I propose to study how to best use reactive operations in industries facing constant and unpredictable changes on demand and supply conditions. While there is general agreement that reactivity is beneficial when products are innovative, exhibit high sales uncertainty and have short life-cycles, few models explain the details of how to build and execute such strategies. This requires modelling flexible production processes, designing cost-effective dynamic stores and modelling the dynamics of demand, at the micro-level. In this project I will study how firms can become more reactive. First, it is important to develop richer demand models, dynamic and stochastic in nature and capable of accommodating consumer choice within the available product assortment, focusing on fashion dynamics in apparel retailing, where micro-trends will be studied. We plan collecting actual sales data from companies in the industry and constitute a Fashion Observatory that will centralize information, produce periodic reports and become a world knowledge centre for the industry. Second, we will understand how to design better dynamic store policies with building models for optimizing product assortment based on a changing set of available products, product quantities (limited to inventory availability constraints) and product prices (possibly with constraints to avoid strategic behaviour from customers) over time, focusing on the dynamic nature of the decisions. Third, we see how to build and use flexibility in production and distribution processes with special attention devoted to including operational details relevant for European manufacturers. Our results will help them leverage their closer position to the EU markets. The project will create better models for reactive operations, based on analytical work and data mining. These better models and data will open new directions for academic research and can be transferred to industry practice, especially in retail but also in manufacturing.
Call for proposal
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Funding SchemeERC-SG - ERC Starting Grant
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