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Dynamic Type Matching
- Source :
- Manufacturing & Service Operations Management. 24:125-142
- Publication Year :
- 2022
- Publisher :
- Institute for Operations Research and the Management Sciences (INFORMS), 2022.
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Abstract
- Problem definition: We consider an intermediary’s problem of dynamically matching demand and supply of heterogeneous types in a periodic-review fashion. Specifically, there are two disjoint sets of demand and supply types, and a reward for each possible matching of a demand type and a supply type. In each period, demand and supply of various types arrive in random quantities. The platform decides on the optimal matching policy to maximize the expected total discounted rewards, given that unmatched demand and supply may incur waiting or holding costs, and will be fully or partially carried over to the next period. Academic/practical relevance: The problem is crucial to many intermediaries who manage matchings centrally in a sharing economy. Methodology: We formulate the problem as a dynamic program. We explore the structural properties of the optimal policy and propose heuristic policies. Results: We provide sufficient conditions on matching rewards such that the optimal matching policy follows a priority hierarchy among possible matching pairs. We show that those conditions are satisfied by vertically and unidirectionally horizontally differentiated types, for which quality and distance determine priority, respectively. Managerial implications: The priority property simplifies the matching decision within a period, and the trade-off reduces to a choice between matching in the current period and that in the future. Then the optimal matching policy has a match-down-to structure when considering a specific pair of demand and supply types in the priority hierarchy.
- Subjects :
- Mathematical optimization
Matching (statistics)
021103 operations research
Computer science
Strategy and Management
05 social sciences
0211 other engineering and technologies
02 engineering and technology
Disjoint sets
Management Science and Operations Research
Type (model theory)
Vertical differentiation
Supply and demand
Horizontal differentiation
Sharing economy
Optimization and Control (math.OC)
0502 economics and business
FOS: Mathematics
050207 economics
Mathematics - Optimization and Control
Assignment problem
Subjects
Details
- ISSN :
- 15265498 and 15234614
- Volume :
- 24
- Database :
- OpenAIRE
- Journal :
- Manufacturing & Service Operations Management
- Accession number :
- edsair.doi.dedup.....c66ce994e00899910f8a32b4362aa121