Simultaneous Price-Production Decisions

Dov Pekelman
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Dov Pekelman: University of Chicago, Chicago, Illinois

Operations Research, 1974, vol. 22, issue 4, 788-794

Abstract: This paper deals with the problem of determining the price and production schedule of a firm over a known horizon simultaneously when the demand parameters are time-dependent. It characterizes the optimal solution and shows the similarity of our problem to the well known problem of Modigliani and Hohn [ Econometrica 23, 46–66 (1955)]. It also demonstrates the possible existence of a planning horizon. These results are obtained by using control theory, in particular, by using the necessary and sufficient conditions for a state constraint in the form of a nonnegative constraint on the inventory level.

Date: 1974
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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:22:y:1974:i:4:p:788-794

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