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Willow Yang
Willow Yang

Willow Yang

Assistant Professor
Sam Houston State University
Bio

Dedicated to bridging the gap between academic research and industry challenges, Dr. Yang specializes in operations and supply chain optimization, helping organizations develop innovative, data-driven approaches to procurement, inventory management, demand forecasting, distribution network design, and facility locations. She holds a patent in a physical resource optimization system and a provisional patent in a hospital procurement cost reduction system. Before transitioning to academia, Dr. Yang worked in the high-tech industry, leading initiatives in marketing, business development, and consulting at Microsoft, HP, and IDC. This extensive industry background informs her research and teaching with a crucial practical perspective and an emphasis on real-world relevance. Dr. Yang received her Ph.D. in Supply Chain & Analytics with a minor in Marketing from the University of Missouri – St. Louis. She also holds an M.B.A. and a Bachelor of Engineering in Computer Science & Applications. She collaborates closely with industry, actively publishes research, and serves as a reviewer for several prestigious academic journals.


Reducing Hospital Procurement Costs through Vendor Contract Optimization: A Decision-Support Framework for GPOs

Group Purchasing Organizations (GPOs) play a crucial role in the U.S. healthcare supply chain by consolidating purchasing power across multiple healthcare providers. This study presents a data-driven framework designed to help GPOs reduce medical supply costs for hospitals by addressing inefficiencies in vendor tier contracts, a complex form of quantity discount based on market share rather than absolute quantity. The framework consists of reference matrices that define feasible adjustment spaces for tier prices and thresholds, followed by mixed-integer programming models designed to optimize contract parameters. It enables GPOs to (1) identify misalignments between vendor contracts and hospital operational realities, (2) guide vendors in improving their tier contracts to lower procurement costs for hospitals while supporting their own financial interests, and (3) evaluate the potential for tailoring contracts to individual health systems within existing tier structures to achieve additional savings. Applied to four health systems within a Midwest-based GPO, the model demonstrated up to 50% potential savings compared to current IDN spend and 14% savings relative to the optimal spend under existing tier thresholds. In addition, while prior studies suggest hospital-direct contracts fail to deliver net savings due to high transaction costs, our research shows that some hospitals could potentially benefit from GPO-managed custom contracts.