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15.764

The Theory of Operations Management

3-0-9 units · Graduate

Provides mathematical foundations underlying the theory of operations management. Covers both classic and state-of-the-art results in various application domains, including inventory management, supply chain management and logistics, behavioral operations, healthcare management, service industries, pricing and revenue management, and auctions. Studies a wide range of mathematical and analytical techniques, such as dynamic programming, stochastic orders, principal-agent models and contract design, behavioral and experimental economics, algorithms and approximations, data-driven and learning models, and mechanism design. Also provides practical experience in how to apply the theoretical models to solve OM problems in business settings. Specific topics vary from year to year.

Spring 2004

Topics

  • Organizational Session
  • Eppen, Gary, and Linus Schrage. “Centralized Ordering Policies in a Multi-Warehouse System with Lead times and Random Demand.”
  • Graves, Stephen. “A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment.”
  • Roundy, Robin. “98%-Effective Integer-Ratio Lot Sizing for One-Warehouse Multi-Retailer Systems.”
  • Rosling, K. “Optimal Inventory Policies for Assembly Systems Under Random Demand.”
  • Gallien, Jérémie, and Lawrence Wein. “A Simple and Effective Component Procurement Policy for Stochastic Assembly Systems.”
  • Lu, Yingdong, and Jing-Sheng Song. “Order-Based Cost Optimization in Assemble-to-Order Systems.”
  • Wang, Y., and P. Glasserman. “Lead-time Inventory Trade-offs in Assemble-to-order Systems.”
  • Plambeck, Erica, and Amy Ward. “Optimal Control of High-Volume Assemble-to-Order Systems.”
  • Heath, D. C., and P. L. Jackson. “Modeling the Evolution of Demand Forecasts with Application to Safety Stock Analysis in Production/Distribution Systems.”
  • Graves, Stephen, D. B. Kletter and W. B. Hetzel. “A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization.”
  • Toktay, Beryl L., and Lawrence M. Wein. “Analysis of a Forecasting-Production-Inventory System with Stationary Demand.”
  • Fisher, Marshall, and A. Raman. “Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales.”
  • Kurawarwala, A., and H. Matsuo. “Forecasting and Inventory Management of Short Life-Cycle Products.”
  • Ho, Teck-Hua, Sergei Savin, and Christian Terwiesch. “Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint.”
  • Fisher, Marshall, and Kumar Rajaram. “Accurate Retail Testing of Fashion Merchandise: Methodology and Application.”
  • Mahajan, Siddharth, and Garrett van Ryzin. “Stocking Retail Assortments Under Dynamic Consumer Substitution.”
  • Bitran, Gabriel, P. Rocha e Oliveira, and A. Schilkrut. “Managing Customer Relationships Through Price and Service Quality.”
  • Talluri, Kalyan, and Garrett van Ryzin. “Revenue Management Under a General Discrete Choice Model of Consumer Behavior.”
  • Whitt, Ward. “Improving Service by Informing Customers About Anticipated Delays.”
  • Harrison, Michael J., and Assaf Zeevi. “A Method for Staffing Large Call Centers Based on Stochastic Fluid Models.”
  • Pinker, Edieal J., and Robert A. Shumsky. “The Efficiency-Quality Trade-Off of Cross-Trained Workers.”
  • Armony, Mor, and Costis Maglaras. “On Customer Contact Centers with a Call-Back Option: Customer Decisions, Routing Rules and System Design.”
  • Shumsky, Robert A., and Edieal J. Pinker. “Gatekeepers and Referrals in Services.”

