institutional structures of operational systems and the behavioral decisi...

The purpose of this article is to report on improvements on the interpretation and insights emerging from dynamic decomposition weight analysis (DDWA). These improvements emerged from efforts to further automate and expand the eigenvalue elasticity analysis methods and resolve inconsistencies in assumptions made in published reports of DDWA usage....

The supply chain literature has devoted much attention to studying how the variability of orders propagates upstream. We explore how this insight extends to the variability of payments to suppliers and its impact on how risk is generated and propagates upstream. To do so, we model the financial features of a supply chain based on industry reports a...

Service growth in product firms is one of the most active service research domains and is open to a variety of conceptualizations. This article provides a critical inquiry into the past, present, and future of the research domain. The evolution of the research on service growth is discussed in two phases: (1) setting the boundaries of the research...

In the operations management literature, the financial risk in an inventory model is usually assumed to be captured by the (constant) weighted average cost of capital (WACC) of the firm. This assumption is, at best, an approximation, since this cost depends on the risk of the cash flows, which, in turn, depends on the inventory policy. We investiga...

A potential answer to retailer’s shelf out-of-stocks (OOS), where the item is in store but customers cannot find it, is to employ third-party service providers to execute audits and corrections. However, given the nontrivial cost of executing external audits, it is still necessary to assess whether external audits are capable of reducing shelf-OOS,...

Inventory record inaccuracy (IRI) is a pervasive problem in retailing and causes non-trivial profit loss. In response to retailers’ interest in identifying antecedents and consequences of IRI, we present a study that comprises multiple modeling initiatives. We first develop a dynamic simulation model to compare and contrast impacts of different ope...

The last decade and a half has seen significant efforts to develop and automate methods for identifying structural dominance in system dynamics models. To date, however, the interpretation and testing of these methods has been with small deterministic models (less than five stocks) that show smooth behavioral transitions. While the analysis of simp...

Staffing decisions are crucial for retailers since staffing levels affect store performance and labor-related expenses constitute one of the largest components of retailers’ operating costs. With the goal of improving staffing decisions and store performance, we develop a labor-planning framework using proprietary data from an apparel retail chain....

This document describes the current state of the Adversary Dynamics Modeling (ADM) project currently under development. Given the dynamic nature of the terrorist threat, the purpose of this modeling effort is to increase current understanding of adversarial decision-making processes and possible behavior in order to help guide countermeasure techno...

Inventory record inaccuracy (IRI) is a pervasive problem in retailing and causes non-trivial profit loss. In response to retailers’ interest in identifying antecedents and consequences of IRI, we present a study that comprises multiple modeling initiatives. We first develop a dynamic simulation model to compare and contrast impacts of different ope...

... The OM research community has a long tradition of dynamic modeling, going back at least to the pioneering work of Forrester (1958) and Holt, Modigliani, Muth and Simon (1960). These innovators recognized that even core processes in organizations, such as production and supply chain management, involve critical feedbacks with other organizationa...

Simulation modeling is increasingly integrated into research and policy analysis of complex sociotechnical systems in a variety of domains. Model-based analysis and policy design inform a range of applications in fields from economics to engineering to health care. This book offers a hands-on introduction to key analytical methods for dynamic model...

Eigenvalue elasticity analysis (EEA) is a set of methods to assess the effect of structure on behavior in dynamic models. It works by considering observed model behavior as a combination of characteristic behavior modes and by assessing the relative importance of particular elements of system structure in influencing these behavior modes. Elements...

Estimation of retail demand is critical to decisions about procuring, shipping, and shelving. The idea of Poisson demand process is central to retail inventory management and numerous studies suggest that negative binomial (NB) distribution characterize retail demand well. In this study we reassess the adequacy of estimating retail demand with the...

This article integrates research on rule development, compliance, and organizational change to model rule development and compliance in organizations, using causal-loop modeling from system dynamics to articulate explicitly a few key underlying processes. We focus on financial markets as a case area, suggesting that recurring regulatory problems in...

Two fundamental ideas underlying system dynamics are that modelers construct a closed boundary around the system of interest, with stocks, flows and feedback loops as the basic structural elements within this boundary (Forrester, 1968), and that the interaction of the structural elements represented by the model itself are responsible for generatin...

