Research@Smith
January 2008
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2
Finance
Seasonality in Stock
Market Returns
4
Marketing
Consumer
Vigilance Against
Manipulation
6
Electronic
Markets
When Silence
Speaks Louder
Than Words
Research@Smith
VOL
NO
9 1
Research@Smith summarizes research conducted by the
faculty of the Robert H. Smith School of Business at the
University of Maryland.
Research@Smith is published three times a year by the
Robert H. Smith School of Business, University of Maryland;
3570 Van Munching Hall, College Park, MD 20742.
www.rhsmith.umd.edu
Dean
Howard Frank
Senior Associate Dean
G. Anandalingam
Director of Research
Michael Ball
Editor
Rebecca Winner
Contributing Writer
Donna K. Lin, MBA Candidate ‘09
Design
Lori Newman
PhotographY
Lisa Helfert, JOUR ‘92
We’d like to put Research@Smith directly into the hands of
faculty and administrators who are interested in learning
about the latest research conducted by Smith School
faculty. To request a copy of this publication or make an
address correction, contact the editor via e-mail,
editor@rhsmith.umd.edu, or phone, 301.405.9465.
Visit the Smith Research Network:
www.rhsmith.umd.edu/smithresearch/
Research@Smith
JANUARY 2008
Seasonality in Stock Market Returns
VOL
NO
9 1
page 2
Research by Steve Heston
A permanent seasonal effect of expected returns brings
a surprising predictability to stock market returns.
Vigilant Against Manipulation
page 4
Research by Amna Kirmani
How a consumer thinks about his goals affects the way
he thinks about your advertising.
Estimating Trading Risks through Online Feedback
page 6
Research by Chrysanthos Dellarocas
Silence in online feedback speaks louder than words.
Center for Excellence in Service page 8
Faculty Awards and Honors
page 10
Featured Researchers
page 11
Smith School INFORMS Fellows page 12
Seasonality
in stock market
returns
A permanent seasonal effect of expected
returns brings a surprising predictability to
stock market returns.
S
easonality in the economy is an old idea. It is
Heston formed winner-loser decile spreads based on
expected that retail sales go up in November for
the average monthly return of stocks over various
Christmas, or that snow tires sell better in October
historical periods and measured the returns over
than in May. Seasonality in the stock market has also
subsequent months. Then, to exploit seasonal
been explored before—historically, the stock market
variation, he sorted stocks based on their returns in
has gone up more in January than in other months,
each individual calendar month—historical Januaries,
a phenomenon known as the January effect. But
historical Februaries and so on.
recent research by Steve Heston, associate professor
of finance, is the first to show evidence of seasonality
Heston found that stocks with high historical returns
in one stock relative to other stocks. In a forthcoming
in a particular calendar month tend to have high
paper he models a permanent seasonal effect of
future returns in that same calendar month, earning
expected returns that is tied to the month of the year.
high expected returns every February or July or
October, for example. These strategies produced
Heston and co-author Ronnie Sadka, University of
statistically significant positive returns for up to 20
Chicago, set out to detect seasonal variation in the
years. The results held true across industries, across
cross-section of expected stock returns. The study
different sizes of companies, and independent of
uses almost 40 years of monthly returns—from 1963
earnings announcements. The seasonal effect is
to 2002—for NYSE/AMEX-listed firms. Rather than
positive in all 12 calendar months, but it is particularly
being constant over an entire year or over a period
high in January and above average in October
of several months, the model allows expected returns
and December.
to vary separately across different calendar months—
each January, each February, each March, and so
The results were so unexpected that when Heston
on. Applying this methodology to separate calendar
first saw them he was convinced they were the result
months produced results that were both surprising
of a programming error. He called Sadka to ask him
and dramatic.
to write the code from scratch and re-run the data.
“People have been looking for predictability in the
stock market for so long, and finding, if any evidence,
very weak evidence,” says Heston. “And suddenly we
were finding that we could predict returns very easily
using almost astrological methods.”
