讲座题目:Dynamic Operations Management with Strategic Customers
How should a firm dynamically manage its availability/pricingdecisions when facing strategic customers? The talk will cover two studies thatattempt to answer this question.
The first study considers a firm’s dynamic inventory and markdowndecisions for perishable products. Each period consists of two phases,clearance phase and regular-sales phase. Strategic customers may buy theproduct during clearance sales for future consumption. Hence, markdown maycannibalize future sales at regular price. We show that the firm should eitherput all of the leftover inventory on discount or dispose all of it, and thechoice depends on the amount of leftover inventory from the previousperiod. This study is joint work with Peng Hu and Man Yu.
The second study considers the dynamic pricing and rationing policyof a firm facing strategic customers under the influence of shortage effect. Weprovide conditions under which it is optimal for the firm to ration. We alsocharacterize the firm’s long-run optimal policy. This study is joint workwith Peng Hu and Hanqing Liu.
Stephen Shum is an associate professor in the College of Business atthe City University of Hong Kong. He received his PhD Degree in OperationsResearch from MIT, and his bachelor degrees in Electrical Engineering andMathematics from UCLA. He research focuses in pricing and revenue management,supply chain management, and customer behavior in operations management. Hisresearch has been published in journals such as Management Science, OperationsResearch, and Production and Operations Management. Prior to joining the CityUniversity of Hong Kong, he was on the faculty of HKUST Business School.