Lecture topic: A Responsive-Pricing Retailer Sourcing from Competing Suppliers Facing Disruptions
Keynote speaker:Tao Li
Lecture time: 18:30 on July 4rd
Venue: 308, scientific research building
Abstract
We study a problem of a retailer who orders from two competing strategic suppliers subject to independent or correlated disruptions and responds by setting the retail price upon delivery, which we call responsive-pricing. The suppliers compete by setting their wholesale prices. We model this problem as a Stackelberg-Nash game with the suppliers as the leaders and the retailer as the follower, and obtain its equilibrium explicitly. We perform sensitivity analyses with respect to suppliers' production costs, reliabilities, and their correlation. Surprisingly, we find that an increase in the reliability of a supplier may, counter to our intuition, hurt him due to responsive-pricing. Furthermore, in contrast to literature, we find that a high disruption correlation may benefit a supplier who has a cost advantage, because of responsive-pricing, and total order quantity may increase in that correlation due to intense suppliers competition. This paper has important implications for unreliable suppliers because how reliability and
correlation influence their profits depends on the retailer's pricing power and the competition intensity between the suppliers. With a responsive-pricing retailer, a supplier may not benefit from a higher reliability but may benefit from a higher correlation. This explains why a supplier that has a cost advantage may have the incentive to create a positively correlated supply network by building plants in the same geographic location with his competitor, or choosing the same tier 2 supplier to form a ``diamond-shaped supply chain strategically.
TAO LI
Associate Professor
Department of Information Systems and Analytics Leavey School of Business
Santa Clara University
500 El Camino Real, Santa Clara, CA 95053
Phone: (408) 554-6951
email: tli1@scu.edu
Education
The University of Texas at Dallas, Richardson, TX
1. Ph.D., Operations Management, (GPA 3.9) Advisor: Suresh P. Sethi, August 2012
2. M.S., Supply Chain Management, (GPA 3.9), May 2012
3. M.B.A., Business Administration, (GPA 3.9), May 2011
The State University of New York at Buffalo, Buffalo, NY
1. Ph.D. Candidate in Industrial and Systems Engineering, Transferred (GPA 4.0), August 2006-May 2007
Tianjin University, Tianjin, China
1. M.S., Management Science and Engineering (Straight-A Student Award), March 2006
2. B.S., Financial Management, July 2003
3. B.S., Material Science and Engineering (Certificate of Excellent Student), July 2003
Academic Position
1. Associate Professor (with Tenure), Department of Information Systems and Analytics-March 2018-Present, Leavey School of Business, Santa Clara University, Santa Clara, CA
2. Assistant Professor, Department of Information Systems and Analytics - September2012-March 2018, Leavey School of Business, Santa Clara University, Santa Clara, CA
3. Visiting Professor, School of Management - August 2018-September 2018, Fudan University, Shanghai, China
4. Visiting Professor, School of Management - July 2018-August 2018, USTC, Hefei, China
Industry Experience
1. Graduation Internship, Quality Assurance Department, August 2005 - October 2005, Procter & Gamble (Tianjin) Co., Ltd.
2. Motorola Second Campus Internship, Human Resource Department, May 2005 - August 2005, Motorola (China) Electronics Co., Ltd.
3. Part-Time Quality Engineer, Quality Assurance Department, March 2005 - May 2005, FujiTsu (Tianjin) Electronics Co., Ltd.
4. Part-Time Interpreter, January 2005-February 2005, Woodward (Tianjin) Controls Co., Ltd.
5. Volunteer, September 2003-February 2005, Key Laboratory for Advanced Ceramics and Machining Technology of Ministry of Education of China, Tianjin University
Honors and Awards
1. Member of INFORMS, MSOM, POMS, DSI, CSAMSE, Phi Kappa Phi, Beta Gamma Sigma
2. The ACE (Accelerated Cooperative Education Leadership Program) Outstanding Faculty Award, 2019
3. Tao Li (PI). SCU Leavey Research Grant ($7,800), 2018-2020
4. The honorable mention for 2018 POMS Wickham Skinner Best Paper Award, 2018
5. Tao Li (PI). Santa Clara University Sustainability Research Grant: $15,000, 2017-2019
6. Tao Li (Co-PI). Operations Optimization of Fresh Product Supply Chains in the Low - Carbon
7. Environment. National Natural Science Foundation of China (NSFC#71572058): RMB 460,000 (Appr. $72,327), 2016-2020
8. Tao Li (PI). SCU Leavey Research Grant: $3,000, 2017-2019
9. SCU Leavey School of Business Extraordinary Teaching Award: $250, 2017-2018
10. SCU Leavey School of Business Extraordinary Research Award: $250, 2016-2017
11. SCU Leavey School of Business Extraordinary Teaching Award: $250, 2016-2017
12. Tao Li (Co-PI, with Graeme Warren and Fouad Mirzaei) Enhancing Teaching with Technology Grant: $4,500, June 2016
13. The ACE (Accelerated Cooperative Education Leadership Program) Outstanding Faculty Award: Mar 2016
14. SCU Leavey School of Business Extraordinary Teaching Award: $800, 2014-2015
15. SCU Junior Faculty Development Leave Grant: $3,000, 2015-2017
16. Tao Li (PI). SCU Leavey Research Grant: $4,000, 2015-2017
17. Tao Li (PI). SCU University Research Grant: $5,000, 2015-2017
18. SCU Leavey School of Business Extraordinary Research Award: $800, 2013-2014
19. SCU Leavey School of Business Extraordinary Teaching Award: $800, 2013-2014
20. Tao Li (PI). SCU Leavey Research Grant: $4,000, 2014-2016
21. Tao Li (PI). SCU University Research Grant: $2,000, 2014-2016
22. Tao Li (PI). SCU Leavey Research Grant: $4,000, 2013-2015
Publications
1. Meng Li, Tao Li. 2018. Consumer Search, Transshipment, and Bargaining Power in a Supply Chain, International Journal of Production Research, 56(10), 3423-3438.