2
JANUARY 2008 : VOLUME 9 : NUMBER 1
Research by
Steve Heston
The consideration of seasonality has important
Stocks with high historical returns in a
implications for asset pricing models. Heston and
particular calendar month tend to have high
Sadka find large differences across stock returns in
particular calendar months. But measuring returns
over the whole year overlooks these large differences
future returns in that same calendar month,
earning high expected returns every February
in expected return.
or July or October, for example.
The study has implications for investment strategies
“Imagine you’re going to sell stocks for your
as well. Previous studies have shown that stocks with
retirement, or to fund your child’s college education,”
high historical returns tend to have high expected
says Heston. “Some of those stocks went up a lot last
returns. So an investment strategy that buys stocks
October. You won’t want to sell those in September,
with high historical returns and sells stocks with low
because historically they will do well in October.
historical returns should earn high expected returns
Rather, you’d sell stocks that historically do poorly in
in future months. Now it may be possible to design
October. If you’re going to pay a brokerage fee, you’d
an investment strategy that captures the benefits
rather pay a brokerage fee to sell stocks that are likely
of seasonal variation. The magnitude of the decile
to go down in value next month.”
spread strategies described in the paper exceeds 60
basis points per month. These short-lived fluctuations
Heston is working on a study that examines this
in monthly expected return may not be as effective
effect in international markets in Japan, the United
in forming long-term investment strategy, but they
Kingdom, several European countries, and Canada.
could be worthwhile for an active portfolio in
“Seasonality in the Cross-Section of Expected Stock
certain situations.
Returns” is forthcoming from the Journal of Financial
Economics. For more information about this research,
contact sheston@rhsmith.umd.edu.
RESEARCH@SMITH
3
Vigilant against
manipulation
How a consumer thinks about
his goals affects the way he
thinks about your advertising.
A
t some level, anyone watching a commercial
with either a promotion focus or a prevention
on TV or reading an ad in a magazine knows that
focus. They were then shown a print ad for a
the advertiser is trying to convince him to purchase
certain brand of digital cameras. The ad contained
a product or service. Consumers have to process
a headline, a picture of the camera, and three sets
this attempt at persuasion and decide how to
of claims in the copy. The second claim stated
respond to it in a way that helps them achieve
that consumers rated the camera as producing
their own personal goals. How a person thinks
better quality pictures than the leading brand.
about those goals plays an important part in their
Kirmani varied the source of the study and the type
receptiveness to or resistance to persuasion. People
of comparison in this claim to study consumers’
who have a promotion focus see their goals as hopes
perception of manipulative intent. Certain
and aspirations and are looking for products that
participants were also primed with suspicion by
match those goals. But other people, those with
being asked to rate their level of suspicion about
a prevention focus, see their goals as duties and
the ad and the company.
obligations; these people are looking for ways to
avoid making a wrong choice.
Kirmani found that people had a high perception
of manipulative intent on the part of the advertiser
Amna Kirmani, professor of marketing, shows how
when the study was done by a biased source,
people with a prevention focus are determined not
like the company itself, and the comparison
to be persuaded by advertising. In a recent paper
was ambiguous, as when an advertiser makes a
with co-author Rui (Juliet) Zhu, University of British
comparison to “the leading brand” with no further
Columbia, Kirmani shows that consumers with a
information. There was a moderate perception
prevention focus are more aware of manipulative
of manipulative intent when the study was done
intent on the part of advertisers, and that this
by an independent source like Consumer Reports
perception can result in negative feelings about
and the comparison was ambiguous. There was
the brand.
little perception of manipulative intent when the
study was done by an independent source and the
Kirmani and her co-authors looked at the conditions
comparison was specific—for example, “leading
that activate persuasion knowledge, the internal
brands, such as Canon and Kodak.”
radar that alerts people to manipulative intent on
4
the part of advertisers, in light of the way people
When presented with these types of ambiguous ad
think about their goals. In a series of three studies,
claims, prevention-focused individuals perceived
participants were primed to think about their goals
the claims to be more manipulative than did
JANUARY 2008 : VOLUME 9 : NUMBER 1
Research by
Amna Kirmani
There may be ways to leverage
consumer suspicion in a positive
way by first presenting an ambiguous ad claim and then qualifying
that claim in a reassuring manner.
