Sustainable Fashion Supply Chains Using Game Theory

We have conducted a lot of research on sustainable supply chains with applications ranging from products in health care to electric power generation and distribution networks.

An industry, which just recently has started to receive attention because of its impact on the environment, is the fashion and apparel industry.

However, not much research has been conducted as to capturing the scope of the issues and the realities of this industry which includes different brands as well as competition, and even the speed of this industry, as in fast fashion.

A doctoral student of mine, Min Yu, has been working with me in this area for about two years now as part of our research on time-sensitive supply chains, in particular, and sustainability overall.

We will be presenting our latest study, "Sustainable Fashion Supply Chain Management Under Oligopolistic Competition and Brand Differentiation," at the INFORMS Annual Conference next week in Charlotte, North Carolina. This paper is in press in the International Journal of Production Economics, Special Issue on Green Manufacturing and Distribution in the Fashion and Apparel Industries.

In the paper, we developed a new model of oligopolistic competition for fashion supply chains in the case of differentiated products with the inclusion of environmental concerns. The model assumes that each fashion firm's product is distinct by brand and the firms compete until an equilibrium is achieved. Each fashion firm seeks to maximize its profits as well as to minimize its emissions throughout its supply chain with the latter criterion being weighted in an individual manner by each firm, since some firms may care more or less about their impact on the environment.

The competitive supply chain model is network-based and we use both game theory and variational inequality theory for the formulation of the governing Nash equilibrium as well as for the solution of the case study examples. The numerical examples illustrate both the generality of the modeling framework as well as how the model and computational scheme can be used in practice to explore the effects of changes in the demand functions; in the total cost and total emission functions, as well as in the weights.

Our full presentation can be downloaded, in pdf format here.

Was the Operations Research Crew Scheduling Program Just Too Interesting?

According to CNN.com as well as the New York Times, the reason that the Northwest pilot and first officer were unreachable for about 90 minutes on last week's flight from San Diego to Minneapolis (and overshot their destination by about 150 miles before turning around) was that they were engrossed in the crew scheduling software on their laptops.

Since Delta merged with Northwest, there have been obvious issues regarding the retraining of personnel (I have had long discussions with stewardesses on flights during which I was told how different the philosophies were of these two airlines pre-merger as well as the number of stewardesses that would assist on a flight).

According to news reports, the first officer was assisting the pilot with the crew scheduling software and clearly the subject was of sufficient fascination for both that they did not realize that they were to be piloting an airplane! Those of us who work in operations research are well aware of the underlying mathematical models and, coincidentally, today I was teaching integer programming models in my graduate class at the Isenberg School.

Of course, these two have now lost their pilot licenses. I remember a colleague of mine, Dr. Richard Stone, who is a Lanchester Prize winner and early in his career taught at the Kennedy School at Harvard and then left to join the Operations Research group at Northwest Airlines. You can read about some of his relevant activities here.

It is rather ironic that O.R. (operations research) which focuses on optimization of business processes, including crew scheduling, may have had a role to play in this major human error and only because the software was clearly so interesting that it was an obvious distraction to the flight crew. Why were there no "bells and whistles" in the automatic pilot software when the plane overshot its destination, I wonder?!

As for the merger of Delta and Northwest, locally, we lost our direct flight from Bradley airport (Hartford/Springfield) to Amsterdam, which was a terrific asset while we had it for about a year and a half.

I have done research on mergers and acquisitions in oligopolies, which airlines are, and you can find my latest paper on the subject, which is in press in the journal Computational Management Science here.