Time:2019.04.19, 14:30 PM

Location:Room 615, Main Building

KeynoteSpeaker:Dr.Stephen Shum

Abstract:How should afirm dynamically manage its availability/pricing decisions when facingstrategic customers? The talk will cover two studies that attempt to answerthis question.  

Thefirst study considers a firm’s dynamic inventory and markdown decisions forperishable products. Each period consists of two phases, clearance phase andregular-sales phase. Strategic customers may buy the product during clearancesales for future consumption. Hence, markdown may cannibalize future sales atregular price. We show that the firm should either put all of the leftoverinventory on discount or dispose all of it, and the choice depends on theamount of leftover inventory from the previous period. This study is joint workwith Peng Hu and Man Yu.      

Thesecond study considers the dynamic pricing and rationing policy of a firmfacing strategic customers under the influence of shortage effect. We provideconditions under which it is optimal for the firm to ration. We also characterizethe firm’s long-run optimal policy. This study is joint work with Hu Peng and LiuHanqing.  

Bio:Dr.Stephen Shum is an associateprofessor in the College of Business at the City University of Hong Kong. Hereceived his PhD degree in Operations Research from MIT, and his bachelordegree in Electrical Engineering and Mathematics from UCLA. His researchfocuses on pricing and revenue management, supply chain management, andcustomer behavior in operations management. His research has been published injournals such asManagement Science,Operations Research, andProductionand Operations Management. Prior to joining the City University of HongKong, he was on the faculty of HKUST Business School.