The Institute of Operations Research and the Management Sciences (INFORMS) recently awarded the prestigious INFORMS Impact Prize to Imperial College Business School Professor Kalyan Talluri along with Professor Guillermo Gallego (HKUST and Columbia University), Professor Garrett van Ryzin (Uber and Columbia University), Dr. Robert Phillips (Uber and Nomis Solutions), Dr. Peter Belobaba (MIT), Dr. Andy Boyd, Dr. Tom Cook and Dr. Barry Smith (industry) for their combined work in the field of Revenue Management.
This prize is awarded biannually to an individual or team for contributions which have had widespread impact in the practice of operations research.
INFORMS is the largest society in the world for professionals in the field of Operations Research, Management Science and Business Analytics and publishes top academic journals such as Management Science, Operations Research, Organization Science, Marketing Science, MSOM, Transportation Science, Math of OR etc.
Revenue Management and Dynamic Pricing is one of the most successful tactics to grow out of Operations Research. It combines theoretical elements from Economics, Marketing and Computer Science and uses Stochastic Optimization to make the tactics practical and widely applicable.
Professor Talluri said: “Revenue management practice is now widespread and deeply embedded across many industries and companies. Most airline companies, hotels, cruise-lines, rental-car and fashion-retail and perishable grocery businesses use it. In addition companies like Uber and Lyft use surge pricing (a form of dynamic pricing), and many online retailers use a technique called repricing.”
INFORMS previously awarded Professor Talluri the Lanchester Prize (2005), Pricing and RM Section prize (2004) and the Nicholson Student prize (1992, 2nd prize). His work in revenue management dates from the mid-1990s, when he was involved in implementing the strategy at an airline.
The formal award ceremony will be held at the INFORMS Annual Meeting in Nashville on Sunday, November 13.
It is a way of bringing efficiency to sales where firms try to change price dynamically to match demand to a rigid or semi-rigid supply constraint. With the rise of the internet channels, precise customization of price, assortment and offer is becoming increasingly critical for many companies.