Thursday, February 27, 2014

Dave Madsen of WGGB Gives Fascinating Lecture on Disaster News Coverage at the Isenberg School of Management

We have amazing professionals in our community, several of whom have delivered guest lectures in the Humanitarian Logistics and Healthcare course that I am teaching this semester at the Isenberg School. For this I am extremely grateful as are my students.

Since I believe in disseminating information - yes, Nicholas Kristof of The New York Times, there are quite a few of us academics who interact with the public, through our blogs, public forums and venues, OpEds, etc., (and  this, I promise,  will be a topic of a future blogpost) -  I present some of the highlights of another brilliant lecture today with photos.

Today, we hosted Mr. Dave Madsen, who is the Anchor and Managing Editor at WGGB - abc40 and he went to UMass Amherst! He has over 40 years of news broadcasting experience - imagine! Today, he shared with us his coverage of such major news events as 9/11 and the June 1, 2011 tornado that struck Springfield and covered 35 miles. He was also on the job in 1979 when a tornado hit Windsor Locks in neighboring Connecticut and the power in their newsroom went off. He spoke of newsreels, the advent of video, and the Internet, and the impacts on news.

Mr. Madsen grew up in western MA, and had a great story of being paid $3 per hour while doing data processing at Whitmore (this is the UMass Administration building) as a student with big IBM computers but the lure of broadcasting at $2 per hour, even after a counteroffer of $4 per hour, was a wise decision that he made, although his mother was not pleased at the time.

He told of how, as a young boy, he recalled (and this led him, in part, to pursue a career in news), when Ted Kennedy, then a young senator, at age 32, was in a plane that crashed in Southhampton, Madsen's hometown, in 1964, only months after the assassination of President John F. Kennedy. He showed us a news video from that event and followed up with some of his dramatic reports.

He emphasized the impact of technology on news coverage including that of social media.

He also noted how many of his interns come from UMass Amherst and what a great work ethic our students have - I agree!

He left the Isenberg School at about 11AM and then we just had to see him do the noon news broadcast -- the consummate professional.

We thank Dave Madsen  for his mesmerizing lecture complete with a video of the 2011 tornado and his reporting of the shutdown of the US airspace after 9/11, the controlled evacuation of our Bradley airport, and the important role that a news broadcaster plays in giving information out to the public and also in calming them in times of disasters.He even spoke of the "controlled chaos" in the newsroom during such times. He also noted that journalists and broadcasters used to check 3 sources - and now with the 24/7 news cycle and even news streaming on the Internet this may not occur.

Also, we are glad that he stayed in western Massachusetts, where he was born and raised,  since he serves the viewers so well and is truly the face of news in the Pioneer Valley!

Tuesday, February 25, 2014

Thanks to Dr. Pierre Rouzier for Sharing with Us Experiences from Haiti to the Boston Marathon Bombings

Today, we were mesmerized by the lecture given by Dr. Pierre Rouzier of the UMass University Health Services, who is also a team doctor. Dr. Rouzier shared with us, in the Humanitarian Logistics and Healthcare class that I teach at the Isenberg School of Management,  his work post the January 12, 2010 Haiti earthquake and his life-saving efforts during last year's Boston Marathon bombings on April 15, 2013, where he was serving as a sports medicine expert volunteer.
His lecture was very dynamic and his presentation was filled with photographs of the people that he worked with both in Haiti and in Boston and of those  that he met that have made these two events forever ingrained in his memory and in the way we look at the world today, which is riddled with disasters, both man-made and natural. He told us how he stayed with a woman post the bombing who told him that she did not want to die alone.
His love of people, selflessness, intellect and courage during triage and times of great stress and uncertainty, captivated us.

He is the author not only of a sports medicine book but even of a recent children's book, Henry Gets Moving,  to help children stay in shape. He spoke of poverty, of inequality, and of the PTSD that he has experienced serving in these extremely difficult disasters. He also spoke of his efforts to raise funds for the recovery in Haiti and how he bicycled last summer hundreds of miles in Iowa to raise funds for the Boston Marathon bombing victims wearing his Boston Strong t-shirt.

