Suresh P. Sethi
Encyclopedia
Suresh P. Sethi is Charles & Nancy Davidson Distinguished Professor of Operations Management
and Director of the Center for Intelligent Supply Networks (C4ISN) at The University of Texas at Dallas. He has contributed significantly in the fields of manufacturing
and operations management
, finance
and economics
, marketing
, industrial engineering
, operations research
, and optimal control
. He is well known for his developments of the Sethi advertising model and DNSS Points, and for his text book on optimal control
. He has received several prestigious honors and awards for his contributions. Two conferences have been organized in his honor: in Aix en Provence in 2005 and at UT Dallas in 2006 with Harry M. Markowitz, a 1990 Nobel Laureate in Economics, as the keynote speaker. Also, two books have been edited in his honor.
His editorial positions include Departmental Editor of Production and Operations Management
, Corresponding Editor of SIAM Journal on Control and Optimization, and Associate Editor of Automatica. A complete list of his research papers and books is available at http://www.utdallas.edu/~sethi/
from Carnegie Mellon University
and was Post-doctoral Fellow at Stanford University
under the supervision of George B. Dantzig. He has B. Tech. with Honors in Mechanical Engineering
from Indian Institute of Technology Bombay
, M.S. in Industrial Administration from Carnegie Mellon University
, and MBA from Washington State University
.
and Director of the Center for Intelligent Supply Networks (C4ISN) at The University of Texas at Dallas. He has also taught at Rice University
, University of Toronto
, and Carnegie Mellon University
. At University of Toronto
he was General Motors Research Professor (1988–92) and Connaught Senior Research Fellow (1984–85). He has held a number of distinguished visiting assignments:
was developed by Suresh P. Sethi in 1981, and it describes the process of how sales evolve over time in response to advertising. The rate of change in sales depend on three effects: response to advertising that acts positively on the unsold portion of the market, the loss due to forgetting or possibly due to competitive factors that act negatively on the sold portion of the market, and a random effect that can go either way. The model and some extensions have been empirically tested and are widely used in the marketing
literature.
problems that exhibit multiple optimal solutions. A DNSS point
is an indifference point in an optimal control
problem such that starting from such a point, the problem has more than one different optimal solutions. Suresh P. Sethi identified such indifference points for the first time in 1977.
, Operations Research
, System and Control Theory
, Industrial Engineering
, Probability
and Statistic
, and Applied Mathematics
. The research is detailed in two books.
nearly hundred years ago, Sethi and co-authors have extended the filtering theory in the electrical engineering
literature to treat inventory models with incomplete information. It is shown that ignoring this realistic feature comes at a significant cost. Also, the existence of optimal feedback
ordering policies is proved and these policies are partially characterized.
Sethi and co-authors have studied the optimality of base stock and
type policies in case of forecast updates and multiple delivery modes. They introduce a general forecast updating scheme, termed peeling layers of an onion, and show the optimality of forecast-dependent base stock and 
policies with two delivery modes. They show further that the base stock policy is no longer optimal for other than the first two consecutive modes. These results are collected in a 2005 book by Sethi, Yan, and Zhang titled Inventory and Supply Chain Management with Forecast Updates.
are expected profit maximizers. However, it is well known in the finance literature that individuals are usually risk averse. Gan and Sethi generalized the existing supply contracts to allow for the agents to be risk averse. They developed a definition of coordination in this case, based on the Nash Bargaining Solution, and obtain coordinating contracts in a variety of supply chains with agents observing different risk-averse objectives.
of parts and re-sequencing of robot moves.
and Robert Merton
in 1969 and 1971; however none of their formulations took into account the possibility that an agent might go bankrupt in the process. In a set of articles published during the period from 1979 to 1996, Suresh Sethi and various co-authors explicitly introduced a bankruptcy value/penalty in the consumption/investment model. In addition, they also introduced a nonzero subsistence consumption level, which makes the consideration of bankruptcy even more important. This provided the ability to deal mathematically with the problems of bankruptcy in the study of consumption and investment. This research provides a useful frame for deepening our understanding of the consumption and portfolio selection behavior of individuals and households, and it is collected in a book titled Optimal Consumption and Investment with Bankruptcy.
in the time series analysis, and also applied it to study the determinants of the sales in the Toronto supermarkets. Prior to this, causality studies were used to detect whether a variable such as advertising causes sales over time or whether advertising expenditures are in practice determined as some percentage of sales. The authors extended the concept of causality when more than two variables are involved.
et al. study a model of economic growth with population growing in an arbitrary manner. This requires population as well as capital as state variables. In a later paper, they consider population dynamics to be endogenously determined and derive the expression of genuine savings and evaluate the sustainability of the economic system.
