A Modeling Framework for Coordinating Promotion and Production Decisions within a Firm

Aram G. Sogomonian and Christopher S. Tang
Additional contact information
Aram G. Sogomonian: Anderson Graduate School of Management, University of California, Los Angeles, California 90024
Christopher S. Tang: Anderson Graduate School of Management, University of California, Los Angeles, California 90024

Management Science, 1993, vol. 39, issue 2, 191-203

Abstract: This paper presents a modeling framework for evaluating the benefits of coordinating promotion and production decisions over a finite planning horizon within a firm. These decisions include the timing and level of promotion, and the level of production. The modeling framework consists of the development of a baseline model and an integrated model. In the baseline (integrated) model, the firm would consider those promotion and production decisions separately (jointly). For each of the models, we formulate the problem that determines the optimal promotion and production decisions so that the total net profit is maximized as a mixed integer program. By exploiting the structure of the problem, we show that each problem can be reformulated as a "longest path" problem over a network. Hence, each problem can be solved efficiently. This solution approach enables us to evaluate the benefits of coordinating promotion and production decisions by comparing the total net profit generated by the baseline model to that of the integrated model.

Keywords: marketing/manufacturing interface; promotion; production; networks (search for similar items in EconPapers)
Date: 1993
References: Add references at CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.39.2.191 (application/pdf)

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:inm:ormnsc:v:39:y:1993:i:2:p:191-203

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().