He also spoke about how he discovered his love of teaching and will return to Haiti to teach sports medicine this summer. His father was Haitian but immigrated to the U.S. Dr. Rouzier's dream is to build a facility in Haiti that will inspire children through sports, especially, soccer, with a sports medicine clinic, and employment opportunities for families of the young athletes.

Dr. Rouzier's humanity and humanitarianism is an inspiration for all of us. How lucky are we at UMass Amherst to have such a hero and role model in our midst.

Friday, February 21, 2014

A Truly Inspiring Lecture by Mr. Rick Lee of the Red Cross at the Isenberg School

Yesterday, we had the distinct honor and privilege of hearing from Mr. Rick Lee, the Executive Director of the American Red Cross, Pioneer Valley Chapter.  He was a guest lecturer in the Humanitarian Logistics and Healthcare course that I am teaching this semester at the Isenberg School of Management.
Mr. Lee oversees 38 employees and 1,000 volunteers and was instrumental in the development of the Service to the Armed Forces (SAF) program with a focus on communications.

We heard about Henri Dunant, the Swiss businessman,  who led what became the international Red Cross movement in the mid 1800s, received a Nobel Peace Prize, but then lost his business and died as a penniless hermit in Switzerland. Mr. Lee spoke about the Geneva Convention and how it is imperative to inject humanity in the inhumane act of war. He also spoke about the amazing Clara Barton, all 5 feet and 90 pounds of her, who, after a trip to Switzerland, realized what needed to be done and, through her incredible leadership abilities, founded the American Red Cross. She did so in 1881 at age 60 and continued to lead it for 23 years!

The foundation of the Red Cross is trust and ethics and contact with donors and volunteers. The provisioning of food, shelter, evaluation of how bad it is, and communications to the public, are all aspects of Red Cross activities in disaster relief. Mr. Lee also emphasized that disaster relief is "a team sport." Interestingly, he also said that there is emphasis now on mitigation, as well.

We heard of the lessons learned from Hurricane Katrina and the need to understand different community groups and their roles as well as the great importance of communications with stakeholders.

We were very surprised to learn that since the Red Cross depends on financial donations, that if these were to stop, the Red Cross would shut down in only 180 days! My former doctoral students, who are now very successful international professors, Dr. Tina Wakolbinger and Dr. Fuminori Toyasaki, have done research on the modeling of financial flow of funds for disaster relief and the earmarking of donations.

We also heard about the tremendous role that the Red Cross played in sheltering and feeding hundreds of people for a month after the tornado hit Springfield, MA on June 1, 2011. He also emphasized how helpful private organizations are and can be in disaster relief by providing discounts for much-needed supplies, warehousing between disasters, and helping with deliveries. He singled out Walmart and Big-Y supermarkets and even noted hotels and motels who provide discounts for sheltering purposes.

He also emphasized the importance of buying locally and the importance of building relationships over time so that,  when disasters strike, one is ready. He even told us of free mobile apps for first aid and emergency preparedness offered by the Red Cross, including earthquake and tornado warning apps.

What is the power of one person? Clara Barton changed the world and over a century before the Internet. her impact continues to this day.

Mr. Lee, your presentation changed all of us. Thank you for being the heart and soul of our American Red Cross and our Hometown Hero!

Thursday, February 20, 2014

I am Ukrainian and Canadian and American

I was at an optimization conference in Florida when the violence in Ukraine started to escalate and, coincidentally, two other U.S.-based faculty, who were also at the conference, but were born in Ukraine, brought this news to my attention.

Since my return to Amherst the news in Ukraine has only gotten worse with horrifying bloodshed and deaths and with many vivid reports -- see the one by Frida Ghitis, writing for CNN, with whom I have communicated.
The country of my parents, Ukraine, and that of my first language, is now frontpage news not only in the European press but also in the U.S.

I was born in Canada but did not learn how to speak English until we immigrated to the U.S., and I entered kindergarten.  Ukrainian was the language that we spoke at home. I, finally, visited Ukraine, when  I was invited to give a keynote talk in Yalta in August 2010 at the Network Science conference.

I first made a stop in Kiev,  now the epicenter of the demonstrations, which began in November, and which have reached a tipping point this week because of the frustration of the people.

