Title of Presentation: Paying More to Get it Faster: What, When, and How

Abstract:

This talk gives an overview of my and others research in leadtime-based pricing. We consider the what, when, and how of paying more to get a product or service faster, particularly in capacity constrained settings. Canonical applications include custom furniture and DNA testing. At the time of ordering customers may be presented with a menu of leadtimes and prices, just as companies like Amazon do for delivery times. However, due to the provider’s capacity constraints these leadtimes need to reflect what can actually be produced (and when). Most of the talk considers a make-to-order manufacturer or service provider whose customers are time sensitive. Particular aspects considered are: non-linear waiting cost curves, heterogeneous customers, and quotes that affect customer satisfaction. The methodology of the work consists of various forms of stochastic modelling. However, there has also been some behavioural experiments to get a better sense of the correct form for the cost of waiting relative to what is quoted, and this will also be presented briefly.

Bio

Dr. Tava Olsen is Professor of Melbourne Business School as their new Deputy Dean, Academic. Tava’s research interests include supply-chain management; pricing and inventory control; and stochastic modelling of manufacturing, service, agricultural, and healthcare systems. Tava is currently the Area Editor for Operations and Supply Chain at Operations Research and a senior editor of Production and Operations Management (POM). She has previously served as an Associate Editor for Management Science and Manufacturing and Services Operations Management (M&SOM), and was the Topical Editor for Supply-Chain Management for the Wiley Encyclopaedia of Operations Research and Management Science. She is a past president of the Manufacturing and Service Operations (MSOM) society and has thrice been awarded the Auckland Business School’s research excellence award. Among other journals, her publications have appeared in Management Science, Operations Research, M&SOM, and POM. Tava has been awarded over $3 million dollars of external funding over her career, including being a recipient of the prestigious NSF CAREER award and RSNZ Marsden grant.