讲座题目：OptimalAdvertising Budget Allocation in Luxury Fashion Markets with Social Influences:A Mean-Variance Analysis
主讲人：ProfessorTsan-Ming Choi (Jason)，TheHong Kong Polytechnic University
Optimizingadvertising budget allocation in the luxury fashion industry is an importantproblem. In this talk, motivated by real world practices, we consider a luxuryfashion firm serving a conspicuous market consisting of two groups of consumerswho influence one another. We investigate the optimal customer portfolios andbudget allocation problem using the mean-variance (MV) framework. Under the basicmodel in which all budget must be spent, we identify different scenarios andexplore the MV efficient frontier for each scenario. Interestingly, differentfrom the classic investment portfolio problem, we reveal that: (i) not allbudget allocations between the two groups of consumers are MV efficient, whichmeans that the efficient frontier is not continuous; (ii) in the presence ofsocial influence, diversification of customer portfolio does not always lead toa smaller variance, which counter-intuitively means that focusing on a singleconsumer group can reduce risk. We also prove that to maximize expected profit,the optimal strategy is to allocate all advertising budget to one group ofconsumers only (i.e. a polarized strategy). We illustrate analytically theimportance of identifying the right scenario for budget planning. Finally, weexamine the budget saving strategy in the extended model and uncover that therespective range of efficient solutions is smaller than the one under the allbudget spending strategy. This shows that the budget saving strategy offersless flexibility for MV efficient budget allocation.
Tsan-Ming Choi (Jason) is currently Professor of Fashion Business at The Hong KongPolytechnic University (PolyU). Over the past decade, he has activelyparticipated in a variety of research projects on supply chain management andapplied optimization for fashion business operations. He has authored/edited 16research handbooks, guest-edited over 30 special issues for manywell-established journals, and published over 160 papers in Web of Sciencelisted citation journals, including Production and Operations Management,Decision Sciences, Naval Research Logistics, Automatica, EJOR, IJPE, IJPR,Omega, TRE, etc and over 40 papers in various IEEE Transactions (TAC, TASE,TCYB, TEM, TII, TITS, TSMCS). He is now serving as the Co-Editor-in-Chief ofTransportation Research – Part E, a senior editor of Production and OperationsManagement, and Decision Support Systems, an associate editor of IEEETransactions on Systems, Man, and Cybernetics - Systems, and InformationSciences, a guest editor of Decision Sciences, IEEE Transactions on EngineeringManagement, and International Journal of Production Economics, and an editorialboard member of INFORMS Service Science, International Journal of ProductionResearch, and International Transactions in Operational Research, etc. He isthe founding editor of Springer's Book Series in Fashion Business. In the past,he was an executive committee member/officer of professional organizations suchas IEEE-SMC(HK) and POMS(HK). He received the PolyU’s President’s Award ofOutstanding Performance in 2008, the Best Associate Editor Award of IEEESystems, Man, and Cybernetics Society in two consecutive years (2013 and 2014),and the Distinguished Alumni Award of Faculty of Engineering, The ChineseUniversity of Hong Kong in 2017.