Below are some photos from Kiev, where I was welcomed by a colleague from the University of Pittsbrugh, and ate the most delicious borshcht in my life and the same for the varenyky!
Yalta, the site of the conference, was spectacular as the photos below reveal and another location of historical importance plus the conference was fantastic!
Given the suffering in Ukraine, and that even one of my former doctoral students at the Isenberg School, Dmytro Matsypura, who is now tenured at the School of Business at the University of Sydney in Australia, took part in the Orange Revolution in Ukraine in 2004, I had to speak out.

Please, let the people be free. The government should protect its own citizens and let them be governed as they wish to be.  Look at how brilliantly Poland is doing, Ukraine's neighbor to the west.

Yesterday, after not much sleep, since I had returned from the Florida conference in the wee hours of the morn, I gathered some beautiful Ukrainian creations and photographed them. I display them below -- from our Easter eggs, to our ceramics, to lavish embroideries. Let's make peace and have art, beauty, and science rule instead of hatred and violence.

I am Ukrainian and Canadian and American.

Wednesday, February 19, 2014

Fabulous Optimization Conference in Florida Plus a Too Exciting Plane Landing

I returned from Gainesville,  Florida this morning about 1:30AM on a two-legged flight through Charlotte to Bradley airport in Hartford/Springfield and was greeted with more snow.  The flight from Gainesville to Charlotte on a puddle jumper plane was rather exciting since the pilot announced that our wingflaps would not go down (this was a first for me and I have written about various flying adventures on this blog). We were to land going very fast, he announced, and, as we were landing, I could see the pageant of firetrucks that were there to welcome us. As we taxied I was amazed at the number of fire trucks that were on both sides of us with flashing lights. I was waiting to smell smoke but that did not happen. We were asked whether we needed "Customer Service" after the experience and when the pilot exited the cockpit I thought that he could be one of my undergraduates at the Isenberg School.  Great job - we made it safely and that is what counts. My flight from Charlotte to Bradley was uneventful and I enjoyed speaking with a UConn student who was returning from a med school interview.

I had been in Florida for two days to attend and speak at the Learning and Intelligent Optimization (LION 8) Conference that was organized by Professor Panos M. Pardalos of the University of Florida and Dr. Mauricio Resende of AT&T Labs Research with great support provided by Dr. Pardalos' doctoral students.

Panos, as some of you may have heard, was recently appointed a Preeminent Chair at the University of Florida for his work in Big Data. Bravo, bravo, bravissimo. Coincidentally, just one year ago, I was with Panos and other luminaries at the AAAS Symposium Dynamics of Disasters in very cold Boston.

Speakers and participants came to the optimization conference in Gainesville from Japan, Russia, Singapore, China, Sweden, Italy, Germany, Franc, Ireland, Australia, Greece, Colombia, Canada, Spain, and the U.S.

The venue was lovely and warm and it was great to get away from the white stuff (snow), albeit for only two days. The audience consisted primarily of operations researchers, computer scientists, and engineers,  with papers ranging from models  to algorithms with interesting directions such as portfolios of algorithms and configuration optimization for solvers. 

On Monday I enjoyed the first (invited) talk given by Dr. Vijay Vazirani of Georgia Tech who spoke on Linear Complementarity Problems and Walrasian equilibria. I do find the continuing interplay among economics, operations research, and computer science exciting and intriguing. I brought to his attention the work of Dafermos and others in variational inequalities and the computation of equilibria, which has been a very active field over the past 20 years. Conferences such as this are so important for communication!

Many of the presentation slides are being made available by the authors and are being posted on the conference website, which is great.

I enjoyed giving my presentation on joint work with one of my doctoral students, Dong "Michelle" Li, entitled: "Equilibria and Dynamics of Supply Chain Network Competition with Information Asymmetry in Quality and Minimum Quality Standards."  Given last Friday's article in The New York Times on the global manufacturing of medicines and quality issues, the talk, I thought,  was quite timely.

The photos below were taken at the conference. It was great to engage the mind and also the soul with the warmth and beauty of the surroundings. We had lunches and the conference dinner outside. I see why people move to Florida, given this winter in the Northeast.

