This paper develops a framework for examining the effect of demand uncertainty and forecast error on unit costs and customer service levels in the supply chain, including Material Requirements Planning (MRP) type manufacturing systems. The aim is to overcome the methodological limitations and confusion that has arisen in much earlier research. To illustrate the issues, the problem of estimating...

Data-driven sequential decision has found a wide range of applications in modern operations management, such as dynamic pricing, inventory control, and assortment optimization. Most existing research on data-driven focuses designing an online policy to maximize the revenue. However, uncertainty quantification underlying true model function (e.g., demand function), critical problem for practitio...

With respect to a two-echelon supply chain comprised of retailer and capital-constrained supplier, this paper investigates the effect guarantee on accounts receivable financing with consideration retailer’s default risk three scenarios: no guarantee, third-party offers partial credit (PCG), management company (SCMC) repurchase guarantee. By Stackelberg game model, study finds that: when offer P...

Wind imposes costs on power systems due to uncertainty and variability of real-time resource availability. Stochastic programming and demand response are offered as two possible solutions to mitigate these so-called wind-uncertainty costs. We examine the benefits of these two solutions, and show that although both will reduce wind-uncertainty costs, demand response is significantly more effecti...

We consider a seller with uncertain demand for its product. If the demand curve were certain, then setting price and setting quantity would be equivalent ways to frame the seller’s problem of choosing a profit-maximizing point on its demand curve. With uncertain demand, these become distinct sales mechanisms. We distinguish between uncertainty about the market size and uncertainty about the con...