DAO-ISEM-IORA Seminar Series: René Caldentey

René Caldentey

We study how information sharing and replenishment policies shape performance in a two-tier supply chain. Retailer orders serve as material requests and informational signals, so ordering decisions affect inventory flows and the information available upstream. We study these mechanisms across supplier fulfillment modes, from guaranteed delivery to settings in which supplier forecasts and inventory availability endogenously affect retailer

Replenishment.

We derive an inventory decomposition that transforms the retailer’s infinite-dimensional ordering problem into variance-minimization or finite-dimensional covariance-design problems. Optimal ordering depends sharply on the fulfillment environment. Without supplier inventory shortfalls, the retailer filters predictable demand variation from its order stream; for finite-memory demand, this can generate iid orders even when demand is serially correlated. With inventory-based fulfillment, optimal policies are sparse and lead-time-periodic, front-loading the response to new demand information and later reversing part of that response, which can generate bullwhip. For a fixed ordering policy, demand sharing can help or hurt the retailer, while supplier-side gains require noninvertible orders. Once the retailer optimizes its ordering policy, full information sharing is weakly optimal whenever supplier information affects material flows and becomes immaterial when optimal orders are invertible. Numerical experiments, including Amazon’s Chronos-2 forecasts and retail-sales data, support these findings.

René Caldentey is a Professor of Operations Management at the the University of Chicago Booth School of Business. His primary research interests include stochastic modeling with applications to revenue and retail management, queueing theory, inventory management, and finance. He has been published in numerous journals including Advances in Applied Probability, Econometrica, Management Science, Mathematics of Operations Research, M&SOM, Operations Research and Queueing Systems. He serves on the editorial board of Management Science, M&SOM, Naval Research Logistics, Operations Research and  Production and Operations Management.

Prior to joining Booth, Caldentey was a professor in the department of Information, Operations and Management Science at New York University Stern School of Business. Before joining NYU Stern in 2001, he worked for the Chilean Central Bank and taught at the University of Chile and The Sloan School of Management at Massachusetts Institute of Technology (MIT).

Professor Caldentey received his Master of Arts in civil industrial engineering from the University of Chile and his Doctor of Philosophy in operations management from MIT.