The economic value of using advance booking of orders

Lr Weatherford and Pe Pfeifer

Omega, 1994, vol. 22, issue 1, 105-111

Abstract: The advance booking of orders (ABO) is the practice of selling units of an item (either products or services) in advance of the actual availability of the item. We consider the question of whether or not advance bookings should be offered. Closed-form analytical results are derived for the expected profits for the classic single-period inventory (newsboy) problem both with and without advance bookings. These two profit expressions allow us to quantify the benefits of ABO. The benefits include both the yield-management benefits associated with the stimulation of demand and the planning and control benefits of using advance booking as a leading indicator of total demand.

Keywords: forecasting; decision; analysis; newsboy; problem; planning (search for similar items in EconPapers)
Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/0305-0483(94)90011-6
Full text for ScienceDirect subscribers only

Related works:
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:jomega:v:22:y:1994:i:1:p:105-111

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

Access Statistics for this article

Omega is currently edited by B. Lev

More articles in Omega from Elsevier
Bibliographic data for series maintained by Catherine Liu ().