UC Irvine

Motivated by recent advances in technologies and big data analytics, this dissertation consists of three essays on operations management. The first essay investigates the firm's technology choice under product quality uncertainty. We propose a three-stage game to study how a firm should choose between a mature technology and an innovative technology in upgrading an existing product, where the level of quality improvement is jointly determined by two attributes -- one is determined by the firm, and the other is outside of the firm's control. We characterize conditions under which each technology is more likely to be adopted.

The second essay empirically investigates how customer email engagement affects the profitability of subscription-based service providers. We analyze the outcome of a field experiment conducted by a large U.S. car wash chain, which offers tiered subscription services to consumers and employs an RFID-based technology to track subscriber service events. We apply survival analysis and difference-in-differences methods to estimate the effects of email engagement on subscribers' retention and service consumption. We find that a one-month engagement with two emails separated by a half-month interval increased the likelihood of subscriber retention by 7.4% five months after the experiment started and decreased the subscriber churn odds by 26.3% for the entire five-month duration. Meanwhile, we find that the same engagement increased a subscriber's per-period service consumption by 8.8%. Our study highlights that email engagement is a double-edged sword—it increases both customer retention and service consumption, and it may decrease profitability when the increased operating cost to serve retained customers outweighs the benefit of customer retention.

The third essay empirically examines the impact of curated box retailing, i.e., shipments of retailer-selected products seeking to surprise and delight customers at regular intervals. We conducted a field experiment to analyze curated box retailing’s impact on a leading retailer. We randomly selected 580 customers to receive curated boxes for two consecutive months and post-treatment observation for another seven months. Each box contained exactly six items for product sampling and purchase. We find that monthly dispatch of one curated box for two months substantially increased overall product sales in all retail channels and caused positive cross-channel demand spillovers to the online and home try-on sales. At the same time, curated box retailing led to a reduction in excessive product sampling and returns in the home try-on channel. Our research provides implications for retailers in adopting and optimizing the curated box retailing strategy.