Principal Investigator: Prof. Guillermo Gallego
The design and pricing of products and services are increasingly important due to technological changes, new offers from competitors, and changes in consumer tastes. A research project led by Prof. Guillermo Gallego addresses this problem by optimally selecting the attributes to be included in a product, the quality level of each included attribute, and the product's price. The work is done in the context of consumer choice models. They have shown that their design is win-win for the multinomial logit model, the most commonly used choice model, in the sense that it simultaneously maximizes the firm's profit and the expected consumer surplus. His group is extending the results to other choice models, and working with companies on the design and pricing of services in the knowledge economy, including cloud computing and airline fares.
Asymptotic Analysis of Inventory Problems with High Dimensional State Spaces
Principal Investigator: Prof. Rachel Zhang and Prof. Jiheng Zhang
Research by Prof. Rachel Zhang and Prof. Jiheng Zhang is tackling inventory problems with higher dimensional state spaces. Such challenges arise when it is necessary to track a series of events to make optimal decisions regarding inventory. Using the fresh angle of asymptotic behavior, preliminary results have suggested that the approach may lead to simpler management procedures for highly complex inventory systems than current heuristic policies.