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Optimal product replacement with cross-item effects
Manuel Moran-Pelaez1, Georgia Perakis2, Tamar Cohen-Hillel3
1Operations Research Center, MIT; 2Sloan School of Management, MIT; 3Sauder School of Business, UBC
In this work, we study the product replacement problem. This problem arises in the fast fashion industry, where the company's headquarters frequently send new items to stores, expecting store managers to remove current items to make room for the new items and display them. Our study addresses a general case, including misaligned incentives among decision-makers and cross-item effects. We present optimal strategies for the headquarters, but also investigate different store managers' behaviors.
Pricing and information provision in online service platforms with heterogeneous customers
Xin Weng1, Li Xiao1, Lijian Lu2
1Tsinghua University; 2Hong Kong University of Science and Technology
We study the impact of wait time information distortion on customer join decision and the service provider’s revenue in virtual queues. We show that the optimal revenue is first increasing and then decreasing in the distortion level. A zero distortion is optimal only when the service capacity is sufficient and the service value is high. Customer joining rate could be either increasing or decreasing in the distortion level.
When a platform competes with third-party sellers in networked markets: a revenue management perspective
Hongfan Kevin Chen1, Hai Wang2
1Chinese University of Hong Kong; 2Singapore Management University
