2022 Franz Edelman Competition: Alibaba

This podcast is part of a special series featuring the 2022 finalist teams for the INFORMS Franz Edelman Award for Achievement in Advanced Analytics, Operations Research, and Management Science, the most prestigious award for achievement in the practice of O.R. and advanced analytics.

For more than four decades, the Edelman Award has recognized contributions that are transforming how we approach some of the world’s most complex problems. Finalists for the Edelman Award have contributed to a cumulative impact of more than $336 billion since the award’s inception, as well as countless other nonmonetary benefits. The winner of this year’s award will be announced at 2022 INFORMS Business Analytics Conference, April 3-5.

Joining me for this episode are Xinhui Zhang, Senior Director, Head of Supply Chain Management and Operations Research Committee, and Yuming Deng, Director, Digital Supply Chain, to discuss their team, Alibaba’s, finalist entry.

Alibaba, which aims to build the future infrastructure of commerce, has designed many multiplatform retail business models. These range from mobile apps to brick-and-mortars and more. Merchandise on Alibaba’s platforms covers general supplies to fresh produce. Each of these different channels and their products brings unique features regarding demand forecast and inventory management. These challenges are being solved through a series of algorithms to align supply with demand, which in turn has had a significant impact on the business.

Since the implementation of the algorithms, in the past two years, both shrinkage and out-of-stock rates have been steadily and significantly reduced, translating into tens of millions of dollars savings in costs each year. We believe inventory management is very important in retail, especially grocery and fresh produce retail. These algorithms have a direct impact on revenue and profit margins, and played a key role to achieve business successes.

Interviewed this episode:

Xinhui Zhang, Yuming Deng


Xinhui Zhang is currently a senior director, head of supply chain and operations research committee at Alibaba Group, and was a tenured full professor at Wright State University, Dayton, OH. He was a finalist for the 2013 Franz Edelman Award for Achievement in Operations Research and the Management Sciences by INFORMS for “Kroger Uses Simulation and Optimization to Improve Pharmacy Inventory”, and a finalist for 2021 Franz Edelman Award for Achievement in Operations Research and the Management Sciences by INFORM for “Alibaba VRP Algorithms have Enabled Its On-Time Hour-Level Delivery”. His specialties are supply chain management, inventory control, large-scale optimization in logistics, transportation, retail, and manufacturing industries.

Yuming Deng graduated from the Ph.D. program of Operations Research/Industrial Engineering, UT Austin in the US. After graduation, he joined amazon.com and worked on supply chain optimization for e-commerce. He returned to China to join Alibaba Group in 2014, specializing in the construction of Alibaba’s smart supply chain, with an emphasis on assortment planning, network planning, pricing strategy, demand forecasting, inventory optimization, fulfillment decision, simulation-based optimization as well as other research directions.