Jae-Hyuck Park

I am primarily interested in sustainability, food supply chains, food waste, omnichannel retail operations with a specific interest in grocery retailing. My Ph.D. advisors were Dan Iancu and Erica Plambeck. 

Contact: jaehyuck.park_AT_njit.edu

Curriculum Viae: [Link]

Working Papers

On the Management of Premade Foods

with Dan Iancu and Erica Plambeck (major revision at Management Science)

• Accepted to the Sustainable Operations SIG Meeting of the 2022 M&SOM Conference

This paper examines a grocery retailer’s management of a premade food product. The retailer’s goal is to maximize a weighted sum of direct profit and customer welfare. Multiple items of the product are produced in batches and displayed for sale. Considering that each item’s quality decreases while it sits on the shelf, the retailer chooses how long to display items before disposal (i.e., the shelf life), whether to issue items in FIFO or LIFO order, and whether to indicate the time when each item is prepared (i.e., timestamp). With timestamps, customers decide whether to purchase based on each item’s age and associated quality; without timestamps, they decide based on the average quality of purchased items. Our first main finding is that LIFO universally outperforms FIFO when shelf life and issuance are jointly optimized. If the shelf life is fixed exogenously, either LIFO or FIFO can dominate, and we characterize the conditions for each case. Our second main finding is that the retailer should timestamp items only if customers have heterogeneous preferences, and a positive decision hinges on the disposal cost being sufficiently low or the retailer caring substantially about customer welfare. Lastly, we show how a mandate to donate unsold food items (as implemented in France and California) can incentivize a retailer to increase the shelf life or cease disclosing the time at which a food item was made, which harms shoppers and reduces the quantity and quality of donated items.

Work in Progress

Sustainable Palm Oil Processing in West Africa

with Casey Maue and Erica Plambeck (manuscript in preparation)

A distinguishing feature of West African palm oil supply chains is that modern export-oriented industrial palm oil processing mills tend to be surrounded by small-scale informal mills that use rudimentary technology to produce palm oil for local consumption. To understand this phenomenon, we develop a spatial model to evaluate the efficiency of various configurations of different types of processing mills. Returns to scale incent the social planner to develop large and efficient industrial mills. However, when the rate of fruit production is seasonal, high costs of transporting fruit to industrial mills creates a niche for small, low-cost, low-productivity firms to increase the aggregate efficiency of the sector by processing otherwise unused fruit. This result highlights the potential limitations of industrial palm oil development in the African context.

Joint Pricing and Inventory Decisions for Loss Leaders

with Dan Iancu (manuscript in preparation)

We study a grocery retailer’s replenishment and pricing strategies for a loss leader product. Our analysis shows that if the value of the loss leader product is sufficiently high, the retailer may want to price the loss leader product below its procurement cost to boost foot traffic and price other grocery items aggressively. We further discuss implications on food waste and consumer surplus.