Operations management
Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and...
and Director of the Center for Intelligent Supply Networks (C4ISN) at The University of Texas at Dallas. He has contributed significantly in the fields of manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
and operations management
Operations management
Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and...
, finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
and economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, industrial engineering
Industrial engineering
Industrial engineering is a branch of engineering dealing with the optimization of complex processes or systems. It is concerned with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials, analysis...
, operations research
Operations research
Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...
, and optimal control
Optimal control
Optimal control theory, an extension of the calculus of variations, is a mathematical optimization method for deriving control policies. The method is largely due to the work of Lev Pontryagin and his collaborators in the Soviet Union and Richard Bellman in the United States.-General method:Optimal...
. He is well known for his developments of the Sethi advertising model and DNSS Points, and for his text book on optimal control
Optimal control
Optimal control theory, an extension of the calculus of variations, is a mathematical optimization method for deriving control policies. The method is largely due to the work of Lev Pontryagin and his collaborators in the Soviet Union and Richard Bellman in the United States.-General method:Optimal...
. He has received several prestigious honors and awards for his contributions. Two conferences have been organized in his honor: in Aix en Provence in 2005 and at UT Dallas in 2006 with Harry M. Markowitz, a 1990 Nobel Laureate in Economics, as the keynote speaker. Also, two books have been edited in his honor.
His editorial positions include Departmental Editor of Production and Operations Management
Production and Operations Management
Production and Operations Management is a peer-reviewed academic journal covering research on all topics in product and process design, operations, and supply chain management....
, Corresponding Editor of SIAM Journal on Control and Optimization, and Associate Editor of Automatica. A complete list of his research papers and books is available at http://www.utdallas.edu/~sethi/
Education
Suresh Sethi received his Ph.D. in Operations ResearchOperations research
Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...
from Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....
and was Post-doctoral Fellow at Stanford University
Stanford University
The Leland Stanford Junior University, commonly referred to as Stanford University or Stanford, is a private research university on an campus located near Palo Alto, California. It is situated in the northwestern Santa Clara Valley on the San Francisco Peninsula, approximately northwest of San...
under the supervision of George B. Dantzig. He has B. Tech. with Honors in Mechanical Engineering
Mechanical engineering
Mechanical engineering is a discipline of engineering that applies the principles of physics and materials science for analysis, design, manufacturing, and maintenance of mechanical systems. It is the branch of engineering that involves the production and usage of heat and mechanical power for the...
from Indian Institute of Technology Bombay
Indian Institute of Technology Bombay
The Indian Institute of Technology Bombay , popularly known as IIT Bombay or IITB, is a public research university located in Powai, Mumbai...
, M.S. in Industrial Administration from Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....
, and MBA from Washington State University
Washington State University
Washington State University is a public research university based in Pullman, Washington, in the Palouse region of the Pacific Northwest. Founded in 1890, WSU is the state's original and largest land-grant university...
.
Academic career
Suresh P. Sethi is Charles & Nancy Davidson Distinguished Professor of Operations ManagementOperations management
Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and...
and Director of the Center for Intelligent Supply Networks (C4ISN) at The University of Texas at Dallas. He has also taught at Rice University
Rice University
William Marsh Rice University, commonly referred to as Rice University or Rice, is a private research university located on a heavily wooded campus in Houston, Texas, United States...
, University of Toronto
University of Toronto
The University of Toronto is a public research university in Toronto, Ontario, Canada, situated on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution of higher learning in Upper Canada...
, and Carnegie Mellon University
Carnegie Mellon University
Carnegie Mellon University is a private research university in Pittsburgh, Pennsylvania, United States....
. At University of Toronto
University of Toronto
The University of Toronto is a public research university in Toronto, Ontario, Canada, situated on the grounds that surround Queen's Park. It was founded by royal charter in 1827 as King's College, the first institution of higher learning in Upper Canada...
he was General Motors Research Professor (1988–92) and Connaught Senior Research Fellow (1984–85). He has held a number of distinguished visiting assignments:
- C.Y.O'Connor Fellow, Curtin University, Perth, Australia (June–July, 1998)
- Municipal Chair Professor, University of LyonUniversity of LyonThe University of Lyon , located in Lyon and Saint Etienne, France, is a center for higher education and research comprising 16 institutions of higher education...
1 Lyon, France (April–June, 1994) - Erskine Fellow University of CanterburyUniversity of CanterburyThe University of Canterbury , New Zealand's second-oldest university, operates its main campus in the suburb of Ilam in the city of Christchurch, New Zealand...
