Abstract
Two essays related to operations management are included in this thesis.In the first essay, we consider the fleet repositioning problem for a free-floating vehicle sharing system. The objective is to decide on the vehicle distribution dynamically in the network to maximize the long-run average social welfare, i.e., to match the vehicle supply and travel demand at the least total cost of repositioning and lost sales. We formulate the problem as a Markov decision process by considering an ex ante committed vehicle distribution decision in each period. Interestingly, we demonstrate that a balanced myopic policy is optimal, i.e., it is optimal to maintain the vehicle distribution which best matches the vehicle supply and trip demand. We also extend our results to systems with seasonal demand. The optimality of the (generalized) balanced myopic policy overcomes the curse of dimensionality. Our results suggest a simple and effective solution procedure for fleet repositioning, and shed light on how to design effective heuristics. We demonstrate that the solutions under the balanced myopic policy are optimal and dramatically reduce the computational complexity by quantifying the operational values in a counterfactual case study of a real-world vehicle sharing system.
In the second essay, we investigate the advance selling and service cancellation decision making problems for financially distressed sellers. Advance selling is typically studied under the contexts of the service industry and the retail industry. Advance selling and service cancellation is also commonly adopted in the real estate industry and the crowdfunding projects. One of the salient features of both sectors is that firms typically are financially constrained. In this paper, we investigate the role of debt in offering advance selling and service cancellation. First, we formulate advance selling without refund in the presence of debt by a two-period model with a seller and homogeneous customers. Customers are subject to two uncertain consumption states. Intuitively, the presence of the debt makes the seller risk-averse. As a result, advance selling should be recommended when the debt is large enough. By contrast, we find that a low or medium, not high debt level, can motivate the seller to offer advance selling. In particular, when the product cost is large, we find that there always exists a debt level that makes advance selling better off regardless of the distribution of uncertain state. Thus, when to offer advance selling can be driven by debt, and it is more applicable than what we previously thought. We then investigate when to offer refund in advance selling by a three-consumption state model. We find that refund and advance selling is complementary when the partial refund is larger than the product cost. Our results provide a new explanation, i.e., the presence of debt, for the popularity of advance selling and service cancellation in the real estate industry and the crowdfunding firms. Our results also underscore the importance of debt in offering advance selling and service cancellation.
| Date of Award | 19 Aug 2022 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Yimin YU (Supervisor) |