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The Optimal Composition of Influenza Vaccines Subject to Random Production Yields


  • Soo-Haeng Cho

    () (Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)


The Vaccine and Related Biologic Products Advisory Committee meets at least once a year to decide the composition of seasonal influenza vaccine in the United States. Past evidence suggests that the committee could use a more systematic approach to incorporate observed information and to quantify the risks associated with different options. There are two key trade-offs involved in this decision. First, if the Committee decides to retain the current vaccine composition instead of updating to a new one, there is lower uncertainty in production yields, but the current vaccine could be less effective if a new virus strain spreads. Second, if the Committee decides early with less information, then manufacturers have more production time, but the reduced information increases the risk of choosing a wrong strain. We derive an optimal dynamic policy for this decision. Because of the greater uncertainty in production yields of new vaccines, the optimal thresholds are neither symmetric between retaining and updating the composition nor monotonic over time. We apply our model to past decisions using parameter values estimated from a historical case. Our analysis shows that the dynamic optimal policy can significantly improve social welfare.

Suggested Citation

  • Soo-Haeng Cho, 2010. "The Optimal Composition of Influenza Vaccines Subject to Random Production Yields," Manufacturing & Service Operations Management, INFORMS, vol. 12(2), pages 256-277, November.
  • Handle: RePEc:inm:ormsom:v:12:y:2010:i:2:p:256-277

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    References listed on IDEAS

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    6. Sarang Deo & Charles J. Corbett, 2009. "Cournot Competition Under Yield Uncertainty: The Case of the U.S. Influenza Vaccine Market," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 563-576, July.
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    Cited by:

    1. Kenan Arifoglu & Sarang Deo & Seyed M. R. Iravani, 2012. "Consumption Externality and Yield Uncertainty in the Influenza Vaccine Supply Chain: Interventions in Demand and Supply Sides," Management Science, INFORMS, vol. 58(6), pages 1072-1091, June.
    2. Duijzer, L.E. & van Jaarsveld, W.L. & Wallinga, J. & Dekker, R., 2015. "Dose-optimal vaccine allocation over multiple populations," Econometric Institute Research Papers EI2015-29, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    3. Duijzer, Lotty Evertje & van Jaarsveld, Willem & Dekker, Rommert, 2018. "Literature review: The vaccine supply chain," European Journal of Operational Research, Elsevier, vol. 268(1), pages 174-192.
    4. Silva, Maria Laura & Perrier, Lionel & Cohen, Jean Marie & Paget, William John & Mosnier, Anne & Späth, Hans Martin, 2015. "A literature review to identify factors that determine policies for influenza vaccination," Health Policy, Elsevier, vol. 119(6), pages 697-708.
    5. Duijzer, L.E. & van Jaarsveld, W.L. & Dekker, R., 2017. "The benefits of combining early aspecific vaccination with later specific vaccination," Econometric Institute Research Papers EI2017-03, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    6. Adida, Elodie & Dey, Debabrata & Mamani, Hamed, 2013. "Operational issues and network effects in vaccine markets," European Journal of Operational Research, Elsevier, vol. 231(2), pages 414-427.
    7. Begen, Mehmet A. & Pun, Hubert & Yan, Xinghao, 2016. "Supply and demand uncertainty reduction efforts and cost comparison," International Journal of Production Economics, Elsevier, vol. 180(C), pages 125-134.
    8. Yarmand, Hamed & Ivy, Julie S. & Denton, Brian & Lloyd, Alun L., 2014. "Optimal two-phase vaccine allocation to geographically different regions under uncertainty," European Journal of Operational Research, Elsevier, vol. 233(1), pages 208-219.


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