, Christchurch, New Zealand (Feb–March, 1991)
Honors and awards
- President Elect, Production and Operations Management Society (2011–12)
- Fellow of the Society for Industrial and Applied MathematicsSociety for Industrial and Applied MathematicsThe Society for Industrial and Applied Mathematics was founded by a small group of mathematicians from academia and industry who met in Philadelphia in 1951 to start an organization whose members would meet periodically to exchange ideas about the uses of mathematics in industry. This meeting led...
(2009) - Distinguished Alum of IIT Bombay (2008)
- Conferences organized in his honor in 2005 and 2006
- Books edited in his honor in 2005 and 2006
- Fellow of Production and Operations Management Society (2005)
- Wickham-Skinner Best Paper Award at The 2nd World Conference on POM, 15th Annual Production and Operations Management Conference held in Cancun, Mexico (2004)
- INFORMS Fellow (2003), AAASAmerican Association for the Advancement of ScienceThe American Association for the Advancement of Science is an international non-profit organization with the stated goals of promoting cooperation among scientists, defending scientific freedom, encouraging scientific responsibility, and supporting scientific education and science outreach for the...
Fellow (2003) - IEEE Fellow (2001)
- Outstanding Contribution in Education, Greater Dallas Indo-American Chamber of Commerce (2001)
- Senior Research Fellow of the IC2 Institute at UT Austin (2000)
- Fellow of the New York Academy of SciencesNew York Academy of SciencesThe New York Academy of Sciences is the third oldest scientific society in the United States. An independent, non-profit organization with more than members in 140 countries, the Academy’s mission is to advance understanding of science and technology...
(1999) - Canadian Operational Research Society Award of Merit (1996)
- Fellow of the Royal Society of CanadaRoyal Society of CanadaThe Royal Society of Canada , may also operate under the more descriptive name RSC: The Academies of Arts, Humanities and Sciences of Canada , is the oldest association of scientists and scholars in Canada...
(1994) - Listed in Canadian Who's Who, Marquis Who's Who in the World and Marquis Who's Who in the America
- Phi Kappa PhiPhi Kappa PhiThe Honor Society of Phi Kappa Phi is an honor society established 1897 to recognize and encourage superior scholarship without restriction as to area of study and to promote the "unity and democracy of education"...
and Beta Gamma SigmaBeta Gamma SigmaBeta Gamma Sigma or ΒΓΣ is an honor society for business students and scholars. Founded in 1913 at the University of Wisconsin, it has over 650,000 members, selected from over 500 chapters in AACSB-accredited business schools...
Sethi advertising model
The Sethi advertising model or simply the Sethi modelSethi model
The Sethi model was developed by Suresh P. Sethi and describes the process of how sales evolve over time in response to advertising. The rate of change in sales depend on three effects: response to advertising that acts positively on the unsold portion of the market, the loss due to forgetting or...
was developed by Suresh P. Sethi in 1981, and it describes the process of how sales evolve over time in response to advertising. The rate of change in sales depend on three effects: response to advertising that acts positively on the unsold portion of the market, the loss due to forgetting or possibly due to competitive factors that act negatively on the sold portion of the market, and a random effect that can go either way. The model and some extensions have been empirically tested and are widely used in the marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
literature.
DNSS points
DNSS points arise in optimal controlOptimal control
Optimal control theory, an extension of the calculus of variations, is a mathematical optimization method for deriving control policies. The method is largely due to the work of Lev Pontryagin and his collaborators in the Soviet Union and Richard Bellman in the United States.-General method:Optimal...
problems that exhibit multiple optimal solutions. A DNSS point
DNSS point
DNSS points arise in optimal control problems that exhibit multiple optimal solutions. A DNSS point-named alphabetically after Deckert and Nishimura, Sethi, and Skiba-is an indifference point in an optimal control problem such that starting from such a point, the problem has more than one different...
is an indifference point in an optimal control
Optimal control
Optimal control theory, an extension of the calculus of variations, is a mathematical optimization method for deriving control policies. The method is largely due to the work of Lev Pontryagin and his collaborators in the Soviet Union and Richard Bellman in the United States.-General method:Optimal...
problem such that starting from such a point, the problem has more than one different optimal solutions. Suresh P. Sethi identified such indifference points for the first time in 1977.
