Ever wonder how Amazon and Netflix seem to know exactly what you are looking for? The most recent episode of the CSCR Supply Chain Podcast focused on choice modeling and how it captures consumer decisions and demand. Featured guest Aydin Alptekinoglu, Professor of Supply Chain Management and Director of Research for CSCR, shared his insights on individual consumer choices, demand, and how it relates to supply chain. Learn more about our guest below!
How did you first get involved with the Center for Supply Chain Research®?
My major involvement has started with taking on the CSCR Research Director role in 2016. Connecting industry with academia is a challenging and very stimulating job. I have enjoyed the ride and am getting ready to pass the baton before my sabbatical in the next academic year.
What are your various research interests?
Broadly speaking, my research interests are in three particular dimensions of product strategy: Variety, Price, and Availability. That is, what products to offer, at what price, and when and how to deliver them or make them available? The major emphasis of my research program has been on the first dimension: product variety management, which I view as including retail assortment planning, mass customization, product competition, new product introduction, and “old” product deletion (aka stock keeping unit rationalization). As a natural outgrowth of my research on product variety management, lately I have been delving into the analytics of choice and returns, the latter often being a consequence of choice mismatches that emanate from lack of variety.
What is a common myth about your field of expertise?
A common myth about supply chain management (SCM) is that it is only about supply. SCM is about matching supply and demand, which immediately implies that understanding demand – especially the demand that occurs at the very end of a supply chain (think of fashion goods eventually attracting interest and generating sales to consumers of fashion) – is equally important for successful SCM.
What is something about your industry that has surprised you lately?
They say one-in-six people on the planet are employed in the global fashion industry. (Producing apparel is very labor-intensive.) This was shocking to me!
What is choice modeling and why is it important?
In a nutshell, choice modeling is about generating mathematical or empirical constructs to represent the choices that people or organizations make. It is important to numerous fields. For SCM, its importance comes from the fact that it enables researchers understand demand better. Ultimately, the demand for a product is a collection of choices made by many, many consumers. Understanding their individual choices better (for example, how does product variety or price effect their individual choice) means understanding the demand better, which in turn gives us the ability to plan for an appropriate (read, optimal) supply chain response.
Missed the podcast and want to learn more? Listen to the full episode here.