[Lecture, May 30] Dynamic pricing and inventory control with large replenishment lead times
 
time: 2018-05-25

Title: Dynamic pricing and inventory control with large replenishment lead times

Speaker: Prof. Xin CHEN, Department of Industrial and Enterprise Systems Engineering, University of Illinois at Urbana-Champaign

Time: 9:00 am, May 30, 2018

Venue: Zhuanghui Hall, Building 12, Wushan Campus


Introduction to the Speaker:

Professor Xin Chen is Abel Bliss Faculty Scholar and Jerry S. Dobrovolny Faculty Scholar of Department of Industrial and Enterprise Systems Engineering, University of Illinois at Urbana-Champaign. He obtained his PhD in Operations Research from MIT. His research interest lies in optimization, revenue management and supply chain management. He received the Informs revenue management and pricing section prize in 2009. He is the coauthor of the book “The Logic of Logistics: Theory, Algorithms, and Applications for Logistics and Supply Chain Management (Second Edition 2005 & Third Edition 2014)”.


Abstract:

We consider a joint pricing and inventory control problem with positive replenishment lead times. Although this problem has been extensively studies in the literature, the structure of the optimal policy remains poorly understood. In this work, we propose a class of so-called constant-order list-price policies. We prove that the best constant-order list-price policy is indeed asymptotically optimal as the lead time grows large, which is exactly the setting in which the problem becomes computationally intractable due to the curse of dimensionality.