Readings

  • Survey for Part I:
    Listed reading
  • Muckstadt, J.A., and R.O. Roundy. “Centralized Planning Models for Multi-Echelon Inventory Systems under Uncertainty.” Chapter 3 in Handbooks in Operations Research and Management Science . Vol. 4, Logistics of Production and Inventory , edited by S. Graves, A. H. G. Rinnooy Kan, and P. Zipkin. Amsterdam: North-Holland, 1993, 59-132
    Listed reading
  • Federgruen, A. “Continuous Review Policies for Multi-Level Inventory Systems with Stochastic Demand.” Chapter 4 in Handbooks in Operations Research and Management Science. Vol. 4, Logistics of Production and Inventory, edited by S. Graves, A. H. G. Rinnooy Kan, and P. Zipkin. Amsterdam: North-Holland, 1993, 133-74.
    Listed reading
  • LEC #: 2 · TOPICS: Eppen, Gary, and Linus Schrage. “Centralized Ordering Policies in a Multi-Warehouse System with Lead times and Random Demand.” · READINGS: Eppen, Gary, and Linus Schrage. “Centralized Ordering Policies in a Multi-Warehouse System with Lead times and Random Demand.” TIMS Studies in the Management Sciences. Vol. 16, Multi-Level Production/Inventory Control Systems, Theory and Practice, edited by Leroy B. Schwarz. Amsterdam: North-Holland, 1981.
    Reading assignment
  • LEC #: 3 · TOPICS: Graves, Stephen. “A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment.” · READINGS: Graves, Stephen. “A Multi-Echelon Inventory Model for a Repairable Item with One-for-One Replenishment.” Management Science 31, no. 10 (1985).
    Reading assignment
  • LEC #: 4 · TOPICS: Roundy, Robin. “98%-Effective Integer-Ratio Lot Sizing for One-Warehouse Multi-Retailer Systems.” · READINGS: Roundy, Robin. “98%-Effective Integer-Ratio Lot Sizing for One-Warehouse Multi-Retailer Systems.” Management Science 31, no. 11 (1985): 1416-30.
    Reading assignment
  • Survey for Part II:
    Listed reading
  • Song, Jing-Sheng, and Paul Zipkin. “Supply Chain Operations: Assemble-to-Order Systems.” Chapter 11 in Handbooks in Operations Research and Management Science. Vol. 30, Supply Chain Management, edited by T. De Kok, and S. Graves. Amsterdam: North-Holland, 2003.
    Listed reading
  • LEC #: 5 · TOPICS: Rosling, K. “Optimal Inventory Policies for Assembly Systems Under Random Demand.” · READINGS: Rosling, K. “Optimal Inventory Policies for Assembly Systems Under Random Demand.” Operations Research 43, no. 6 (1989).
    Reading assignment
  • LEC #: 6 · TOPICS: Gallien, Jérémie, and Lawrence Wein. “A Simple and Effective Component Procurement Policy for Stochastic Assembly Systems.” · READINGS: Gallien, Jérémie, and Lawrence Wein. “A Simple and Effective Component Procurement Policy for Stochastic Assembly Systems.” Queueing Systems Theory and Applications 38, no. 2 (2001).
    Reading assignment
  • LEC #: 7 · TOPICS: Lu, Yingdong, and Jing-Sheng Song. “Order-Based Cost Optimization in Assemble-to-Order Systems.” · READINGS: Lu, Yingdong, and Jing-Sheng Song. “Order-Based Cost Optimization in Assemble-to-Order Systems.” 2003. To appear in Operations Research .
    Reading assignment
  • LEC #: 8 · TOPICS: Wang, Y., and P. Glasserman. “Lead-time Inventory Trade-offs in Assemble-to-order Systems.” · READINGS: Wang, Y., and P. Glasserman. “Lead-time Inventory Trade-offs in Assemble-to-Order Systems.” Operations Research 43, no. 6 (1998).
    Reading assignment
  • LEC #: 9 · TOPICS: Plambeck, Erica, and Amy Ward. “Optimal Control of High-Volume Assemble-to-Order Systems.” · READINGS: Plambeck, Erica, and Amy Ward. “Optimal Control of High-Volume Assemble-to-Order Systems.” Stanford, CA: Stanford University, 2003.
    Reading assignment
  • LEC #: 10 · TOPICS: Heath, D. C., and P. L. Jackson. “Modeling the Evolution of Demand Forecasts with Application to Safety Stock Analysis in Production/Distribution Systems.” · READINGS: Heath, D. C., and P. L. Jackson. “Modeling the Evolution of Demand Forecasts with Application to Safety Stock Analysis in Production/Distribution Systems.” IIE Transactions 26, no. 3 (1994): 17-30.
    Reading assignment
  • LEC #: 11 · TOPICS: Graves, Stephen, D. B. Kletter and W. B. Hetzel. “A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization.” · READINGS: Graves, Stephen, D. B. Kletter, and W. B. Hetzel. “A Dynamic Model for Requirements Planning with Application to Supply Chain Optimization.” Operations Research 46, supp. no. 3 (1998): S35-49.
    Reading assignment
  • LEC #: 12 · TOPICS: Toktay, Beryl L., and Lawrence M. Wein. “Analysis of a Forecasting-Production-Inventory System with Stationary Demand.” · READINGS: Toktay, Beryl L., and Lawrence M. Wein. “Analysis of a Forecasting-Production-Inventory System with Stationary Demand.” Management Science 47, no. 9 (2001): 1268-81.