The food was fabulous, too.
As was the ambience both inside and outside.
Some had to sleep in the Atlanta airport, given the 10,000 flight cancellations last week in the U.S., because of the snow and ice, but everyone made it to the conference. One of our Russian colleagues, did laps in the pool above at 7AM.

Although the Springer books and journals arrived yesterday, it was so nice to see our book, Networks Against Time: Supply Chain Analytics for Perishable Products, that I co-authored with Dr. Min Yu, Dr. Amir H. Masoumi (both my former doctoral students), and the other "Professor Nagurney," Dr. Ladimer S. Nagurney, on display. It was also wonderful to meet Ramzia Amad from Springer, who was a Math major in college and was also attending the conference. Our book survived Superstorm Sandy last year and was emailed and then the Springer offices closed. But we are resilient!

Thanks to the organizers for bringing researchers from around the globe with a passion for models, algorithms, and computations together!

Saturday, February 15, 2014

Olympic Miracle on Ice in Sochi Thanks to Former UMass Hockey Goalie Jonathan Quick With Help from T.J. Oshie

This morning I have been working on the presentation that I will be giving at the INFORMS Conference on Business Analytics  & Operations Research that will take place March 30-April 1 in Boston.  The speakers are to deliver their presentations in pdf format to INFORMS by February 24 and they will be distributed to the registrants.

But since the US was playing Russia in men's hockey this morning, live on television, I could not resist spending a few minutes watching the game which went into a thrilling overtime.

The US Olympic team goalie is none other than Jonathan Quick, who played on the UMass Amherst hockey team and we would enjoy watching him at our great Mullins Center.
And Jonathan Quick is not the only Olympian who was a student at UMass Amherst at these Winter Games in Sochi - Thomas Pock is as well and he is playing for the Austrian hockey team.  UMass produced the nice graphic above and you can read more about our former students in this nice press release.

Today's game against Russia was a thriller - it went into overtime and then, thanks to the former North Dakota student, T.J. Oshie, 4 of his 6 shots made it in!

Since my daughter was a competitive figure skater we spent a lot of time on various ice rinks, including the ones at Lake Placid, where the Miracle on Ice took place back at the 1980 Olympics with a relatively young US hockey team beating the Russians. 
My daughter even had a chance to skate with the Olympian Johnny Weir in an ice show at Lake Placid a few years ago and we met his mother. 
Weir is an announcer now at this Olympics in Sochi and is doing a great job (although the US men did not medal except for the bronze in the new team event (with women)).

Friday, February 14, 2014

Because It's Valentine's Day!

After a departmental meeting to evaluate PhD applicants, I came home to a bouquet of roses. They are so beautiful and bright and such a contrast to our white snowy landscape outside I thought I would preserve the beauty in the photograph below.
For those of us who love logistics and supply chains, the following graphic was brought to our attention through The Operations Room blog:  Supply Chain 24/7 (The Logistics of Delivering Fresh Roses In Time for Valentine’s Day, Feb 13:
More about  this special day on Dr. Laura McLay's highlights on operations research and finding love.

Wednesday, February 12, 2014

Will Our Speaker Make It - Drama of Extreme Weather Events and Transportation Disruptions

*************An Update*******************

Dr. Laurie Garrow has had to cancel her presentation this Friday at the Isenberg School because of the major weather events in Atlanta and headed our way with thousands of flights cancelled.

The latest weather news is hard to miss with CNN's headlines with descriptions such as potentially catastrophic event. And this forecasted icestorm follows only two weeks after the snowstorm in Atlanta that brought the city to a halt with big political ramifications as well.

I am teaching my Humanitarian Logistics and Healthcare class at the Isenberg School this semester and we certainly have had a lot of interesting real-life events to discuss, almost in real-time!

This Friday, we are to host Dr. Laurie Garrow of Georgia Tech, who is also the immediate Past President of the Transportation & Logistics Society of INFORMS.

She is to be speaking in our UMass Amherst INFORMS Speaker Series, which I help our great students to organize.

Georgia Tech closed on Tuesday and I see that it is also closed today, Wednesday, February 12.