promotion-focused individuals, and people primed
“You can design the order in which you present
with suspicion perceived the claims to be more
information so that this vigilance works to your
manipulative than those not primed with suspicion.
advantage,” says Kirmani. “For example, you could
initially say ‘a study revealed such-and-such’ and
But it is not just material within an ad that can
subsequently in the ad reveal that the study was
activate persuasion knowledge. General suspicion
conducted by a reputable organization such as
of the corporate community seems to affect how
Consumer Reports. I think you would get a big bang
consumers view advertisements. Simply learning
for your buck that way, as opposed to the reverse
that a company’s CEO lied about profitability can
order. You want to scare people a little and then
make consumers suspicious about ambiguous
reassure them. This could be a very successful
ad claims from a completely different company.
strategy to reach people with a prevention focus.”
Managers may want to avoid placing ads or even
product placements in movies or TV shows that
“Vigilant Against Manipulation: The Effect of
expose or highlight corporate fraud, says Kirmani,
Regulatory Focus on the Use of Persuasion
because this activates consumer suspicion of
Knowledge,” was published in the Journal of
companies across the board.
Marketing Research. For more information, please
contact akirmani@rhsmith.umd.edu.
However, it may be possible to design ads to
reduce suspicion on the part of consumers by
including reassuring information. There may even
be ways to leverage consumer suspicion in a
positive way by first presenting an ambiguous ad
claim and then qualifying that claim in a
reassuring manner.
RESEARCH@SMITH
5
Estimating trading risks
through online
Why silence in online feedback
speaks louder than words.
feedback
O
nline feedback mechanisms have become an
The study looks at 51,062 rare coin auctions that took
important tool for electronic businesses and for consumers
place between April and September 2002, on eBay. The
who use them to evaluate potential trading partners and
auctions included items from more than 6,000 distinct
gauge the relative risk of dealing with people whom they
sellers and more than 16,000 distinct buyers. The dataset
may never meet in person. So the reliability of online
included auction information, seller information and
feedback is crucial. But getting a true picture from online
winning bidder information, including both buyer and
feedback is not always easy.
seller feedback posted within 90 days of the auction.
Because online feedback is voluntary, it is prone to
Dellarocas and his co-author considered all possible
reporting bias. People seem to report positive experiences
combinations of each trader’s feedback behavior—positive,
far more often than negative ones, perhaps partly because
neutral, negative, and silence—as well as all possible
they fear retaliation if they post a negative review. This is
temporal ordering of comments—buyer first or seller
a plausible scenario on eBay, where each trader’s reports
first. They developed a quantitative method that derives
are immediately visible to the trading partner, so feedback
estimates of the distribution of the private transaction
from the trader who posts first impacts the feedback
outcomes that produced the target sample of online
posted by his or her trading partner.
feedback on the basis of the relative incidence of feedback
behaviors. This is the first paper to provide concrete
But people have more than two feedback options. They
numerical estimates of the degree to which feedback bias is
can post a positive review. They can post a negative
present on eBay.
review. Or they can also post nothing at all. Chrysanthos
6
Dellarocas, associate professor of information systems, felt
The most detailed version of the model estimates that on
there was something important to be learned from the
average, eBay buyers walk away from a transaction satisfied
silences of online feedback. With co-author Charles Wood,
78.9 percent of the time, neutral or mildly dissatisfied 20.4
University of Notre Dame, he developed a methodology
percent of the time, and very dissatisfied 0.7 percent of the
that allows users of bidirectional feedback mechanisms to
time. The authors claim that this is a more realistic estimate
see a more reliable picture of what is happening in private
of trader satisfaction rates than can be discerned by just
transactions by taking into account the silences in
reading the online feedback, which is overwhelmingly
online feedback.
positive—99 percent of the feedback on eBay is positive.
