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ISOM Seminar: Chloe Kim Glaeser, Univ. of Penn., OPMGT
WhenFriday, Jan 26, 2018, 10:30 a.m. – 12 p.m.
Campus locationPACCAR Hall (PCAR)
Campus roomPaccar 293
Event typesLectures/Seminars
Event sponsorsISOM Department
(206) 543-1043

Paccar Hall, Room 293

Seminar Speaker:
 Chloe Kim Glaeser
Affiliation: University of Pennsylvania
Area: Operations Management

Name of Presentation:
Optimal Retail Location:  Empirical Methodology and Application to Practice

We empirically study the spatio-temporal location problem motivated by an online retailer that uses the Buy-Online-Pick-Up-In-Store fulfillment method. Customers pick up their orders from trucks parked at specific locations on specific days, and the retailer's problem is to determine where and when these pick-ups occur.  Customer demand is influenced by the convenience of pick-up locations and days. We combine demographic and economic data, business location data, and the retailer's historical sales and operations data to predict demand at potential locations. We introduce a novel procedure that combines machine learning and econometric techniques. First, we use a fixed effects regression to estimate spatial and temporal cannibalization effects. Then, we use a random forests algorithm to predict demand when a particular location operates in isolation. Based on the predicted demand, we solve the spatio-temporal integer program using quadratic program relaxation to find the optimal pick-up location configuration and schedule. We estimate a revenue increase of at least 42% from the improved location configuration and schedule.…
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