    Reading assignment
  • LEC #: 13 · TOPICS: Fisher, Marshall, and A. Raman. “Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales.” · READINGS: Fisher, Marshall, and A. Raman. “Reducing the Cost of Demand Uncertainty Through Accurate Response to Early Sales.” Operations Research 44, no. 1 (1996): 87-99.
    Reading assignment
  • LEC #: 14 · TOPICS: Kurawarwala, A., and H. Matsuo. “Forecasting and Inventory Management of Short Life-Cycle Products.” · READINGS: Kurawarwala, A., and H. Matsuo. “Forecasting and Inventory Management of Short Life-Cycle Products.” Operations Research 44, no. 1 (1996): 131-50.
    Reading assignment
  • LEC #: 15 · TOPICS: Ho, Teck-Hua, Sergei Savin, and Christian Terwiesch. “Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint.” · READINGS: Ho, Teck-Hua, Sergei Savin, and Christian Terwiesch. “Managing Demand and Sales Dynamics in New Product Diffusion Under Supply Constraint.” Management Science 48, no. 2 (2002): 187-206.
    Reading assignment
  • LEC #: 16 · TOPICS: Fisher, Marshall, and Kumar Rajaram. “Accurate Retail Testing of Fashion Merchandise: Methodology and Application.” · READINGS: Fisher, Marshall, and Kumar Rajaram. “Accurate Retail Testing of Fashion Merchandise: Methodology and Application.” Marketing Science 19, no. 3 (2000): 266-78.
    Reading assignment
  • Textbook/Survey for Part V:
    Listed reading
  • Anderson, Simon, Andre de Palma, and Jacques-Francois Thisse. Discrete Choice Theory of Product Differentiation . Cambridge, MA: MIT Press, 1992. ISBN: 026201128X.
    Listed reading
  • LEC #: 17 · TOPICS: Mahajan, Siddharth, and Garrett van Ryzin. “Stocking Retail Assortments Under Dynamic Consumer Substitution.” · READINGS: Mahajan, Siddharth, and Garrett van Ryzin. “Stocking Retail Assortments Under Dynamic Consumer Substitution.” Operations Research 49, no. 3 (2001): 334-51.
    Reading assignment
  • LEC #: 18 · TOPICS: Bitran, Gabriel, P. Rocha e Oliveira, and A. Schilkrut. “Managing Customer Relationships Through Price and Service Quality.” · READINGS: Bitran, Gabriel, P. Rocha e Oliveira, and A. Schilkrut. “Managing Customer Relationships Through Price and Service Quality.” Cambridge, MA: MIT Sloan School of Management, 2003.
    Reading assignment
  • LEC #: 19 · TOPICS: Talluri, Kalyan, and Garrett van Ryzin. “Revenue Management Under a General Discrete Choice Model of Consumer Behavior.” · READINGS: Talluri, Kalyan, and Garrett van Ryzin. “Revenue Management Under a General Discrete Choice Model of Consumer Behavior.” Barcelona, Spain: Universitat Pompeu Fabra, 2000. To appear in Management Science .
    Reading assignment
  • Survey for Part VI:
    Listed reading
  • Gans, Noah, Ger Koole, and Avishai Mandelbaum. “Telephone Call Centers: A Tutorial and Literature Review.” Manufacturing and Service Operations Management 5, no. 2 (2003): 79-141.
    Listed reading
  • LEC #: 20 · TOPICS: Whitt, Ward. “Improving Service by Informing Customers About Anticipated Delays.” · READINGS: Whitt, Ward. “Improving Service by Informing Customers About Anticipated Delays.” Management Science 45, no. 2 (1999): 192-207.
    Reading assignment
  • LEC #: 21 · TOPICS: Harrison, Michael J., and Assaf Zeevi. “A Method for Staffing Large Call Centers Based on Stochastic Fluid Models.” · READINGS: Harrison, Michael J., and Assaf Zeevi. “A Method for Staffing Large Call Centers Based on Stochastic Fluid Models.” Stanford, CA: Stanford University, 2003.
    Reading assignment
  • LEC #: 22 · TOPICS: Pinker, Edieal J., and Robert A. Shumsky. “The Efficiency-Quality Trade-Off of Cross-Trained Workers.” · READINGS: Pinker, Edieal J., and Robert A. Shumsky. “The Efficiency-Quality Trade-Off of Cross-Trained Workers.” Manufacturing and Service Operations Management 2, no. 1 (2000): 32-48.
    Reading assignment
  • LEC #: 23 · TOPICS: Armony, Mor, and Costis Maglaras. “On Customer Contact Centers with a Call-Back Option: Customer Decisions, Routing Rules and System Design.” · READINGS: Armony, Mor, and Costis Maglaras. “On Customer Contact Centers with a Call-Back Option: Customer Decisions, Routing Rules and System Design.” Operations Research 52, no. 2 (2004): 271-92.
    Reading assignment
  • LEC #: 24 · TOPICS: Shumsky, Robert A., and Edieal J. Pinker. “Gatekeepers and Referrals in Services.” · READINGS: Shumsky, Robert A., and Edieal J. Pinker. “Gatekeepers and Referrals in Services.” Management Science 49, no. 7 (2003): 839-56.
    Reading assignment

Prerequisites & course information

Same subject as 1.271[J] , IDS.250[J] Prereq: ( 6.7210[J] and 6.7700[J] ) or permission of instructor G (Spring) 3-0-9 units Can be repeated for credit.

Sources