JANUARY 2008 : VOLUME 9 : NUMBER 1
Research by
Chrysanthos Dellarocas
This is a problem that holds true for any site that makes use
We only see the feedback that people are
of publicly posted feedback as a reputation mechanism. In
willing to report, and often there is a correlation
any Web-based feedback system, whether rating plumbers
or lawyers or doctors, voluntary feedback will be subject to
reporting bias.
between the willingness to report (or not report)
outcomes and the outcomes themselves.
These methods could be useful for many industries.
“We the consumers have to be very careful when we
Imagine an online feedback mechanism that would let
interpret online feedback,” says Dellarocas. “We only see
patients post reviews of their satisfaction with physicians.
the feedback that people are willing to report, and often
Current attempts to create this kind of reputation
there is a correlation between the willingness to report (or
mechanism are hindered by patients’ fears of being sued
not report) outcomes and the outcomes themselves.”
by their physician, a fear that could potentially keep many
people from reporting a bad experience. This feedback
A model such as this permits people to see through the
bias would result in an unrealistically high rate of positive
bias to get a more reliable picture of the risks associated
reviews, much like the situation that now exists on eBay.
with trading on eBay. While the average consumer won’t
But insurance companies could conceivably use this model
be able to run Dellarocas’ model, a third party could build
to extract information from a patient’s choice to remain
a meta-engine to mine this information from eBay—or any
silent and provide their customers with a more reliable
site that permits public reviews—and give consumers a
estimate of the rate of satisfaction associated with
more “objective” report on the probable reliability of any
specific physicians.
given trader. Dellarocas can imagine a kind of “Consumer
Reports” for reputation mechanisms that uses his model
“The Sound of Silence in Online Feedback: Estimating
to give consumers more reliable information than the
Trading Risks in the Presence of Reporting Bias” is
mechanisms themselves, increasing the efficiency of
forthcoming from Management Science. For more
electronic and traditional markets.
information about this research, contact
cdell@rhsmith.umd.edu.
RESEARCH@SMITH
7
Center for
Excellence
in Service
The American economy was built on manufacturing.
CES works with corporations for whom service is
Today the noise of the factories has died down to be
an important strategic consideration—a group that
replaced by the steady hum of computers. As our
is growing year by year. “The economy is moving
industrial economy has evolved into a knowledge-
dramatically toward service and has for a hundred
based economy, most of the new jobs created have
years. Many major corporations are just now figuring
been service jobs, not manufacturing jobs. But this
this out,” says Roland Rust, David Bruce Smith Chair
doesn’t mean service workers in the traditional
in Marketing, chair of the Smith School’s marketing
sense of burger-flippers and grocery checkers.
department and executive director of the center.
We are becoming a nation of doctors, architects,
“The center’s initiatives and corporate initiatives are
accountants, lawyers, teachers, and computer
combining well right now.”
experts—knowledge-based workers who are highly
skilled and highly paid.
Smith faculty work directly with corporate partners to
pursue some of the most interesting and challenging
Eighty percent of the U.S. economy is now service-
issues arising from the service economy. Janet Wagner,
oriented. Service rather than goods drives much
associate professor of marketing and associate chair
of the country’s economic growth. And this isn’t
of the marketing department, is working with IBM
just an American phenomenon—it is a trend that is
to explore how citizens experience and interact with
becoming more evident among industrial economies
e-government, developing models of government-
around the world.
to-citizen relationships and developing indices for
government service quality and citizen engagement.
This trend toward service rather than goods, along
“E-government is a way to enhance the value of
with the rapid expansion of the information economy
government service to citizens,” says Wagner. “By
and electronic networks, is explored in the Smith
strengthening government-to-citizen relationships,
School’s Center for Excellence in Service (CES), which
e-government can increase citizens’ participation in
focuses on the impact of technology and information
the democratic process.”
on managing customer relationships.
P.K. Kannan, Harvey K. Sanders Associate Professor
CES combines its unique perspective of customer
of Marketing and director of CES, is working with
point-of-view and an exploration of a variety of
Industrial Technology Research Institute (ITRI), a
services (with a focus on information technology)
Taiwanese think tank, to develop service models for
in order to provide business leaders and academics
insurance companies in an effort to control health
with the latest knowledge in service research. CES
care costs and diminish the economic cost of chronic
also implements practical business objectives into its
diseases in Taiwan. CES is also working on service
academic research and actively seeks partnerships
science management and engineering initiatives and
within the business community.
benchmarking in the customer management area,
says Kannan.
