• Industrial Engineering and Management Systems
• /
• v.8 no.2
• /
• pp.72-79
• /
• 2009

The ultimate goal of inventory management is to decide the timing and the quantity of ordering in response to uncertain demands. Recently, some researchers have focused upon an impact of distortions in the information, e.g., customer order cancellation, on an economical inventory policy. The customer order cancellation is considered a kind of distortions in demands, because a demand that is eventually cancelled is equivalent to a phony demand. Also, there are some additional distortions in the inventory information. For instance, the procurement of suppliers may include some nonconforming items as a result of imperfect production and inspection by the suppliers, and/or damage in transit. The nonconforming item should be considered a kind of distortions in the inventory information, because the nonconforming item is equivalent to a phony stock. In this article, we consider an inventory model under the situation that customers can cancel their orders and the procurement of suppliers may include some nonconforming items. Then, we introduce the customer order reservation into the inventory model for the purpose of avoiding the costly backlogs, because the customer order reservation gives retailers a period to fulfill customer's requests. We formulate a periodic review (s, S) inventory model and investigate the economical operation under the situation mentioned above. Further, through the sensitivity analysis, we show the impact of these distortions and the effect of the customer order reservation on the inventory policy.

• Management Science and Financial Engineering
• /
• v.14 no.1
• /
• pp.35-63
• /
• 2008

We discuss the problem of selecting profitable customer orders arriving at a company providing two classes of services. For an arriving customer order for the first class, the company 1) makes a decision whether to accept or reject it (admission control), or 2) decides a price of the order to offer to an arriving customer (pricing control). The customer order undergoing processing in the system may be cancelled owing to unavoidable circumstances with the customer. The second class of service is provided as a sideline, which prevents the server from being idle when all the customer orders for the first class are completed and delivered. This yields the sideline profit. We discuss both admission control and pricing control problems in an identical framework as well as examine the structure of the optimal policies maximizing the total expected present discounted net profit gained over an infinite planning horizon.

• The Journal of Information Systems
• /
• v.30 no.2
• /
• pp.105-126
• /
• 2021

Purpose The purpose of this study is to implement a optimal machine learning model about the cancellation prediction performance in car sales business. It is to apply the data set of accumulated contract, cancellation, and sales information in sales support system(SFA) which is commonly used for sales, customers and inventory management by imported car dealers, to several machine learning models and predict performance of cancellation. Design/methodology/approach This study extracts 29,073 contracts, cancellations, and sales data from 2015 to 2020 accumulated in the sales support system(SFA) for imported car dealers and uses the analysis program Python Jupiter notebook in order to perform data pre-processing, verification, and modeling that is applying and learning to Machine learning model after then the final result was predicted using new data. Findings This study confirmed that cancellation prediction is possible by applying car purchase contract information to machine learning models. It proved the possibility of developing and utilizing a generalized predictive model by using data of imported car sales system with machine learning technology. It can reduce and prevent the sales failure as caring the potential lost customer intensively and it lead to increase sales revenue by predicting the cancellation possibility of individual customers.

• Industrial Engineering and Management Systems
• /
• v.12 no.3
• /
• pp.207-223
• /
• 2013

Revenue management (RM) has been widely used to model products characterized as perishable. Classical RM model assumed that price is the sole factor in the model. Thus price adjustment becomes a crucial and costly factor in business. In this paper, an optimal pricing model is developed based on minimization of soft customer cost, one kind of price adjustment cost and is solved by Lagrange multiplier method. It is formed by expected discounted revenue/bid price integrating quantity-based RM and pricing-based RM. Quantity-based RM consists of two capacity models, namely, booking limit and overbooking. Booking limit, built by assuming uncertain customer arrival, decides the optimal capacity allocation for two market segments. Overbooking determines the level of accepted order exceeding capacity to anticipate probability of cancellation. Furthermore, pricing-based RM models occupancy/demand rate influenced by internal and competitor price changes. In this paper, a mathematical model based on game theoretic approach is developed for two conditions of deterministic and stochastic demand. Based on the equilibrium point, the best strategy for both hotels can be determined.

• Journal of Intelligence and Information Systems
• /
• v.17 no.2
• /
• pp.61-75
• /
• 2011

A Geographic Information System(GIS) is a system that captures, stores, analyzes, manages and presents data with reference to geographic location data. In the later 1990s and earlier 2000s it was limitedly used in government sectors such as public utility management, urban planning, landscape architecture, and environmental contamination control. However, a growing number of open-source packages running on a range of operating systems enabled many private enterprises to explore the concept of viewing GIS-based sales and customer data over their own computer monitors. K telecommunication company has dominated the Korean telecommunication market by providing diverse services, such as high-speed internet, PSTN(Public Switched Telephone Network), VOLP (Voice Over Internet Protocol), and IPTV(Internet Protocol Television). Even though the telecommunication market in Korea is huge, the competition between major services providers is growing more fierce than ever before. Service providers struggled to acquire as many new customers as possible, attempted to cross sell more products to their regular customers, and made more efforts on retaining the best customers by offering unprecedented benefits. Most service providers including K telecommunication company tried to adopt the concept of customer relationship management(CRM), and analyze customer's demographic and transactional data statistically in order to understand their customer's behavior. However, managing customer information has still remained at the basic level, and the quality and the quantity of customer data were not enough not only to understand the customers but also to design a strategy for marketing and sales. For example, the currently used 3,074 legal regional divisions, which are originally defined by the government, were too broad to calculate sub-regional customer's service subscription and cancellation ratio. Additional external data such as house size, house price, and household demographics are also needed to measure sales potential. Furthermore, making tables and reports were time consuming and they were insufficient to make a clear judgment about the market situation. In 2009, this company needed a dramatic shift in the way marketing and sales activities, and finally developed a dedicated GIS_based market analysis and sales management system. This system made huge improvement in the efficiency with which the company was able to manage and organize all customer and sales related information, and access to those information easily and visually. After the GIS information system was developed, and applied to marketing and sales activities at the corporate level, the company was reported to increase sales and market share substantially. This was due to the fact that by analyzing past market and sales initiatives, creating sales potential, and targeting key markets, the system could make suggestions and enable the company to focus its resources on the demographics most likely to respond to the promotion. This paper reviews subjective and unclear marketing and sales activities that K telecommunication company operated, and introduces the whole process of developing the GIS information system. The process consists of the following 5 modules : (1) Customer profile cleansing and standardization, (2) Internal/External DB enrichment, (3) Segmentation of 3,074 legal regions into 46,590 sub_regions called blocks, (4) GIS data mart design, and (5) GIS system construction. The objective of this case study is to emphasize the need of GIS system and how it works in the private enterprises by reviewing the development process of the K company's market analysis and sales management system. We hope that this paper suggest valuable guideline to companies that consider introducing or constructing a GIS information system.