Title: A Multi-Period Commit-Then-Adjust Strategy under Convex and Piecewise-Linear Costs

Speaker: Tianhu Deng

Time: December 10th, 2025 (Wednesday) 15:00

Venue: 405, School of Business, East China University of Science and Technology

Organizer: School of Business, East China University of Science and Technology

Guest Bio:
  Tianhu Deng is Executive Dean and Professor at the School of Business, Soochow University, and a recipient of the National High-Level Talent Program. He received his Bachelor's degree in Industrial Engineering from Tsinghua University in 2008 and his Ph.D. from the University of California, Berkeley in 2013. His research focuses on methodological frameworks and enterprise solutions for smart supply chains. His research has been published in international journals such as Operations Research, Manufacturing & Service Operations Management, INFORMS Journal on Computing, and Interfaces.

Synopsis:

 Inspired by fast-fashion firms like Shein that gain advantage by combining multiple forms of order flexibility, we study a commit-then-adjust strategy in a retailer-supplier supply chain with multiple shipments. Orders can be adjusted in two directions, both in time (deferral, expedition) and in quantity (volume increases, cancellations). Using a dynamic programming model that tracks pipeline shipments, we prove that under convex and piecewise-linear adjustment costs, the optimal adjustment follows an additive base-stock policy: each adjustment region operates with the classic base-stock policy, and the optimal adjusted value equals the sum of these regional decisions. This structure clarifies how different flexibilities reshape decisions and performance. Contrary to common belief, timing and quantity flexibilities can be strategic complements-greater cancellation flexibility, for example, increases the value of expediting. Furthermore, more flexibility does not always reduce initial orders; greater ability to expedite or cancel encourages higher upfront commitments.