8
JANUARY 2008 : VOLUME 9 : NUMBER 1
One of the center’s major ongoing projects is the
leading annual conference on service research.
annual National Technology Readiness Survey, a
The conference has a global nature and in 2007
nationwide survey of American adults that provides
drew more than 300 attendees from 41 countries,
an in-depth view of consumer beliefs about new
all of them eager to share ideas and gain new
technologies. In addition to offering comprehensive
perspective on topics including service marketing,
information about peoples’ technology beliefs, the
service operations, service human resources, service
NTRS also examines consumers’ technology vision,
information technology, e-service, service innovation,
employees’ technology vision, usage of technology-
and customer relationship management.
based products and services, the impact of the
Internet on behavior, cellular phone usage, desired
The world’s leading journal in the field, Journal
methods of tech support, and the association
of Service Research, is sponsored by CES and was
between peoples’ technology beliefs and their
founded by Rust. It recently entered the Social
demographics and lifestyles. This year’s survey looks at
Science Citation Index, which includes only the best
online content—how people react to various kinds of
academic journals, just seven years after its inception,
content, what kinds of content they are they willing
which is unusually fast. Its first citation report showed
to pay for, and the popularity of “green” products
it to be the 13th most cited journal out of 64 business
and services.
journals, an impressive accomplishment for such a
relatively young journal.
Customer equity has also been a long-term subject of
exploration, and publications from CES are helping
For more information about CES, please visit the
businesses understand how to make customer equity
center’s Web site at www.smith.umd.edu/ces/,
the strategic focus of the firm. The award-winning
or contact P.K. Kannan, director of the center, at
customer equity models devised by CES faculty have
pkannan@rhsmith.umd.edu.
been successfully applied at corporations worldwide.
The center disseminates its research results through
a variety of sources. The Frontiers in Service
Conference, sponsored annually by CES, is the world’s
RESEARCH@SMITH
9
Faculty Awards and Honors
Roland Rust, David Bruce Smith Chair
Steve Heston, associate professor of
in Marketing and chair of the marketing
finance, received his PhD from Carnegie
Larry Bodin, professor emeritus of
department, won the Best Article Award
Mellon University. His research interests
management science, and Michael Fu,
from the Journal of Service Research
are in analyzing options with stochastic
professor of management science, were
for his article “The Path to Customer
volatility and international stock risk. His
both elected as INFORMS (The Institute for
Centricity,” with co-authors Denish Shah,
current work focuses on option valuation
Operations Research and the Management
A. Parasuraman, George Day and
and stock investing.
Sciences) Fellows.
Richard Staelin.
P.K. Kannan, Harvey Sanders Associate
Lawrence Gordon, Ernst & Young
Subra Tangirala, assistant professor
Professor of Marketing, received his PhD
Alumni Professor of Managerial
of management and organization, was
from Purdue University. His primary
Accounting, was invited to appear before
recently selected as the winner of SIOP’s
research areas are new product/service
a subcommittee of the House Committee
2008 S. Rains Wallace Dissertation Award,
development, design and pricing digital
on Homeland Security to give written
given to the person who completes the
products and product lines, marketing
and oral testimony concerning his joint
best doctoral dissertation research within
and product development on the Internet,
research with Martin Loeb, professor
the field of I-O psychology.
e-service, and customer relationship
management (CRM) and customer
of accounting and information assurance,
Deloitte & Touche LLP Faculty Fellow
Sue White, Distinguished Tyser Teaching
loyalty. His recent research focuses on
and chair of the accounting and
Fellow in finance, has been inducted into
new product/service development, and
information assurance.
the Academy for Excellence in Teaching
marketing of information products.
and Learning at the University of Maryland.
Rebecca Hamilton, associate professor
Amna Kirmani, professor of marketing,
of marketing, and Roland Rust,
received her PhD from Stanford University.