USA Today has the headlines:

Most Atlanta flights axed for Wednesday as cancellations soar

and I heard, yesterday,  from Dr. Garrow that several of her flights were cancelled on Delta for tomorrow, when she is planning on flying to our area so that she can speak on Friday. She managed to rebook and has reservations on a mid-afternoon flight. Now the weather in western MA will not be propitious tomorrow either.

 The costs to travellers this January because of the flight disruptions has been immense. 

We will have to wait and see -- Will the show go on? We were planning on a nice reception prior to her talk at the Isenberg School (some of you many have noticed that this Friday is also Valentine's Day).

We in operations research and management science are good at disruption management so, provided that UMass Amherst is still open, we hope to still have some event, if only a small substitute.

We will keep you informed and, in the meantime, stay safe, wherever you may be!

Saturday, February 8, 2014

Lean In -- Inaugural Women of Isenberg Conference Was Terrific!

Although the weather this morning was frigid that did not stop about 150 of us from attending the 2014 Inaugural Women of Isenberg Conference, which took place at the Isenberg School of Management at UMass Amherst.

It was a terrific event and brought together undergrad and grad students, alums, faculty, and staff to hear from outstanding female professionals, including the Keynote Speaker, Susan C. Hammond.

Our Undergraduate Dean, Dr. Linda Shea, had opening remarks, which set the wonderful tone for the day.

There was also a panel this morning of 4 Target employees. Target was one of the sponsors.

I very much enjoyed the morning session on Lean In and it was great to see former students, one of whom, Christina Calvaneso, drove up this morning from NYC.

I took copious notes and enjoyed the sharing of professional stories and pearls of wisdom.

Some of my favorites:
  • Define your own success;
  • Don't undervalue yourself and others;
  • Write thank you notes;
  • Look for mentors and use them;
  • Don't work in environments that violate your values;
  • Have goals, take on hard challenges, be patient, and put in the work, and
  • Build and surround yourself with a great team.
Also, students were told to take advantage of all the great clubs and leadership opportunities. This very much resonated with me since I have been serving as the Faculty Advisor to the UMass Amherst INFORMS Student Chapter for a decade now.

Below are some photos that I took at this very special conference:
The food was also great.
And, for those of you who may be wondering, there were a few males in attendance, including several husbands who came to support their spouses who gave talks.

Congratulations to the organizers and especially to the Isenberg Women in Business, which did a great job in the planning and execution of this event!

Thursday, February 6, 2014

Congrats to 2014 Newly Elected National Academy of Engineering Members - a Great List with Operations Research represented

After teaching my Humanitarian Logistics and healthcare class this morning I heard the great news.

Today the National Academy of Engineering announced its 2014 list of newly elected members and what a terrific list it is! 

Time to celebrate.

On the list are several individuals that are well-known in Operations Research and Analytics circles and I am so happy for them -- they are great individuals. Their citations are below

Dr. Carlos Daganzo, Chancellor Professor of the Graduate School, and retired Robert Horonjeff Chair in Civil and Environmental Engineering, University of California, Berkeley.  For engineering contributions to traffic, transportation, and logistics systems and operations.

Dr. Brenda Dietrich,  IBM Fellow and vice president, and chief technology officer for Business Analytics Software, IBM, Somers, N.Y.  For contributions to engineering algorithms, frameworks, and tools to solve complex business problems.

Dr. Wallace Hopp, senior associate dean for faculty and research, Herrick Professor of Business, professor of technology and operations, and professor of industrial and operations engineering, University of Michigan, Ann Arbor.  For creating and applying fundamental engineering principles governing the underlying behavior of manufacturing systems and supply chains,

Dr. Alex "Sandy" Pentland, Toshiba Professor of Media, Arts, and Sciences; and director, Human Dynamics Laboratory and Media Lab Entrepreneurship Program, Massachusetts Institute of Technology, Cambridge.  For contributions to computer vision and technologies for measuring human social behavior.
Dr. Daganzo is the recipient of the Robert Herman Lifetime Achievement Award in Transportation Science, which he received at the INFORMS Minneapolis Meeting in October 2013.

