Optimal and Near Optimal Price and Advertising Strategies for Finite and Infinite Horizons

Ulf Peter Welam
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Ulf Peter Welam: Boston University

Management Science, 1982, vol. 28, issue 11, 1313-1327

Abstract: The simplest price and advertising optimization model consistent with current empirical research is formulated and analyzed. An explicit horizon function is introduced to compare and synthesize the finite and infinite horizon situations. The practically prevalent procedure of setting this period's advertising expenditure proportional to the previous period's sales is, for good reasons, declared near optimal.

Keywords: marketing; advertising rules (search for similar items in EconPapers)
Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:28:y:1982:i:11:p:1313-1327

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