David Bruce Smith Chair in Marketing,
Editorial Appointments
inferences of product quality from
executive director of the Center for
Excellence in Service, and chair of Smith’s
Gilad Chen, associate professor of
marketing signals, consumers’ use of
marketing department, were awarded
management and organization, is associate
persuasion knowledge, and branding.
the 2007 Don Lehmann Award for the
editor of the Journal of Applied Psychology.
Her recent work focuses on deception
in interpersonal contexts, such as sales,
Best Dissertation-Based Research Article
in the Journal of Marketing or Journal of
Rebecca Ratner, associate professor
and the extent to which consumers think
Marketing Research. Their article, written
of marketing, was appointed to the
deception is appropriate in the context
with co-author Debora Thompson, is
Editorial Review Board of the Journal of
of persuasion.
titled “Feature Fatigue: When Product
Marketing Research.
Roland Rust, David Bruce Smith Chair
Capabilities Become Too Much of a
Good Thing.”
P. K. Kannan, Harvey Sanders associate
Jie Zhang, assistant professor of
in Marketing and chair of the marketing
marketing, was appointed to the Editorial
department, is executive director of the
Review Board of the Journal of Marketing.
Center for Excellence in Service and
professor of marketing and director of
received his PhD from the University of
the Center of Excellence in Service, won
North Carolina, Chapel Hill. He is a prolific
the 2007 INFORMS Society for Marketing
Featured Researchers
and frequently-honored author, having
won best article awards for articles in
Science Practice Prize competition for the
10
Her research interests include consumers’
paper, “Pricing Digital Products: A Model
Chrysanthos Dellarocas, associate
Marketing Science, Journal of Marketing
and Application for National Academy
professor of information systems, received
Research (twice), Journal of Marketing
Press” with co-authors Barbara Kline Pope
his PhD from the Massachusetts Institute
(three times), Journal of Service Research,
and Sanjay Jain.
of Technology. His research studies how
Journal of Advertising, and Journal of
online reputation mechanisms, online
Retailing, as well as MSI’s Robert D. Buzzell
Peter Morici, professor of logistics,
product review sites and other Web 2.0
Best Paper Award (twice). His book, Driving
business and public policy, won the
technologies are affecting firm strategies,
Customer Equity (written with Valarie
MarketWatch Forecaster of the Month
consumer behavior and competition
Zeithaml and Katherine Lemon) won the
award in September 2007 with his accurate
among infomediaries.
Berry-AMA Book Prize for the best book
predictions of 10 of the most closely
in marketing. Rust is editor of the
watched economic indicators.
Journal of Marketing.
JANUARY 2008 : VOLUME 9 : NUMBER 1
Arjang Assad Named
Dean’s Professor for
Extraordinary Service
Assad has seen Smith and the University
picture until they’re the ones doing the
of Maryland grow and change throughout
work,” says Cleveland.
the years. He is particularly proud that
Smith has become a top-tier university
Two-year research fellow Lindsay Schwalb,
Arjang Assad, professor of management
in the past decade under Dean Howard
a senior marketing major, agrees. She has
science, has been appointed Dean’s
Frank’s guidance. “I’m proud of how Smith
been working on a research project with
Professor for Extraordinary Service. Assad is
has advanced and shown the capacity
Ken Smith, Dean’s Chaired Professor of
the first member of the Smith School to be
and capability to grow very quickly,” says
Business Strategy, and doctoral candidate
honored with this title.
Assad. “It isn’t very easy to compete in
David Major, examining the competitive
the evolving business school market
dynamics of the automotive industry.
This newly created honor is reserved
without compromising the quality of
for faculty demonstrating extraordinary
education offered.”
“The topic is interesting to me because I’m
a business major, and anything you do in
service on multiple levels, including the
application of intellectual skills to issues
As for the future, Assad says he will
business involves competition, what other
of public concern and exceptional
continue to take on leadership roles
businesses are doing,” she says. “When
leadership in local and campus-wide
inside and outside of Smith. He
I started, I didn’t have a good idea of
faculty governance.
relishes interaction with faculty across
what goes into huge multi-year projects.
diverse disciplines.
