Pricing, replenishment, and timing of selling in a market with heterogeneous customers

Shoshana Anily and Refael Hassin

International Journal of Production Economics, 2013, vol. 145, issue 2, 672-682

Abstract: We consider a deterministic pricing and replenishment model in which the retailer advertises a fixed price and the selling schedule, and customers can advance or delay their time of purchase incurring holding or shortage costs. We investigate the impact of heterogeneity in the customers' reservation prices. We show that the resulting optimal solution may be very different from that obtained when customers are homogeneous. We identify nine types of possible optimal sales strategies, and compute their profits. In particular, the solution may contain sales at several discrete points of time between consecutive replenishment epochs with no sales between them.

Keywords: Replenishment policies; Pricing; Strategic customers (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:145:y:2013:i:2:p:672-682

DOI: 10.1016/j.ijpe.2013.05.021

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