2008 Headlines
Vishal Gaur Receives $67,000 grant from National Science Foundation
Grant to support research on risk management in supply chains
May 14, 2008 | Ithaca, NY | Controlling and minimizing risk is crucial to supply chains. The Johnson School at Cornell University today announced that Vishal Gaur, associate professor of operations management, received a $67,000 grant from the National Science Foundation to better understand how volatility of prices and demand affect supply chain risk and how to use market factors to design inventory and production systems.
The three-year grant reflects a partnership with Gaur and Sridhar Seshadri and Marti Subrahmanyam at New York University and Xiuli Chao at the University of Michigan, with separate funding being provided to each university. The team will develop forecasting mechanisms that combine past performance with data embedded in the prices of financial instruments; incorporate these forecasts in models to make supply chain decisions; use these expressions for profit to determine how to hedge demand risk; and test the validity of the approach by developing econometric models.
"We aim to establish that market indicators can be used to plan inventories in supply chains that are optimal not just in a static sense, but also dynamically," commented Gaur and his co-authors. "We will test whether and how the value of the firm is correlated with the economic indicators driving the forecasts. In addition, we will examine the effect of price information on inventories when the price of the product can be forecasted using prices of traded market instruments."
The results of the study will be useful to inventory planners and supply chain managers because it will provide a mechanism to use readily available and reliable information for inventory planning, profit forecasting and hedging purposes.
Gaur adds, "The broader impact will be an improvement in the methods used by firms to plan inventories. The firms will be better able to understand how volatility of prices and demand, as well as cost of procurement, affect risk, and to use market factors to design their inventory and production systems."
The project will also have an impact on education. It will result in a survey of existing and emerging research in a new area which can be used for teaching, discussions and collaborations with industry partners, and workshops.
The National Science Foundation is an independent U.S. government agency responsible for promoting science and engineering through research programs and education projects.
Gaur's research interests lie in retail operations and supply chain management, including topics such as inventory management, product variety, distribution logistics, financial performance of retailers, and linking operational performance to financial performance. One of his ongoing projects uses aggregate firm-level data for retailers to address questions related to benchmarking inventory turnover, measuring performance improvements, and forecasting future sales.