I’ve learned so much about the research
process from start to finish.”
Assad came to Smith as an assistant
professor in 1978 after he received his
“Even though I’ve been at Smith for a
PhD in management science from the
long time, it always presents me with
Cleveland says she has heard from many
Massachusetts Institute of Technology.
new challenges,” says Assad. “The great
faculty members who sing the praises of
He has served as Smith’s senior associate
thing about this school is that I can always
their undergraduate Research Fellows.
dean, chair of the Decision and
engage myself in new things, keep my
“In the very first year students began their
Information Technologies department
roles fresh. Things never get boring
work, faculty began to realize their value.
and director of QUEST, an undergraduate
or stale.”
I started hearing, ‘This student is so great,’
and ‘I don’t know what I’d do without
honors fellowship program.
my student.’ And you know what;
His early research focused on operations
Smith Research Fellows
the undergraduate students’ technology
skills are excellent.”
and distribution, working with a group
of colleagues at the forefront of vehicle
It’s not every day an undergraduate
routing, resolving distribution and supply
student gets to be a part of a leading
Lily Hou, a finance and logistics,
chain issues.
researcher’s project. But at the Smith
transportation, and supply chain senior,
School, Research Fellows get to rub elbows
joined the program in 2005. Hou works
In his recent work, Assad has partnered
with—and work for—some of the best
closely with Thomas Corsi, Michelle E.
with Smith professor emeritus Saul Gass,
minds in their fields. The Research Fellows
Smith Professor of Logistics, and
capturing the history of operations
program, part of the Smith School’s
Sandor Boyson, research professor,
research. This partnership has resulted
Undergraduate Fellows Program, offers
evaluating simulations for classroom use.
in several articles, one published book,
select undergraduates the opportunity to
Her first project examined the connection
titled “An Annotated Timeline of
work side-by-side with Smith faculty and
between technology and safety for
Operations Research” (Springer, 2005),
present their findings at Research Day, an
trucking companies.
and a second book in the works.
annual event showcasing students’ major
contributions and achievements.
“I have gotten so much out of this
program. I have learned [about] a variety
Assad has chaired the INFORMS History
& Traditions Committee and served on
The program has grown from 22 fellows in
of programs that no other students get
the editorial boards of several leading
2005 to 28 in 2007. According to Assistant
to experience,” Hou says. “I understand
journals, including Operations Research,
Dean Patricia Cleveland, the program is
the supply chain and logistics process a
Transportation Science, Production and
“a whopping success.”
lot better. I’ve even been able to build a
network due to helping out in
Operations Management, and the INFORMS
Journal on Computing.
“Students’ eyes are open to what research
class periodically.”
projects really entail, which [they] don’t
see in class. They don’t really see the big
RESEARCH@SMITH
11
Smith School
INFORMS Fellows
Michael Fu, professor of management
solution has to be embedded on top
Federal Aviation Administration, where
science, and Lawrence Bodin,
of a street network. The systems he
his models for optimizing takeoffs
professor emeritus of management
helped develop are being used by
and landings at airports found an
science, have been named as
some of the major delivery companies,
enthusiastic welcome.
fellows for 2008 by the Institute
newspaper delivery companies, public
for Operations Research and the
utilities and sanitation companies.
Golden’s research interests include
Management Sciences (INFORMS).
“I am very pleased to have been
heuristic search, combinatorial
This singular honor, awarded to
named an INFORMS Fellow,” says
optimization, networks, and applied
about 2 percent of the organization’s
Bodin. “There are only about 200 of
operations research. He recently
11,000 members, has now been
INFORMS’ 11,000 members who have
worked with the University of
held by six members of the Smith
been named INFORMS Fellows. I feel
Maryland Hospital’s cardiac surgery
School’s decision and information
it is a wonderful honor to be given this
department to optimize the number
technologies department. In addition
recognition for my accomplishments.”
