Essays on flexible selling and container capcity planning

Abstract

Uncertainty is one of the fundamental issues in operations management and marketing. In this paper, we study valuation uncertainty and market uncertainty in the contexts of retailing and container capacity planning, respectively. In the first part of this thesis, we analyze an innovative selling strategy: flexible selling. While traditional strategy deals with valuation uncertainty using money-back guarantees (MBG), flexible selling strictly applies the “No refund, Exchange only” policy. Our analysis shows that, under certain circumstances, flexible selling benefits not only the seller’s profit, but also the social welfare. The second part of the thesis focuses on container capacity planning, which may well take years in advance of the actual delivery of the vessel. We study the optimal strategy that best mitigates the unknown market uncertainty. To better fit practical considerations, our model also takes slow steaming and economy of scale into consideration. The results obtained help sellers design optimal capacity planning schemes in a competitive environment.

Date of Award	2013
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology