DATE: May 13, 2008
TIME: 12:00 pm - 1:00 pm
PLACE: Hoffman E-Commerce Lab, McClelland Hall 218
SPEAKER: Prof. Jian Chen, Tsinghua University
TITLE: "Optimal Control of Selling Channels for an Online Retailer with Cost-per-Click Payments and Seasonal Products"

ABSTRACT:
The problem studied in this talk is a predigestion of the decision faced by online retailers (etailers) that advertise on publisher or comparison-shopping websites. An etailer may sell its product not only through its web store, but also through the websites of one or more third parties (e.g., Yahoo.com). However, the etailer has to pay a certain amount to such third parties in an action-based payment scheme, such as a cost-per-click (CPC) scheme. Under the CPC scheme, payment is based on click-throughs, which means that the etailer pays only when a shopper clicks through to the product page of its website. Only a fraction of such clicks lead to actual sales. The extra cost that is associated with shoppers who first click through to the third-party websites makes them less attractive as customers than those who directly visit the etailer’s online store. Moreover, the CPC rate for a prominent placement is normally set by competitive bidding, and thus varies over time. Therefore, the etailer needs to decide dynamically whether or not to list on a third-party website. The structural properties of the optimal policy are discussed, and numerical examples are given to show the revenue impact of dynamic listing control.

SHORT BIO:
Dr. Jian Chen received the B.Sc. degree in Electrical Engineering from Tsinghua University, Beijing, China, in 1983, and the M.Sc. and the Ph.D. degree both in Systems Engineering from the same University in 1986 and 1989, respectively. He is Professor and Chairman of Management Science Department, Director of Research Center for Contemporary Management, Tsinghua University. His main research interests include supply chain management and E-commerce. Dr. Chen has published over 100 papers in refereed journals and has been a principal investigator for over 30 grants or research contracts with National Science Foundation of China, governmental organizations and companies. He has been invited to present several plenary lectures. He is the recipient of Ministry of Education Changjiang Scholars, Fudan Management Excellence Award (3rd), Science and Technology Progress Awards of Beijing Municipal Government; the Outstanding Contribution Award of IEEE Systems, Man and Cybernetics Society; Science and Technology Progress Award of the State Educational Commission; Science & Technology Award for Chinese Youth. He has also been elected to IEEE Fellow. He serves as Chairman of the Service Systems and Organizations Technical Committee of IEEE Systems, Man and Cybernetics Society, Vice President of Systems Engineering Society of China, Vice President of China Society for Optimization and Overall Planning, a member of the Standing Committee of China Information Industry Association. He is the editor of “the Journal of Systems Science and Systems Engineering”, an area editor of “Electronic Commerce Research and Applications”, an associate editor of “IEEE Transactions on Systems, Man and Cybernetics: Part A”, “IEEE Transactions on Systems, Man and Cybernetics: Part C”, and “Asia Pacific Journal of Operational Research” and serves on the Editorial Board of “International Journal of Electronic Business”, International Journal of Information Technology and Decision Making” and “Systems Research and Behavioral Science”.