题 目: Supply Chain Planning for Random Demand Surges:  Reactive Capacity and Safety Stock

演讲人: Jeannette Song（Fuqua School of Business，Duke University）

时  间: 2014年5月16日（周五），下午14：00

地  点: 同济大厦A楼1722会议室

Abstract:

The rapid speed of globalization and innovation as well as increased frequency of natural disasters have exposed more and more products to unpredictable yet substantial demand surges. Examples include severe-weather related demand, fast-fashion demand, and auction-based demand. To build supply chain capabilities to match supply with demand, firms and humanitarian organizations may invest in two fundamentally different sourcing strategies — building reactive capacity and holding safety stock. Using a stylized model that captures the features of random demand surges, we determine the joint strategy that maximizes the service level under a fixed budget. We prove that the original optimization problem is equivalent to a penalty cost formulation and a target in-stock probability formulation. We find that the optimal joint strategy is a threshold policy depending on the relative profitability of each strategy. Through stochastic comparisons, we characterize how the optimal strategy is impacted by the type of surge demands (e.g., frequency, magnitude, duration, and shape), the predictability of surge demand characteristics, and the cost profile of hedging strategies (e.g., inventory holding, capacity reservation, and purchasing costs). In this way, we establish a framework for making strategic decisions to hedge against random surge demands. (Joint work with Lu Huang and Jordan Tong)