HKUST Business Review

This article draws on the research paper titled "Multiobjective Stochastic Optimization: A Case of Real-Time Matching in Ride-Sourcing Markets," authored by Lyu Guodong, CHEUNG Wang Chi, TEO Chung-Piaw, and WANG Hai. Lyu Guodong is an assistant professor of operations management at HKUST, with research interests in supply chain visibility, smart city operations, and sustainable development. Going Beyond Ride-Share First, Meituan, a leading on-demand food delivery service in China, evaluated the effectiveness of our framework in balancing objectives such as courier efficiency and consumer experience throughout the food dispatch process. Through A/B tests comparing Meituan’s standard approach with our system for testing periods of at least two weeks each across five cities in China, Meituan’s team found that this framework led to an average improvement of on-time delivery rates of 0.33 percentage points, as well as a decrease in average travel distance of 0.92%. And finally, we applied our framework to help craft online coupon assignment policies for an Indonesian e-commerce platform. In this context, we aimed to match coupon offers to customers in a way that would increase revenue while also maximizing total payment amounts, covering campaign costs, and adhering to a predetermined total budget. And again, simulations with real-world data suggested that using our approach to dynamically adjust how much these different factors were weighted in response to real- time data would help the platform boost revenue by more than 3% without exceeding its budget. Balancing competing objectives is hard. Even with the best possible strategy, these trade-offs require compromise, and it’s not always obvious which factor to prioritize when. But with our simple, three-step framework, leaders in any industry can leverage real-time data to dynamically adjust their prioritization schemes in the moment, empowering organizations and decision-makers to optimize for revenue while ensuring that goals like sustainable success and user-centric innovation aren’t overlooked. 11 HKUST Business Review