Research output: Contribution to Journal/Magazine › Journal article › peer-review
A Note on the Structure of Joint Inventory-Pricing Control with Lead Times. / Pang, Zhan; Chen, Frank (Youhua); Feng, Youyi.
In: Operations Research, Vol. 60, No. 3, 05.2012, p. 581-587.Research output: Contribution to Journal/Magazine › Journal article › peer-review
}
TY - JOUR
T1 - A Note on the Structure of Joint Inventory-Pricing Control with Lead Times.
AU - Pang, Zhan
AU - Chen, Frank (Youhua)
AU - Feng, Youyi
PY - 2012/5
Y1 - 2012/5
N2 - We consider a joint inventory-pricing control problem for a periodic-review, single-stage inventory system with a positive order leadtime and a linear order cost. Demands in consecutive periods are independent but their distributions depend on the price in accordance with a stochastic demand function of additive form. Pricing and ordering decisions are made simultaneously at the beginning of each period. The objective is to maximize the total expected discounted profit over a finite horizon. We partially characterize the structure of the optimal joint ordering and pricing policies. We also show that our structural analysis can be extendedto a multi-stage (or serial) inventory system with constant or stochastic leadtimes and an assemble-to-order system with price-sensitive demand.
AB - We consider a joint inventory-pricing control problem for a periodic-review, single-stage inventory system with a positive order leadtime and a linear order cost. Demands in consecutive periods are independent but their distributions depend on the price in accordance with a stochastic demand function of additive form. Pricing and ordering decisions are made simultaneously at the beginning of each period. The objective is to maximize the total expected discounted profit over a finite horizon. We partially characterize the structure of the optimal joint ordering and pricing policies. We also show that our structural analysis can be extendedto a multi-stage (or serial) inventory system with constant or stochastic leadtimes and an assemble-to-order system with price-sensitive demand.
KW - Pricing
KW - Inventory Management
KW - Stochastic Dynamic Programming
U2 - 10.1287/opre.1120.1052
DO - 10.1287/opre.1120.1052
M3 - Journal article
VL - 60
SP - 581
EP - 587
JO - Operations Research
JF - Operations Research
SN - 0030-364X
IS - 3
ER -