Both Dr. Dietrich and Dr. Pentland have spoken in our UMass Amherst INFORMS Speaker Series at the Isenberg School of Management plus they were plenary speakers at the First Northeast Regional INFORMS Conference held at UMass Amherst in May 2011, which I helped to organize with Dr. Hari Balasubramanian of UMass Amherst and Dr. Les Servi of MITRE. A blogpost and photos are available here.

I have also interacted with Dr. Pentland on other occasions, including the SBP set of conferences in which I served as a tutorial chair for several years and he gave a fabulous tutorial!

Special congrats also to Dr. Hopp for his great work and much-deserved recognition.

*******Plus, an update from the INFORMS homepage, congrats  also to INFORMS member:  Dr. Stephen Boyd,  Samsung Professor in the School of Engineering; and professor, Information Systems Laboratory, department of electrical engineering, Stanford University, Stanford, Calif.  For contributions to engineering design and analysis via convex optimization.********

Tuesday, February 4, 2014

Emergency Management and Business Continuity at Universities - An Amazing Lecture

When is the last time that you sat at the edge of your seat listening to a guest lecture?!

This morning, I had the privilege and honor of hosting Mr. Jeff Hescock, the Director for Emergency Management and Business Continuity at UMass Amherst. This is just one of his titles since he also continues in his role at the President's Office (the UMass President, that is, Dr. Robert Caret, who oversees our 5 campuses).

Mr. Hescock was a guest lecturer in my Humanitarian Logistics and Healthcare class at the Isenberg School and today he spoke on Emergency Management.
 His lecture was so fascinating that I asked him for permission to post his slides, which he gave, and which you can download and view here.

Mr. Hescock spoke on the various phases of emergency management and then discussed his experiences after the Boston marathon bombings on April 15, 2013, when it became known that one of the suspects was a UMass Dartmouth student. He spoke on the evacuation of that campus and also on the ultimate capture and arrest in Watertown and how Boston and surrounding areas were, literally, on lockdown. I will never forget this terrorist attack and blogged about it since I knew two runners at the marathon and also Dr. Pierre Rouzier, a UMass Amherst doctor, who has assisted in multiple Boston marathons, was at that one, too, and saved lives. He will be speaking to my students in my class later this month.

Mr. Hescock spoke about how important it is to protect the academics, research, and reputation of a university and the roles that emergency management plays in these. We learned so much from him and how he acts as a coordinator with student services, housing, food services, UMass police, etc., in the case of an emergency. He spoke about "table-top" planning and scenario exercises and also real-life simulations.. There will be a shelter simulation at the Mullins Center in April and we hope to be able to attend and experience that.

Interestingly, he also spoke about grant-writing in order to cover costs of various training exercises, which are so important. I also found it fascinating to hear him speak about cybersecurity -- clearly critical for business conitnuity in a university.

If you have a chance, do look at his presentation.

The photos below were taken this morning during and post his lecture.
 Many, many thanks to Mr. Hescock for sharing with us today his incredible expertise and practical know-how in keeping universities safe and secure.

Monday, February 3, 2014

Do You Know Where Your Meds and Other Products Came From - Information Asymmetry in Quality

I am excited about speaking at the upcoming  Learning and Intelligent Optimization (LION 8)  Conference in Gainesville, Florida later this month, especially since the snow is again falling in Massachusetts with more to come!

I am also excited because this will be the first time that I will be presenting the paper, "Equilibria and Dynamics of Supply Chain Network Competition with Information Asymmetry in Quality and Minimum Quality Standards," joint with one of my doctoral students, Dong "Michelle" Li.

Quality of products, especially those that one ingests, from pharmaceuticals to food and even, in a sense, human blood (and I am not talking about vampires here), is a topic of great concern and one that we have been researching for a while now.

Do you know where your medicines, for example,  are coming from?

As we noted in our earlier paper,  Pharmaceutical Supply Chain Networks with Outsourcing Under Price and Quality Competition, Anna Nagurney, Dong Li, and Ladimer S. Nagurney, International Transactions in Operational Research 20(6): (2013) pp 859-888, up to 40% of the drugs that Americans take are now imported, and more than 80% of the active ingredients for drugs sold in the United States are outsourced, often to countries such as India and China. The problem is that there may not be sufficient oversight and lack of quality standards.