La actividad de las empresas presenta un nivel de complejidad tan elevado que ningún sistema automático lo puede abarcar completamente. Una adecuada utilización de la inteligencia humana, en complemento con los sistemas automáticos, puede ser un poderoso aliado y la clave para el éxito en este ámbito.

We take a production economics perspective to formulate a sales generating function that incorporates traffic and labor in retail stores. The estimation of this function is the basis for the development of a full system dynamics model that will enable managers to take a holistic view on labor planning process. To recover the structural parameters,...

Purpose: Investigating how the separation of the product and service business mediates the effect of management’s commitment to the service strategy on service performance in product manufacturing firms. Methodology: We surveyed 216 European manufacturers in the high-value durable equipment industry moving into the service business. After assessing...

As a follow up to Steve Morlidge’s series on Guiding Priciples in previous issues of Foresight, here the authors offer comments on the principles governing process design, particularly regarding the management of forecasting biases. Copyright International Institute of Forecasters, 2012

In most organizations, supply chain planning is a cross-functional effort. However, functional areas such as sales, marketing, finance, and operations traditionally specialize in portions of the planning activities, which results in conflicts over expectations, preferences, and priorities. We report findings from a detailed case analysis of a suppl...

Formal tools to link system dynamics model's structure to the system modes of behavior have recently become available. In this paper, we aim to expand the use of these tools to perform the model's policy analysis in a more structured and formal way than the exhaustive exploratory approaches used to date. We consider how a policy intervention (a par...

While the productivity and quality of manufactured products steadily improve, service sector productivity lags and quality has fallen. Many service organizations fall into “death spirals” in which pressure to boost throughput and control costs leads to worker burnout and corner cutting, lowering service quality , raising costs while revenue falls,...

To date, little research has been done on managing the organizational and political dimensions of generating and improving forecasts in corporate settings. We examine the implementation of a supply chain planning process at a consumer electronics company, concentrating on the forecasting approach around which the process revolves. Our analysis focu...

We provide a review of different approaches to linking model structure to observed behavior with a particular view towards using models for theory building. We identify four such approaches, namely the "classical" approach, the "pathway participation" approach, the "eigenvalue elasticity" approach, and the "eigenvector" approach, respectively. We o...

Glossary Definition of the Subject Introduction Characterizing Linear and Nonlinear Systems Traditional Control Theory Approaches Pathway Participation Metrics Eigenvalue Elasticity Analysis Eigenvectors and Dynamic Decomposition Weights (DDW) Future Directions Bibliography

We provide a review of different approaches to linking model structure to observed behaviour with a particular view towards using models for theory building. We argue that theory building cannot be based upon pure simulation and model building alone: the inference from system dynamics models invariably uses concepts and analogies from simple feedba...

Purpose The purpose of this paper is to articulate the challenges of learning and improving in service delivery systems – that present managers with imperfect information, confounded variables, and tightly coupled interactions between operational and psychological factors – and present a simulator to assist managers to overcome these challenges. D...

This article lays out several hypotheses to establish a specific link between structural economic reforms and the competitive environment of firms. We test our hypotheses on data from the steel industry in three post-reform economies. We find that economic reforms tend to have a positive effect on environmental munificence, but they also produce sh...

We explore the application of loop eigenvalue elasticity analysis (LEEA) to three different models in order to assess the potential of the method for generating insights about model behavior and to uncover issues in developing the method further. The results indicate that the utility of the method depends upon the character of the model and dynamic...

We describe how organizational biases arise from the different incentives, agendas, and blind spots of the various functional areas of a business, and how they compromise forecast accuracy and disrupt the supply chain process. They present a case study – the Leitax corporation – of how one organization successfully used consensus forecasting to man...

We evaluate, in an experiment with the Beer Distribution Game, a complementary behavioral source of the bullwhip effect that has been previously ignored in the literature: overreaction to backlogs. By separating the estimation of the response to inventory and backlog, we find that players treat backlog differently than inventory. Contrary to our ex...

Focusing on the special case of changes triggered by profound economic reforms in emerging economies, we suggest a new perspective from which to explore the relationship between environmental and organizational change. This research setting is used to explore and propose enhancements to existing theory that take into account how organizations respo...

