EconPapers    
Economics at your fingertips  
 

Joint dynamic pricing and lot-sizing under competition

Alejandro Lamas and Philippe Chevalier

European Journal of Operational Research, 2018, vol. 266, issue 3, 864-876

Abstract: We study the joint dynamic pricing and lot-sizing problem when firms operate in a competitive environment. Bearing in mind that a dynamic pricing strategy is successful when customers understand it, we assume each firm selects prices from a discrete set. The problem corresponds to a Bertrand model, so the pricing strategies of the firms should constitute a Nash Equilibrium. Given the combinatorial nature of the decisions, computing the equilibrium in a tractable time may not be feasible for larger instances. In order to compute the equilibrium efficiently, we propose a framework consisting of solving iteratively Mixed Integer Programming formulations. The framework reduces the complexity of the problem by using the fact that pricing and inventory planning remain stable to marginal variations in competitors’ prices.

Keywords: Production; Dynamic pricing; Competition; Lot-sizing; Joint production/marketing decisions (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0377221717309396
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Joint dynamic pricing and lot-sizing under competition (2018)
Working Paper: Joint dynamic pricing and lot-sizing under competition (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:266:y:2018:i:3:p:864-876

DOI: 10.1016/j.ejor.2017.10.026

Access Statistics for this article

European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

More articles in European Journal of Operational Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2025-03-19
Handle: RePEc:eee:ejores:v:266:y:2018:i:3:p:864-876