In Case You Missed It

INFORMS Journal Highlights from February 2018

AUTHOR SPOTLIGHT

YVES CRAMA

Professor
HEC Management School, University of Liège

INFORMS member since 1986

Co-author with Mahmood Rezaei, Martin Savelsbergh, and Tom Van Woensel of "Stochastic Inventory Routing for Perishable Products," in Transportation Science

INFORMS: What inspired you to research this particular topic?

CRAMA: The topic is at the intersection of well-researched areas of supply chain management and operations research, namely, inventory routing and inventory control for perishable fresh products. Our contacts with the industry and numerous exchanges among the coauthors of this study convinced us that the topic was at once tremendously important and barely investigated in the scientific literature. We also found it quite challenging as it brings together techniques and concepts from diverse subfields, such as combinatorial optimization heuristics, inventory control, and Markov decision processes.

INFORMS: Did any of your results surprise you?

CRAMA: Our computational tests showed that most of the methods we propose to optimize the expected profit simultaneously tend to maximize the freshness of the products on shelf (i.e., their remaining shelf life) and maintain high service levels (i.e., the satisfaction of consumer demand). This was not totally unexpected, in view of the fact that the profit maximization objective somehow captures the other two performance measures; it was nevertheless a welcome observation, as freshness and service level are obviously two key performance indicators, from the consumer’s point of view.

INFORMS: What is the most important takeaway you hope readers will learn from your paper?

CRAMA: The paper carries three main messages. First, in our computational experiments, integrating routing and inventory decisions results in significant savings. Second, taking into account the uncertainty of future demand yields additional rewards. These first two conclusions are somehow predictable and in line with previous findings on related problems. It turns out, however, that the specific case of perishable products raises new, difficult technical challenges. A third conclusion, therefore, is that modeling these specific features is worth the effort, and that even (relatively) simple policies perform quite well, at least under certain conditions.

INFORMS: How do your results impact services like Amazon Fresh, i.e., grocery delivery?

CRAMA: Grocery delivery is, indeed, the explicit example that we had in mind when working on this study, although our study concentrates on the distribution of fresh products from central warehouses to local stores and supermarkets, rather than to individual households. The retail sales of fresh products in the United States amount to hundreds of billions of dollars, but the net profit in this sector only represents a small percent of revenue. So, even a small reduction in logistical costs may translate into large absolute savings, and in significant benefits when expressed as a percentage of net profit. Our models focus on the joint reduction of routing and inventory costs. The results demonstrate the potential of analytical methods to optimize the distribution of fresh products by large retail chains.

INFORMS: Tell us about the process of writing this paper.

CRAMA: This was a long journey, with many iterations aimed at correctly understanding the stakes, improving the models, developing new algorithms, and testing the results on appropriate benchmark instances. The paper was part of Mahmood Rezaei’s doctoral dissertation, which he defended in 2016 at the University of Liège. Over the span of a few years, Mahmood spent time in Belgium, the Netherlands, and Australia to coordinate the development of the study with all coauthors.

INFORMS: Why was it important for you to publish in Transportation Science?

CRAMA: Transportation Science is definitely one of the top outlets for scientific work combining supply chain management issues and operations research methodology. It provides an ideal vitrine for our work. Moreover, the quality of the review process and the questions raised by the referees certainly helped improve the paper.

INFORMS: Tell us a little about what you are working on now.

CRAMA: I am working with several coauthors on a variety of research questions, ranging from methodological developments in nonlinear integer programming to application-driven problems arising in supply chain management or in economics. As a sequel to a paper that we published inOperations Research (2016), I just finished a survey (coauthored with Bart Smeulders and Frits Spieksma) on the algorithmic aspects of revealed preference theory. I also recently became interested in optimization models of kidney exchanges, and we are testing some new, promising ideas in this direction.

INFORMS: How do you keep yourself up-to-date on the latest research in your field?

CRAMA: Well, nothing extremely original here. I read, of course, but I am also a true believer in the importance of networks and personal contacts. So, I attend conferences, I participate in joint research projects, I try to talk as much as possible to colleagues about the problems they are working on, and to practitioners about the difficulties they are facing. And last but not least, my doctoral students teach me a lot!

INFORMS: How has being a member of the INFORMS Optimization Society and MSOM Society impacted your professional life?

CRAMA: I have been a member of INFORMS since the beginning of my scientific career (at a time when INFORMS was still called TIMS/ORSA). This membership creates an important link with my research network in the States, and constitutes a way to keep up-to-date with innovative results and emerging trends. I try to attend the Annual Meeting on a regular basis, although the distance and a poor match with the Belgian teaching schedule frequently prevent me from doing so.

INFORMS: What about your career might surprise us?

CRAMA: I initially started my doctoral studies in Belgium with financial support in the form of a teaching assistantship. However, my financial support was cut after one year due to budget restrictions. This unexpected event prompted me to apply for a research fellowship that required a mandatory one-year stay in a foreign university. To fulfill this requirement, I moved to Rutgers University, liked it, and eventually stayed there for four years until I completed my PhD in operations research under the guidance of the late Peter L. Hammer. In retrospect, losing my TA job was perhaps the best thing that ever happened to me in my whole scientific career!

INFORMS: Tell us about your experience with IFORS and as the Keynote Distinguished Lecturer at the INFORMS 2011 Annual Meeting in Charlotte, NC.

CRAMA: Of course, I was extremely happy to be chosen as the IFORS Keynote Distinguished Lecturer. I felt even more honored when I found out about the complete list of lecturers who preceded and followed me on this exercise. The lecture provided a fantastic and timely forum to explain the role of Boolean models in operations research, as our monograph Boolean Functions (coauthored with Peter L. Hammer) had just been published earlier in the same year.

INFORMS: What is your least favorite mode of transportation? Can you apply a routing problem to make it better?

CRAMA: I don’t really like to drive my car: roads in Europe, as in many places, are too dangerous, too congested, and too polluted. New routing algorithms, by themselves, may not provide the most effective way to radically improve this situation, but new technologies, new traffic management models, and new behaviors adopted by “consumers” of transportation may offer intriguing ways of improving the situation over the next few years. Operations research certainly has a role to play here as well.

INFORMS: When you’re not using your OR/MS superpowers to try to make the world a better place, what are some of the ways you like to spend your time?

CRAMA: Nothing spectacular: I enjoy spending time with my family, hiking or playing tennis, going to the movies, having a good dinner with a group of friends.

INFORMS: What is the best advice you can give to students in your field?

CRAMA: First, an advice I would give to any young (or not so young) person, independently of his or her scientific interests: see the world, meet people, discover their diversity and richness. Next, for students engaging in the field of OR/MS: keep your mind open to new problems and emerging trends. What is so nice about OR/MS is that we get to interact with many different breeds of scientists and practitioners, from mathematicians to managers, to medical doctors, or to telecommunication engineers. Listen to them and learn.

INFORMS: If we were sitting here a year from now celebrating what a great year it's been for you, what would we be celebrating?

CRAMA: There’s a famous saying that prediction is very difficult, especially if it's about the future. So, let me rather tell you that right now, looking back at last year’s events, I’m especially happy to have become the proud grandfather of a little baby girl. And of course, to have published our paper in Transportation Science

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