Hierarchical manufacturing systems
Most manufacturing systems are large, complex, and subject to uncertainty. The problem of the efficient management of such systems is of critical importance to a nation's economic competitiveness. However, obtaining optimal feedback policies to run these systems is usually impossible. Hierarchical feedback control policies, on the other hand, offer the promise of being able to handle realistically complex manufacturing systems in a tractable fashion to make their management more efficient. Suresh Sethi and his co-authors have articulated a profound theory that shows that hierarchical decision making in the context of a goal-seeking manufacturing system can lead to near optimization of its objective. They consider manufacturing systems in which events occur at different time scales. In such systems, longer term decisions such as those dealing with capital expansion can be based on the average existing production capacity and can be expected to be nearly optimal even though the shorter term capacity fluctuations are ignored. Having the long-term decisions in hand, one can then solve the simpler problem of obtaining production rates. Multilevel decisions constructed in this manner are shown to be asymptotically optimal as the average time between successive short-term events becomes much smaller than that between successive long-term events. Much attention is given to establish that the order of deviation of the cost of the hierarchical solution from the optimal cost is small. The striking novelty of their approach is that this is done without the insurmountable task of solving for the optimal solution. The approach represents a new paradigm in convex production planning and a new research direction in control theory. The research presented cuts across the disciplines of Operations ManagementOperations management
Operations management is an area of management concerned with overseeing, designing, and redesigning business operations in the production of goods and/or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed, and...
, Operations Research
Operations research
Operations research is an interdisciplinary mathematical science that focuses on the effective use of technology by organizations...
, System and Control Theory
Control theory
Control theory is an interdisciplinary branch of engineering and mathematics that deals with the behavior of dynamical systems. The desired output of a system is called the reference...
, Industrial Engineering
Industrial engineering
Industrial engineering is a branch of engineering dealing with the optimization of complex processes or systems. It is concerned with the development, improvement, implementation and evaluation of integrated systems of people, money, knowledge, information, equipment, energy, materials, analysis...
, Probability
Probability
Probability is ordinarily used to describe an attitude of mind towards some proposition of whose truth we arenot certain. The proposition of interest is usually of the form "Will a specific event occur?" The attitude of mind is of the form "How certain are we that the event will occur?" The...
and Statistic
Statistic
A statistic is a single measure of some attribute of a sample . It is calculated by applying a function to the values of the items comprising the sample which are known together as a set of data.More formally, statistical theory defines a statistic as a function of a sample where the function...
, and Applied Mathematics
Mathematics
Mathematics is the study of quantity, space, structure, and change. Mathematicians seek out patterns and formulate new conjectures. Mathematicians resolve the truth or falsity of conjectures by mathematical proofs, which are arguments sufficient to convince other mathematicians of their validity...
. The research is detailed in two books.
Inventory problems with incomplete information
For the first time since the beginning of the inventory theoryInventory theory
Inventory theory is the sub-specialty within operations research that is concerned with the design of production/inventory systems to minimize costs...
nearly hundred years ago, Sethi and co-authors have extended the filtering theory in the electrical engineering
Electrical engineering
Electrical engineering is a field of engineering that generally deals with the study and application of electricity, electronics and electromagnetism. The field first became an identifiable occupation in the late nineteenth century after commercialization of the electric telegraph and electrical...
literature to treat inventory models with incomplete information. It is shown that ignoring this realistic feature comes at a significant cost. Also, the existence of optimal feedback
Feedback
Feedback describes the situation when output from an event or phenomenon in the past will influence an occurrence or occurrences of the same Feedback describes the situation when output from (or information about the result of) an event or phenomenon in the past will influence an occurrence or...
ordering policies is proved and these policies are partially characterized.
Inventory problems with Markovian demand and forecast updates
Sethi and co-authors have made sustained contributions to the study of inventory problems with Markovian demands with discounted as well as average-cost criteria. In addition, they have generalized the standard assumptions to include unbounded demands and cost functions having polynomial growth. Their work is detailed in a book titled Markovian Demand Inventory Models.Sethi and co-authors have studied the optimality of base stock and
type policies in case of forecast updates and multiple delivery modes. They introduce a general forecast updating scheme, termed peeling layers of an onion, and show the optimality of forecast-dependent base stock and policies with two delivery modes. They show further that the base stock policy is no longer optimal for other than the first two consecutive modes. These results are collected in a 2005 book by Sethi, Yan, and Zhang titled Inventory and Supply Chain Management with Forecast Updates.Forecast and decision horizons
In 1978, Sethi began to look into the fundamental problem of how long-term planning influences immediate decisions. His work (with C. Bes) on decision and forecast horizons has provided a logical framework for the practice of finite horizon assumptions and the choice of horizon. This framework has been widely adopted by researchers in the area.Supply chain contracts with risk-averse agents
Much of the research in operations management assumes that the agents in supply chainSupply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
are expected profit maximizers. However, it is well known in the finance literature that individuals are usually risk averse. Gan and Sethi generalized the existing supply contracts to allow for the agents to be risk averse. They developed a definition of coordination in this case, based on the Nash Bargaining Solution, and obtain coordinating contracts in a variety of supply chains with agents observing different risk-averse objectives.
