Hong Kong University of Science and Technology



Department of Information and Systems Management

School of Business and Management

Hong Kong University of Science and Technology

Seminar Announcement

Effective Supply Capability and

Stability in Supply Order Fulfillment

by

Professor John J. Liu

The Hong Kong Polytechnic University

12 May 2006 (Friday)

3:30pm – 4:30pm

Room 3399 (L17/18)

((((( All interested are welcome (((((

Abstract

For a dynamic retailer-supplier order fulfillment system, we show (and verify) that the optimal order policy is of dynamic (s, S) type. We then examine the stability of retailer’s inventories under the optimal order policy, particularly in relation to the inventory target (i.e., order-up-to level, S) which translates to the requirement of effective supply capacity. Over an infinite horizon, we obtained two findings of instability which can be a vital cause of bullwhip effect: 1) Trajectory of retail inventory position tends to be non-stationary under nonnegative (s, S) ordering (e.g., no returned orders allowable). 2) Trajectory of optimal inventory target is unstable in the manner of divergent oscillation, i.e., an infinitesimal disturbance will cause the optimal target to oscillate divergently.

Biography

John Liu is a Chair Professor of Maritime Studies, and Head of Department of Logistics, The Hong Kong Polytechnic University. Dr. Liu obtained a BSc degree in Marine Automation and an MSc in Marine Systems Engineering, both from the Marine Engineering Department of Huazhong University of Science and Technology (China); and he then received MSc. degree in Engineering-Economic Systems from Stanford University and Ph.D. degree in Industrial Engineering from the Pennsylvania State University.

His primary research interests are in the areas of stochastic production systems, incentive games, and maritime logistics. His current research focuses on incentive problems in supply contract, time-series analysis of supply chain operations, marine insurance and risk analysis, and maritime rescue information and simulation systems. Recent notable work of his also includes The Art of War of Sun Zi’s (孙子兵法) in logistics, feedback incentive games, maritime search and rescue models, and impulse supply order fulfillment (SOF) systems. He has published in journals such as Operations Research, Management Science, IIE Transactions, IEEE Transactions on Engineering Management, European Journal of Operational Research, and among others. He is a member of INFORMS and IIE. All of his research works are based on, and most are supported by, industrial applications at companies such as GE-Medical Systems, Johnson Controls, Kohler, and Harley-Davidson. Dr. Liu has been regarded by the peers as the few top Chinese researchers in US, who can not only teach but also work with top corporate executives.

During his four-year term (1998 – 2002) as the Area Chair of OM at the Business School, University of Wisconsin-Milwaukee, Dr. Liu has reengineered the complete OM curriculum, established a strong industry-based research network, and directed the Center for Innovative Manufacturing and Operations Management (CIMOM).

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