Coordination of Pricing and Multiple-Period Production Across Multiple Constant Priced Goods

Stephen M. Gilbert ()
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Stephen M. Gilbert: Management Department, Graduate School of Business Administration, The University of Texas at Austin, Austin, Texas 78712-1174

Management Science, 2000, vol. 46, issue 12, 1602-1616

Abstract: This paper addresses the problem of jointly determining prices and production schedules for a set of items that are produced on the same production equipment. Under the assumptions that the production setup costs are negligible and that demand is seasonal but price dependent, we exploit the special structure of the problem to develop a solution procedure. Through a set of numerical examples, we demonstrate how a product's contribution to aggregate seasonality can increase its optimal price. Our examples also demonstrate that, among products that experience demand peaks during the firm's busy season, those that peak early in the busy season should be priced more aggressively than those that peak later.

Keywords: production planning; pricing; coordination of marketing and operations decisions (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:46:y:2000:i:12:p:1602-1616

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