2. Tao Li, Suresh P. Sethi, Jun Zhang. 2017. Mitigating Supply Uncertainty: The Interplay Between Diversification and Pricing, Production and Operations Management, 26(3), 369-388.The honorable mention for 2018 POMS Wickham Skinner Best Paper Award.
3. Tao Li, Suresh P. Sethi. 2017. A Review of Dynamic Stackelberg Game Models, Discrete and Continuous Dynamical Systems - Series B, 22(1), 125-159.
4. Tao Li, Suresh P. Sethi, Xiuli He. 2015. Dynamic Pricing, Production, and Channel Coordination with Stochastic Learning, Production and Operations Management, 24(6), 857-882.
5. Tao Li, Suresh P. Sethi, Jun Zhang. 2014. Supply Diversification with Isoelastic Demand, Interna- tional Journal of Production Economics, 157, 2-6.
6. Tao Li, Suresh P. Sethi, Jun Zhang. 2013. How Does Pricing Power Affect a Firm's Sourcing Decisions from Unreliable Suppliers? International Journal of Production Research, 51(23-24), 6990-7005. International Journal of Production Research 50th volume anniversary special issue (by invitation only).
7. Tao Li, Suresh P. Sethi, Jun Zhang. 2013. Supply Diversification with Responsive Pricing, Production and Operations Management, 22(2), 447-458.
8. Ernan Haruvy, Tao Li, Suresh P. Sethi. 2012. Two-Stage Pricing for Custom-Made Products, European Journal of Operational Research, 219(2), 405-414.
9. Tao Li, Zhen He, Jingliang Li. 2006. A Study on the Information System of Quality Chain Management, Industrial Engineering Journal (in Chinese), 9(6), 18-21.
Project supported by National Natural Science Foundation of China (Grant No. 70372062).
10. Juan Zhao, Zheng-Guo Jin, Tao Li, Xiao-Xin Liu, Zhi-Feng Liu. 2006. Growth of ZnO Nanarods by the Chemical Solution Method with Assisted Electrical Field, Journal of the American Ceramic Society, 89(8), 2654-2659.
Project supported by Natural Science Foundation of Tianjin (Grant No. 033802311).
11. Juan Zhao, Zheng-Guo Jin, Tao Li, Xiao-Xin Liu. 2006. Preparation and Characterization of ZnO Nanorods from NaOH Solutions with Assisted Electrical Field, Applied Surface Science, 252(23), 8287-8294.
Project supported by Natural Science Foundation of Tianjin (Grant No. 033802311).
12. 12. Juan Zhao, Zheng-Guo Jin, Tao Li, Xiao-Xin Liu. 2006. Nucleation and Growth of ZnO Nanorods on the ZnO-Coated Seed Surface by Solution Chemical Method, Journal of the European Ceramic Society, 26(13), 2769-2775.
Project supported by Natural Science Foundation of Tianjin (Grant No. F103004).
Proceedings
1. Tao Li, Suresh P. Sethi, Xiuli He. 2014. Pricing, Production, and Channel Coordination with Stochastic Learning, Proceedings of the 15th Asia Pacific Industrial Engineering & Management Systems Conference (APIEMS 2014).
Submitted/Working papers
1. Xi Shan, Tao Li, Suresh P. Sethi. A Responsive Pricing Retailer Sourcing from Competing Suppliers Facing Disruptions. Under second-round revision in Manufacturing & Service Operations Management.
2. Meng Li, Tao Li. Selling to the Regretful Newsvendor. Under Review in Manufacturing & Service Operations Management.
3. Jingna Ji, Tao Li, Lei Yang. Low-Carbon Strategies for Competing Firms under Cap-and-Trade Regu- lation with Consumer Preference. Target Journal: Production and Operations Management.
4. Tao Li, Suresh P. Sethi. Coordinating Contracts and Feedback Stackelberg Equilibrium. Target Journal: Management Science.
5. Tao Li, Xiuli He, Suresh P. Sethi. Strategic Inventories with Stochastic Learning. Target Journal: Management Science.
Works in progress
1. Tao Li, Hau Lee. The Bertrand Competition between the Manufacturer and Its Unreliable Suppliers with Random Yield.
2. Xi Shan, Tao Li, Suresh P. Sethi. A Committed Pricing Retailer Sourcing from Competing Suppliers facing Disruption.
3. Tao Li, Suresh P. Sethi, Jun Zhang. Supply Diversification with Strategic Suppliers.
4. Tao Li, Suresh P. Sethi, Xiuli He. Myopic or Far-Sighted? Competition Strategies with Stochastic Learning.
