Spring 2006 UMASS Amherst
Operations Research / Management Science Seminar Series

Date: Friday, February 24, 2006

Time: 11:00 AM
Location: Isenberg School of Management, Room 112

Speaker: Professor Georgia Perakis

Sloan School of Management
Massachusetts Institute of Technology

Cambridge, MA

Biography: Georgia Perakis is the J. Spencer Standish Associate Professor at the
Sloan School of Management at MIT. She received her Sc.M. and Ph.D. from Brown University. In 1998 she joined the faculty at the Sloan School of Management at MIT. She is on sabbatical leave at the IEOR department of Columbia University.

Her research interests include revenue management, dynamic pricing, the study of auctions and supply chain management in the presence of competition.  Furthermore, she studies transportation, in particular, the study of traffic in dynamic settings and as well as more generally the study of optimization, equilibrium problems and their applications in both dynamic and static settings. She has received a number of awards for her research including the CAREER / PECASE award through the National Science Foundation. She was the recipient of the Graduate Teaching Award for the Sloan School of Management for excellence in teaching. She received the Sloan Career Development Chair and later the J. Spencer Standish Chair. Perakis has been an Associate Editor for Management Science, and is currently an Area Editor of Networks and Spatial Economics, the editor in Chief for Pricing and Revenue Management, and an Associate Editor for Naval Research Logistics. She was a member of the INFORMS Council and the chair of the Pricing and Revenue Management Section of INFORMS.
TITLE: Multi-Period Pricing of Perishable Products;
 Competition, Uncertainty and Learning

Abstract: In this paper we discuss a model for dynamically pricing multiple perishable products that sellers need to sell over a finite time horizon (i.e. in this setting, each seller has a fixed inventory of several products that he/she needs to sell over a finite time horizon).  We are considering an oligopolistic market and assume that sellers compete through pricing. Applications in mind include pricing
airline tickets in the face of competitor airlines, as well as selling seasonal products in the retail industry in the presence of competitors. The model we present addresses the competitive aspect of the problem but also the presence of demand uncertainty. In particular, we propose a model that uses ideas from quasi-variational inequalities (in order to address the aspect of competition) and
ideas from robust optimization (in order to address uncertainty of demand). The latter allows us to propose a model that is tractable and does not assume any particular type of distribution for the uncertain parameters of demand. Furthermore, time permitting, we will discuss how we enhance the model to include a setting where sellers learn their demand and try to understand their competitors' demands as they collect more data on prices for them and their competitors as time progresses and the selling horizon unfolds. We use ideas from MPECs  to model this enhanced model of joint pricing and demand learning. Finally we discuss some insights.

This series is organized by the UMASS Amherst INFORMS Student Chapter. Support for this series is provided by the Isenberg School of Management, the Department of Finance and Operations Management, INFORMS, and the John F. Smith Memorial Fund. The Chapter wishes to thank Professor Anna Nagurney, its Faculty Advisor, for her help and  support of this series.

For questions, please contact the INFORMS Student Chapter Representative, Ms. Tina Wakolbinger, wakolbinger@som.umass.edu