of beds in the intensive care unit,
to Fu and Bodin, Saul Gass, professor
where there is one nurse per bed, and
emeritus of management science,
Fu, who was recently named a
the remote telemetry unit, where less
Michael Ball, Orkand Professor of
University of Maryland Distinguished
staff is required. The model was able
Management Science, Bruce Golden,
Scholar-Teacher, and holds a joint
to save the hospital millions of dollars,
France-Merrick Chair in Management
appointment with the Institute for
and get people into needed surgery
Science, and Dean Howard Frank are
Systems Research and an affiliate
more quickly.
past INFORMS fellows.
appointment with the Department of
Electrical and Computer Engineering,
Howard Frank, who is also a
INFORMS Fellows are recognized
both in the A. James Clark School of
member of the National Academy
for their significant contributions
Engineering. He works on simulation
of Engineering, earned his INFORMS
to the advancement of the field of
modeling and analysis, production/
Fellow award by virtue of research
operations research, which uses
inventory control, applied probability
begun during his early academic
data and mathematical techniques
and queueing theory, with application
career at the University of California
to solve specific business problems.
to manufacturing and finance. He is
at Berkeley and further explored
Gass, a pioneer in the field, helped
currently working with the FDIC to
during his subsequent career in both
develop the technique of linear
evaluate each of its 6,000 member
the private and public sectors. His
programming, a simple but powerful
banks in order to determine the
research examined the theory of large
tool that allowed researchers to create
level of premium to charge for FDIC
scale network analysis and design and
computer programs to model a large
insurance. “I feel extremely honored
the development of packet-switching,
range of tremendously complex
and grateful to be one of the 30
one of the key innovations that made
business problems.
INFORMS Fellows selected worldwide
the modern Internet possible.
this year,” says Fu.
Gass influenced succeeding
12
Taken together, the research
generations of researchers at the
Ball, who also holds a joint
represented by the Smith School’s
Smith School, including Lawrence
appointment within the Institute
INFORMS Fellows show the strength
Bodin, Michael Fu, Bruce Golden, and
for Systems Research (ISR) in the
of Smith’s DIT faculty and the
Michael Ball.
Clark School of Engineering, works
relevance of our research across many
in the area of network optimization
industries. And it also demonstrates
Bodin consulted with major delivery
and integer programming,
why the Smith School has achieved
companies to develop models and
particularly as applied to problems
international recognition as a research
algorithms to find the solution of
in transportation systems and supply
powerhouse and an influential center
routing problems over geographic
chain management. His research
of ideas and innovation.
data bases, particularly the problems
has had a significant influence on
that are encountered when the
both the policy and practice of the
JANUARY 2008 : VOLUME 9 : NUMBER 1
University of Maryland
The University of Maryland, College Park, is one of the nations’s top 20 public research universities. In 2007,
the University of Maryland received approximately $407 million in sponsored research and outreach activities.
The university is located on a 1,250-acre suburban campus, eight miles outside Washington, D.C., and 35 miles
from Baltimore.
Robert H. Smith School of Business
The Robert H. Smith School of Business is an internationally recognized leader in management education and
research. One of 13 colleges and schools at the University of Maryland, College Park, the Smith School offers
undergraduate, full-time and part-time MBA, executive MBA, executive MS, PhD, and executive education programs,
as well as outreach services to the corporate community. The school offers its degree, custom and certification
programs in learning locations on three continents—North America, Europe and Asia. More information about the
Robert H. Smith School of Business can be found at www.rhsmith.umd.edu.
In this issue
• Overcoming consumer suspicion
• When silence speaks louder than words
• True seasonality in the stock market
• Research from Smith’s Center for Excellence in Service
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mobile device, and watch or listen to it at your
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be accessed via the Web. To subscribe to Smith
Podcasts or learn more visit
www.rhsmith.umd.edu/podcast.
A lso A va i lable i n
Mandarin Chinese
The featured research articles from this issue of
Research@Smith are available in Mandarin Chinese
in both print and audio. Go to:
www.rhsmith-umd.cn/bi to learn more.
本期Research@Smith (史密斯调研)专题文章的中
文已经可以以播客或音频形式下载收听.
更多史密斯播客请访问 www.rhsmith-umd.cn/bi
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