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*************************** Special Date ******************************

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                                                         Seminar
             Department of Systems Engineering and Engineering Management
                                  The Chinese University of Hong Kong

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Title	:	Inventory Rationing for Multiple Class Demand under Continuous Review
Speaker	:	Prof. Qing Ding
		Lee Kong Chian School of Business
		Singapore Management University
Date	:	August 8th, 2007 (Wednesday)
Time	:	4:30 p.m. - 5:30 p.m.
Venue	:	Room 513
		William M.W. Mong Engineering Building
		(Engineering Building Complex Phase 2)
		CUHK

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Abstract:
　

We consider the problem of purchasing inventory from a supplier and rationing it to multiple demand classes in a continuous review environment. Each demand class is characterized by a demand rate and a contribution margin per unit filled. Further, customer classes are distinguished by the likelihood they will wait for fulfillment. The firm must also determine if to serve a demand when it arrives or if it is to be placed on back order. The firm must also determine when it should place an order from its supplier. We assume Poisson demand, a fixed setup cost for orders to the firm’s supplier and partial, class-dependent demand backordering.

The problem of allocating inventory to multiple demand classes has been investigated in many settings. In fact, the revenue/yield management literature is based on determining which demands to satisfy at what prices. However, much of this work focuses on perishable inventory and single period models. Within the non-perishable inventory, multiple period models, the literature considers the periodic review polices or the continuous review heuristics. The current paper contributes to the literature by providing a polynomial-time, epsilon-optimal algorithm that maximizes the revenue less inventory holding and backorder costs for a multiple class problem with setup costs and zero lead time.

The problem is solved by defining a suitable dynamic program that uses an initial profit rate to find an allocation and ordering policy. The resulting policy then defines an expected profit rate. By comparing the initial and resulting rates, the algorithm adjusts its search and approaches the optimal, feasible expected profit rate through a tatonnement-like process.

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Biography:
　

Qing DING is an Assistant Professor of Operations Management at the Lee Kong Chian School of Business, Singapore Management University. He received a B.S. degree and an M.S. degree in Control Theory from Nankai University, a Ph.D. in Operations Research from Hong Kong Polytechnic University, and a Ph.D. in Operations Management from Washington University at St. Louis. His research interests include Global Supply Chain Management, Dynamic Revenue Management, Production Scheduling, Applications of Auction Theory. He has published in journals that include Operations Research, Naval Research Logistics, IIE Transactions, European Journal of Operational Research, etc.

************************* ALL ARE WELCOME ************************

Host	:	Prof. Houmin Yan
Tel	:	(852) 2609-8329
Email	:	yan@se.cuhk.edu.hk
Enquiries	:	Lu Qin or Jeffrey Xu Yu
	:	Department of Systems Engineering and Engineering Management
		CUHK
Website	:	http://www.se.cuhk.edu.hk/~seg5810
Email	:	seg5810@se.cuhk.edu.hk

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