Reza Ahmadi

Professor in Decisions, Operations, and Technology Management

Phone: (310) 825-2502

reza.ahmadi@anderson.ucla.edu

Biography

With a background in industrial engineering, Professor Ahmadi worked as a systems analyst before joining the UCLA Anderson School in 1988. He has published many articles in Operations Research, Management Science and many other leading journals in the field of operations management.

Education

Ph.D. Operations Management, 1988, University of Texas at Austin
M.S. Operations Research, 1984, University of Texas at Austin
B.S. Industrial Engineering, 1978, New Mexico State University

Interests

Operations Management, Product Design and Development, Supply Chain Management with Gray Markets
  • W. Zhang, S. Dasu, R. Ahamdi. (2016). High Prices for Larger Quantities? Non-Monotonic Price-Quantity Relations in B2B Markets. Management Science, Forthcoming. [ Link ]
  • F. Iravani, S. Dasu, R. Ahmadi. (2012). A Hierarchical Framework for Organizing a Software Development Process. Operations Research, [ Link ]
  • S. Dasu, R. Ahmadi, S.M. Carr. (2012). Gray Markets, A Product of Demand Uncertainty and Excess Inventory. Production and Operations Management, [ Link ]
  • T.A. Roemer, R. Ahmadi, S. Dasu. (August 2012). The Traveling Salesman Problem with Flexible Coloring. Discrete Applied Mathematics, 160(12): 1798-1814. [ Link ]
  • F. Iravani, H. Mamani & R. Ahmadi. (October 2011). Coping with Gray Markets: The Impact of Market Conditions and Product Characteristics. Production and Operations Management, [ Link ]
  • W. Zhang, R. Ahmadi, S. Dasu. (2016). Agree Now or Later? Strategic Vertical Bargaining with Limited Capactiy and Symmetric Information. Production and Operations Management, Forthcoming. [ Download ] [ Show Abstract ]
    In this paper we study dynamic strategic bargaining in business-to-business markets wherein a seller and a buyer possess symmetric information and negotiate over the price of a product for which the seller has a limited capacity. Motivated by the microprocessor market, our model offers an explanation for the occasional observations of delayed price agreement in this market, which cannot be explained by existing theories, and sheds light on how to make tactical decisions such as when to propose, reject, and accept counter-offers. In our model, the buyer can choose to wait if the seller rejects the counter-offer; as a countermeasure, the seller threatens to sell part of the limited capacity to other buyers who may possibly arrive later; the probability of the arrival of other buyers is updated while waiting. The subgame perfect equilibrium predicts that (1) it is credible for the buyer to wait when the gain from the trade is low and that (2) the seller should encourage the focal buyer to wait when selling to other buyers is more profitable. If prices are always settled without delay, the seller can lose more than 10 percent of its revenue according to our numerical study. We also investigate how to optimize the posted price given the anticipated equilibrium of bargaining and show that incorrect anticipations of the time of agreement lead to ineffective prices, which can be 8 percent lower than the optimal price.
  • R. Ahmadi, F. Iravani, H. Mamani. (2016). Gray markets, Contracts and Supply Chain Coordination. Production and Operations Management, Forthcoming. [ Download ] [ Show Abstract ]
    The practice of diverting genuine products to unauthorized gray markets continues to challenge many companies in various industries and creates an intense competition for authorized channels. Recent industry surveys report that the abuse of channel incentives is a primary reason for the growth of gray market activities. Therefore, it is crucial that companies take the potential presence of gray markets into consideration when they design contracts to distribute their products through authorized retailers. This issue has received little attention in the extensive literature on contracting and supply chain coordination. In this paper, we analyze the impacts of gray markets on two classic contracts, wholesale price and quantity discount, in a supply chain with one manufacturer and one retailer when the retailer has the opportunity to sell the product to a domestic gray market. Consumers are forward–looking and anticipate the diversion of the product to the gray market. Our analysis provides interesting and counterintuitive results. First, a classic quantity–discount contract that normally coordinates the supply chain can perform so poorly in the presence of a gray market that the supply chain would be better off using a wholesale price contract instead. Second, the presence of a gray market can also degrade the performance of the wholesale price contract; thereby, necessitating a more sophisticated contract for coordinating the supply chain in the presence of the gray market. We show that any contract that solely depends on retailer order quantity cannot coordinate the supply chain and provide the conditions for coordinating the supply chain with price–dependent quantity discount contracts. We also provide comparative statics and show that when there is a gray market, coordinating the supply chain also enhances total consumer welfare.
  • F. Iravani, S. Dasu, R. Ahmadi. (April 2013). Beyond Price Mechanisms: How Much Can Service Help Manage the Competition from Gray Markets?. [ Download ] [ Show Abstract ]
    Companies operating global supply chains in various industries struggle to thwart parallel importers diverting brand goods from authorized channels and selling them in gray markets. Given that price differentials are the primary drivers of gray markets, research studying gray market impact mainly focuses on pricing. This paper develops a Stackelberg game model to examine the role of demand enhancing services as a non-price mechanism for coping with gray markets. We consider a manufacturer that sells a product in two markets and a parallel importer that transfers the product from the low-price market to the high-price market and competes with the manufacturer on price and service. We show that parallel importation forces the manufacturer to reduce the price gap and provide more service in both markets. We observe that a little service can go a long way in boosting the profit of the manufacturer and that service helps the manufacturer to differentiate herself from the parallel importer when consumers become indifferent between the two sellers. We also show that the manufacturer may increase profits by tolerating more gray market activity but charging gray market customers for service. Finally, we explore the impact of decentralizing the supply chain and delegating the service decision to a retailer on the amount of service, the volume of gray goods and supply chain profit.