Furthermore, the manufacturing of products, including pharmaceuticals, may take place in multiple manufacturing plants, so one may have no idea as to the place of production or the level of quaality!

In our new paper, which focuses on quality competition under information asymmetry, we were inspired by the work of the Nobel laureate George Akerlof and his classical paper 1970 paper (which got rejected 3 times by journals, before it finally got accepted and for which he earned the Nobel prize):  "The market for `lemons': Quality uncertainty and the market mechanism," Quarterly Journal of Economics, 84(3), 488-500. Akerlof shared the Nobel with Professor Joseph Stiglitz and Michael Spence.

In our paper, we construct a  supply chain network model with information asymmetry in product quality. The competing, profit-maximizing firms with, possibly,  multiple manufacturing plants, which may be located on-shore or off-shore, are aware of the quality of the product that they produce but consumers, at the demand markets, only know the average quality. Such a framework is relevant to products ranging from certain foods to pharmaceuticals. We propose both an equilibrium model and its dynamic counterpart and demonstrate how minimum quality standards can be incorporated. Qualitative results as well as an algorithm are presented, along with convergence results. The numerical examples, accompanied by sensitivity analysis, reveal interesting results and insights for firms, consumers, as well as policy-makers, who impose the minimum quality standards.

Specifically, we find from the computations the following.  Since consumers at the demand market do not differentiate between the products from different firms, and there is information asymmetry in quality between the firms (sellers) and the consumers (buyers) at the demand market, the average quality level at the demand market, as well as the price, which is determined by the quality levels of both firms, is for both firms' products. Firms  prefer a higher average quality, since, at the same demand level, a higher average quality results in a higher price of the product.

However, once a firm increases its own quality level, of course, the average quality level and, hence, the price  increases, but its total cost will also increase due to the higher quality. Furthermore, the price increase is not only for the firm's own product, but also for its competitor's product. If a firm increases its own quality, both the firm and its competitor would get the benefits of the price increase, but only the firm itself would pay for the quality improvement. Thus, a firm prefers a “free ride,” that is, it prefers that the other firm improve its product quality and, hence, the price, rather than have it increase its own quality.

Consequently, a firm may not be willing to increase its quality levels, while the other firm is, unless it is beneficial both cost-wise and profit-wise. This explains why, as the minimum quality standard of one firm increases, its competitor's quality level increases slightly or  remains the same.

When there is an enforced higher minimum quality standard imposed on a firm's plant(s), the firm is forced to achieve a higher quality level, which may bring its own profit down but raise the competitor's profit, even though the latter firm may actually  face a lower minimum quality standard. When the minimum quality standard of a firm increases to a very high value, but that of its competitor is low, the former firm will not be able to afford the high associated cost with decreasing profit, and, hence, it will produce no product for the demand market and will be forced to leave the market.

The above results and discussion indicate the same result, but in a much more general supply chain network context, as found in Ronnen (1991), who, in speaking about minimum quality standards,   noted that: ``low-quality sellers can be better off ... and high-quality sellers are worse off." Also the computational results support the statement on page 490 in Akerlof (1970) that ``good cars may be driven out of the market by lemons." Moreover, our results also show that the lower the competitor's quality level, the more harmful the competitor is to the firm with the high minimum quality standard. The implications of the sensitivity analysis for policy-makers are clear -- the imposition of a one-sided quality standard can have a negative impact on the firm in one's region (or country). Moreover, policy-makers, who are concerned about the products at particular demand markets,  should prevent firms located in regions with very low minimum quality standards from entering the market; otherwise, they may not only bring the average quality level at the demand market(s) down and hurt the consumers, but such products may also harm the profits of the other firms with much higher quality levels and even drive them out of the market.

Therefore, it would be beneficial and fair for both firms and consumers if the policy-makers at the same or different regions or even countries could impose the same or at least similar minimum quality standards on plants serving the same demand market(s). In addition, the minimum quality standards should be such that they will not negatively impact either the high quality firms' survival or the  consumers at the demand market(s).