Flexibility in manufacturing
Developed the widely used framework of “Flexibility in Manufacturing”.Scheduling in robotic cells
Optimum operations in robotic cells: schedulingScheduling
Scheduling is the process of deciding how to commit resources between a variety of possible tasks. Time can be specified or floating as part of a sequence of events.The word may also refer to:...
of parts and re-sequencing of robot moves.
Investment/consumption problems with bankruptcy
The problem of optimal consumption and investment is concerned with the decisions of a single agent endowed with some initial wealth who seeks to maximize total expected discounted utility of consumption. The decisions are the rate of consumption and the allocation of their wealth directed to risky and risk-free investments over time. The problem was first studied by Paul SamuelsonPaul Samuelson
Paul Anthony Samuelson was an American economist, and the first American to win the Nobel Memorial Prize in Economic Sciences. The Swedish Royal Academies stated, when awarding the prize, that he "has done more than any other contemporary economist to raise the level of scientific analysis in...
and Robert Merton
Robert Merton
Robert Merton may refer to:*Robert K. Merton , American sociologist*Robert C. Merton , American economist, Nobel Laureate, MIT professor, son of Robert K. Merton...
in 1969 and 1971; however none of their formulations took into account the possibility that an agent might go bankrupt in the process. In a set of articles published during the period from 1979 to 1996, Suresh Sethi and various co-authors explicitly introduced a bankruptcy value/penalty in the consumption/investment model. In addition, they also introduced a nonzero subsistence consumption level, which makes the consideration of bankruptcy even more important. This provided the ability to deal mathematically with the problems of bankruptcy in the study of consumption and investment. This research provides a useful frame for deepening our understanding of the consumption and portfolio selection behavior of individuals and households, and it is collected in a book titled Optimal Consumption and Investment with Bankruptcy.
Optimal control formulations and solutions of a variety of dynamic operations management and economics problems
Suresh Sethi is the key figure in the development and use of optimal control theory to address dynamic and stochastic problems in management science. Sethi wrote his 1972 doctoral thesis on optimal control and its applications. Sethi extended the theory to deal with the special characteristics of management problems, such as the nonnegativity constraints and time lags. His thesis and the subsequent work eventually led to the classic 1981 Sethi-Thompson book that brought the theory of optimal control to management schools. The second edition (505 pages) of this classic text became available in Fall 2000. Central to the book is its extraordinarily wide range of optimal control theory applications. These cover finance, production and inventory problems, marketing, machine maintenance and replacement, optimal consumption of natural resources (renewable or exhaustible), and a number of applications to economics.Causality detection in multivariate stochastic processes
Caines, Keng and Sethi developed the theory of multivariable causalityCausality
Causality is the relationship between an event and a second event , where the second event is understood as a consequence of the first....
in the time series analysis, and also applied it to study the determinants of the sales in the Toronto supermarkets. Prior to this, causality studies were used to detect whether a variable such as advertising causes sales over time or whether advertising expenditures are in practice determined as some percentage of sales. The authors extended the concept of causality when more than two variables are involved.
Optimal Economic Growth with Value of Population and Genuine Savings
ArrowKenneth Arrow
Kenneth Joseph Arrow is an American economist and joint winner of the Nobel Memorial Prize in Economics with John Hicks in 1972. To date, he is the youngest person to have received this award, at 51....
et al. study a model of economic growth with population growing in an arbitrary manner. This requires population as well as capital as state variables. In a later paper, they consider population dynamics to be endogenously determined and derive the expression of genuine savings and evaluate the sustainability of the economic system.
External links
- Homepage of Suresh P. Sethi
- Suresh P. Sethi’s homepage at UT Dallas
- SSRN Author Page of Suresh P. Sethi
- Author Page of Suresh P. Sethi at MathSciNet
- Suresh P. Sethi at the Mathematics Genealogy Project
- Wikipedia page of Sethi surnameSethiSethi is a common Khukhrain surname among Punjabi people. Sethis are found in Punjab, India and Pakistan and are mainly Hindus, Sikhs-Etymology:...
- Author Page of Suresh P. Sethi at RePec/EconPapers