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IEOR Seminar Series: Garrett van Ryzin, Amazon

IEOR seminars occur on Mondays throughout the fall semester in room 3108 of Etcheverry Hall. Seminars feature leading-edge research from experts in industrial engineering and operations research who come from local, national, and international institutions. Seminars are open to students, faculty, and the public.

Talk Title: Market-based capacity management for FBA

Abstract: Fulfillment by Amazon (FBA) is Amazon’s 3rd party marketplace for e-commerce sellers. In the past decade, FBA has grown rapidly – growth that has only accelerated during the pandemic. By most measures, FBA is now larger than Amazon’s own retail business. This has created a significant challenge for capacity management, since 3rd party sellers have considerable autonomy over how much inventory they send to Amazon. In this talk, we provide an overview of the FBA capacity management problem and describe an innovative market-based mechanism (auction) for capacity recently launched in North America. The auction uses a novel combination of securities and ex-post inspection. It admits a simple bidding strategy, implicitly scores sellers on a combination of sales and profit, and extracts minimal (often zero) revenue from sellers.

Bio: Garrett van Ryzin is a Distinguished Scientist at Amazon in the Supply Chain Optimization Technologies (SCOT) group. Before joining Amazon, he was a Distinguished Scientist and Head of Marketplace Lab at Lyft, working on pricing and market design. Prior to Lyft, Garrett was Head of Marketplace Optimization Advanced Development at Uber. Garrett was also a Professor of Decision Risk and Operations at Columbia University and subsequently Professor of Operations, Technology and Information Management at Cornell Tech. Garrett received a bachelor’s degree in Electrical Engineering from Columbia University, and holds a master’s degree in Electrical Engineering and Computer Science and Ph.D. in Operations Research from MIT.