Management Science and Engineering Department's Lecture

Theme：Sustainability in the Fast Fashion Industry

Speaker：Xiaoyang Long (Assistant Professor of Operations and Information Management, School of Business, University of Wisconsin-Madison)

Time：2019-07-10 12:00

Address：Room 504, Mingde Business Building

Language：Chinese/English

Title：Sustainability in the Fast Fashion Industry
Speaker：Xiaoyang Long (Assistant Professor of Operations and Information Management, School of Business, University of Wisconsin-Madison)
Time：12:00—13:30, (Wednesday), July 10th, 2019
Venue：Room 504, Mingde Business Building
Language：Chinese/English

Abstract：
A fast fashion system allows firms to react quickly to changing consumer demand by replenishing inventory (via quick response) and introducing more fashion styles. In this paper, we study the environmental implications of the fast fashion business model by analyzing its implications for product quality, variety, and inventory decisions. We find that a key driver of low product quality in the fast fashion industry is the firm’s incentive to introduce multiple styles in the presence of uncertain fashion trends. When variety is endogenous, quality decreases as consumers become more sensitive to fashion or as the cost of introducing new styles decreases. We also identify conditions under which expected leftover inventory increases as the firm’s fast fashion capabilities increase. To counter the environmental impact of the fast fashion business model due to low quality and overproduction, we assess the effectiveness of three environmental initiatives (waste disposal regulations, consumer education, and post-consumer recycling programs). We show that waste disposal policies which reduce the firm’s leftover inventory could have the unintended consequence of lowering product quality. We also compare firm-owned versus third-party recycling programs and propose a revenue-sharing scheme which could induce higher levels of recycling rate and product quality—while increasing the system’s total profit.

Short biography：
Xiaoyang Long joined the Wisconsin School of Business after completing her Ph.D. in Operations Management at the HKUST. She also holds a B.A. in Physics from Princeton University. Her research has been published on Management Science and Manufacturing & Service Operations Management.