Dr. Xiulai He (University of North Carolina at Charlotte)
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Date：2014-07-17
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Title: Dynamic Pricing, Production, and Channel Coordination with Stochastic Learning
Speaker: Dr. Xiulai He (University of North Carolina at Charlotte)
Date: July 8th, 2014 10:00 AM
Location: CEEP-BIT
Introduction of the speaker:
Xiuli He is an Associate Professor of Operations Management at the Belk College of Business at the University of North Carolina at Charlotte. She received her Ph.D. in Supply Chain and Operations Management from the University of Texas at Austin. Her research interests include channel coordination, dynamic pricing, cooperative advertising, supply chain analytics, and inventory management with stochastic learning, and behavioral issues in supply chain management. Her research has been published by journals such as Production and Operations Management, Decision Sciences, European Journal of Operational Research, Operations Research Letters, International Journal of Production Research, Journal of Optimization Theory and Applications, and Journal of Systems Science and System Engineering. She serves as an Associate Editor of International Journal of Production Research and serves on the editorial boards of Production and Operations Management and American Journal of Operational Research.
About the lecture:
We consider a decentralized two-period supply chain in which a manufacturer produces a product with benefits of cost learning, and sells it through a retailer facing a price-dependent demand. The manufacturers second-period production cost declines linearly in the first-period production, but with a random learning rate. The manufacturer may or may not have the inventory carryover option. We examine the impact of mean learning rate and learning rate variability on the pricing strategies of the channel members, on the manufacturer’s production decisions, and on the retailer’s procurement decisions. We show that as the mean learning rate or the learning rate variability increases, the traditional double marginalization problem becomes more severe, leading to greater efficiency loss in the channel. We obtain revenue sharing contracts that can coordinate the dynamic supply chain. In particular, when the manufacturer may hold inventory, we identify two major drivers for inventory carryover: market growth and learning rate variability. Finally, we demonstrate the robustness of our results by examining a model in which cost learning takes place continuously.