An updated version of this paper has been accepted for publication: Oliva, R., Abdulla, H., and P. Goncalves. 2021. Do managers overreact when in backlog?Evidence of scope neglect from a supply chain experiment.Manufacturing & Service Operations Management (forthcoming). Available from: https://www.researchgate.net/publication/356645824_Do_manag...

This paper uses a system dynamics model to analyze rule compliance in organizations. The analysis takes securities regulation as an illustrative case but applies to other private, nonprofit, and public activities complying with rules overseen by external bodies in the course of producing goods and services. We consider how three levels of behavior—...

The argument of this article is that it is possible to focus on the structural complexity of system dynamics models to design a partition strategy that maximizes the test points between the model and the real world, and a calibration sequence that permits an incremental development of model confidence. It further argues that graph theory could be us...

Two approaches have been developed to establish a formal link between system structure and behavior. Eigenvalue elasticity approaches take a system-wide perspective and have been based either on ad-hoc selection of loops (Forrester 1982; Kampmann 1996)—resulting in non-generalizable explanations—or on loops formed by the aggregate paths between sta...

Many e-businesses have pursued a ‘get big fast’ (GBF) strategy, pricing low and marketing heavily to build their user base, in the belief that there were significant sources of increasing returns favoring early entrants and large players. Until early 2000 the capital markets rewarded the GBF strategy, but since then market values have collapsed and...

Management literature is almost unanimous in suggesting to manufacturers that they should integrate services into their core product offering. The literature, however, is surprisingly sparse in describing to what extent services should be integrated, how this integration should be carried out, or in detailing the challenges inherent in the transiti...

System dynamics models are becoming increasingly common in the analysis of policy and managerial issues. The usefulness of these models is predicated on their ability to link observable patterns of behavior to micro-level structure and decision-making processes. This paper posits that model calibration––the process of estimating the model parameter...

This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.

Over the last decade, Latin American economies and companies have witnessed substantial changes as their economies have been reformed and opened to world markets. Firms that have adapted to these changes may have useful lessons to offer to companies in other countries as they face economic transformation and expanding competition.

Geoff Coyle has recently posed the question as to whether or not there may be situations in which computer simulation adds no value beyond that gained from qualitative causal-loop mapping. We argue that simulation nearly always adds value, even in the face of significant uncertainties about data and the formulation of soft variables. This value der...

The erosion of service quality throughout the economy is a frequent concern in the popular press. The American Customer Satisfaction Index for services fell in 2000 to 69.4%, down 5 percentage points from 1994. We hypothesize that the characteristics of services---inseparability, intangibility, and labor intensity---interact with management practic...

This article explores how service organizations respond to changes in work pressure, why they respond the way they do, and what managers can do about it. The system dynamics method captures the organizational and behavioral components of the social systems that produce and consume services, as well as the physical characteristics of the service del...

Many companies are expanding into services in the search for higher margins, but customer satisfaction appears to be falling. Rogelio Oliva identifies the traits needed for success.

Process improvement has become an imperative for businesses seeking competitive advantage. However, firms often experience difficulties in both gaining acceptance for improvement programs and sustaining them them, particularly in product development. We describe a theory to explain the initiation and sustainability of process improvement teams in p...

Despite the demonstrated benefits of improvement programs such as total quality management and reengineering, most improvement programs end in failure. Companies have found it extremely difficult to sustain even initially successful process improvement programs. Even more puzzling, successful improvement programs sometimes worsen business performan...

This paper makes a theoretical case for using these two systems approaches together. The theoretical and methodological assumptions of system dynamics (SD) and soft system methodology (SSM) are briefly described and a partial critique is presented. SSM generates and represents diverse perspectives on a problem situation and addresses the socio-poli...

Firms frequently undertake multiple improvement programs simultaneously and in sequence. To understand the implications of implementing multiple programs, this study explores the histories of individual programs and the interplay across programs at one research site. This site has been highly successful, but of equal if not greater importance to th...

This paper is part of a series of studies on the subject of continuous improvement programs written by members of the System Dynamics Group at the Sloan School of Management at MIT. The research is supported through funding by the Transformations to Quality Organizations program of the National Science Foundation and by the partner corporations (Jo...

The purpose of this paper is two fold. The first is to structure the thinking and theories about managerial learning laboratories as held by the MIT Organizational Learning Center. The second purpose is to go beyond the utilization of management flight simulators and redefine those theories based on the experience of implementing five managerial le...