- December 11, 2007 - 16:00
- ZLC, Lecture Room A1
Marshall School of Business at University
of Southern California
Department of Information and Operation management
“Inventory Assortment and Substitution Problems” (Joint work with Feng Chen)
We consider general substitution problem, in which consumers can choose one of N variants. We start with a choice model that ranks the preference of each consumer. The preferences of each of the consumers are not known to the retailer and thus, he/she must assume that the demand for each variant is random. We are able to calculate the retailer’s optimal stocking policy. We show that the role of safety stock is to hedge against the uncertainty in the market size but not the uncertainty in the demand for each of the variants. We then move the describe competition between retailer. Again, we are able to characterize the equilibrium inventory levels and assortments. When competition is considered safety stock may be carried even if market size is known. But, in most practical cases if market size is known but consumer choice is random no safety stock is carried with a very high probability.
Yehuda Bassok – Associate Professor
Ph.D., Carnegie Mellon University.
Prof. Bassok holds a Ph.D in Engineering and Public Policy and a bachelor degrees in Mathematics and Economics from the Hebrew University, Jerusalem, Israel. Prior to coming to USC Prof. Bassok was on the faculty of the McCormick School of Engineering, Northwestern University and a visiting Hansen chaired professor at the University of Washington. His research interests include supply chain management, design and analysis of supply contracts, centralized and decentralized inventory and distribution system. He has published articles on these topics in the leading journals.
Prof. Bassok is on the board of IIE transactions, Manufacturing and Service Operations Management and is an associate editor for Operations Research.
Professor Bassok has consulted extensively in the apparel, electronics and entertainment industries. For companies like IBM, Fairchild Industry and Disney development.
Supply Chain Management