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Goker Aydin - Indiana University, Kelley School of Business. Bloomington, IN, US

Goker Aydin Goker Aydin

Associate Professor | Indiana University, Kelley School of Business

Bloomington, IN, UNITED STATES

Expert in operations management & business analytics

Secondary Titles (1)

  • ArcelorMittal Faculty Fellow of Supply Chain



Goker Aydin's research is driven by the demand and supply uncertainty facing both retailers and their suppliers. To manage such uncertainty, firms can use inventory as a buffer, or they can leverage their prices to match supply with demand. Goker’s research uses mathematical models to gain insights into such inventory and pricing decisions. He currently teaches a course on data analytics, and has taught supply chain management and revenue management courses in the past. Goker received his Ph.D. in Industrial Engineering from Stanford University, M.S. in Industrial Engineering from Purdue University, and B.S. in Industrial Engineering from Bogazici University in Turkey.

Industry Expertise (6)

Management Consulting Research Education/Learning Writing and Editing Program Development Oil and Gas

Areas of Expertise (5)

Supply Chain Management Revenue Management Retail Operations Interactions among Pricing Product Variety and Operations Decisions

Accomplishments (4)

Teaching Excellence Award (professional)


Awarded by Kelley School of Business

Teaching Excellence Award (professional)


Award by Kelley School of Business

Management Science Distinguished Service Award (professional)


Alpha Pi Mu Outstanding Professor of the Year (professional)


Awarded by the student honor society Alpha Pi Mu, Department of Industrial and Operations Engineering, University of Michigan – Ann Arbor

Education (3)

Stanford University: Ph.D., Industrial Engineering 2003

Purdue University: M.S., Industrial Engineering 1999

Bogazici University: B.S., Industrial Engineering 1997

Articles (5)

Bargaining for an Assortment Management Science


A retailer’s assortment decision results from a process of give-and-take, during which the retailer may bid manufacturers against one another, and the terms of trade offer plenty of flexibility for allocating the profit among the retailer and manufacturers. We adopt a bargaining framework to capture such an assortment selection process. We investigate the properties of the profit allocations that could emerge in a decentralized supply chain. In our model, the retailer engages in simultaneous, bilateral negotiations with all manufacturers. Our model and analysis produce managerial insights that could not be obtained in the absence of a bargaining perspective on assortment planning. For example, we find that when a manufacturer improves its product, such improvements do not only benefit the retailer, but they might even benefit competing manufacturers. In fact, even improvements to out-of-assortment products can increase the profits of the retailer and certain in-assortment manufacturers. Hence, our results suggest that a manufacturer can benefit from collaborating with judiciously chosen competitors.

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Sponsored Search Marketing: Dynamic Pricing and Advertising for an Online Retailer Management Science


Consider a retailer using sponsored search marketing together with dynamic pricing. The retailer’s bid on a search keyword affects the retailer’s rank among the search results. The higher the rank, the higher the customer traffic and the customers’ willingness-to-pay will be. Thus, the question arises: When a retailer bids higher to attract more customers, should the accompanying price also decrease (to strengthen the bid’s effect on demand) or increase (to take advantage of higher willingness-to-pay)? We find that the answer depends on how fast the retailer increases its bid. In particular, as the end of the season approaches, the optimal bid exhibits smooth increases followed by big jumps. The optimal price increases only when the optimal bid increases sharply, including the instances where the bid jumps up. Such big jumps arise, for example, when the customer traffic is an S-shaped function of the retailer’s bid.

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Dismantle or Remanufacture? Operational Research


In this paper we study a firm's disposition decision for returned end-of-use products, which can either be remanufactured and sold, or dismantled into parts that can be reused. We formulate this problem as a multi-period stochastic dynamic program, and find the structure of the optimal policy, which consists of monotonic switching curves. Specifically, if it is optimal to remanufacture in a given period and for given inventory levels, then it is also optimal to remanufacture when the inventory of part(s) is higher or the inventory of remanufactured product is lower.

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Optimal Assortment and Inventory Decisions with Multiple Quality Levels Annals of Operations Research


We consider the assortment and inventory decisions of a retailer under a locational consumer choice model where products can be differentiated both horizontally (e.g., color of a product) and vertically (e.g., quality of a product). The assortment and quantity decisions affect customer choice and, hence, the demand and sales for each product. In this paper, we investigate two different environments where product availability and assortment affect consumer choice and demand in different ways: make-to-order (MTO) and make-to-stock (MTS). In the MTO environment, customers order and purchase their most preferred product; that is, stockouts do not occur. In the MTS model, customers buy their most preferred product if it is in stock or do not buy if it is out of stock. In both environments we find conditions under which it is optimal to carry assortments of only a single quality level. In the MTS case, we show that an assortment of mixed quality levels can be optimal only within a narrow range of parameters.

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Pricing Policy in a Supply Chain: Negotiation or Posted Pricing Production and Operations Management


This paper examines the choice of pricing policy (posted pricing or negotiation) toward end customers in a supply chain. Many retailers actively decide whether or not to encourage negotiation on the shop floor. Of course, the retailer's pricing policy influences not only the retailer's profit, but also the profits of the manufacturers who sell through the retailer. However, little is known on the forces that shape the pricing policy when two self-interested parties interact in a supply chain. We consider two alternative models depending on who has the power to decide the pricing policy: the manufacturer or the retailer. We find that an increase in the wholesale price weakens the retailer's ability to price discriminate through negotiation. Therefore, the retailer prefers negotiation at lower wholesale prices, and posted pricing at higher wholesale prices. We also find that whenever the retailer prefers negotiation, the manufacturer does too. Therefore, the retailer's discretion over the pricing policy causes friction only when the retailer wants to use posted pricing, while the manufacturer wishes the retailer to use negotiation. We show that such friction arises only when product availability or the cost of negotiation is moderate. In this case, we show that the manufacturer may offer a substantial discount to persuade the retailer to negotiate. Surprisingly, in this region of friction, a decrease in the supply chain's capacity or an increase in negotiation costs (both of which are typically considered as worsening the retailer's business environment) translates into higher profit for the retailer.

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