Technical Note---Optimal Dynamic Joint Inventory-Pricing Control for Multiplicative Demand with Fixed Order Costs and Lost Sales

Yuyue Song (), Saibal Ray () and Tamer Boyaci ()
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Yuyue Song: Faculty of Business Administration, Memorial University of Newfoundland, St. John's, Newfoundland, Canada A1B 3X5
Saibal Ray: Desautels Faculty of Management, McGill University, Montreal, Quebec, Canada H3A 1G5
Tamer Boyaci: Desautels Faculty of Management, McGill University, Montreal, Quebec, Canada H3A 1G5

Operations Research, 2009, vol. 57, issue 1, 245-250

Abstract: This note studies the optimal dynamic decision-making problem for a retailer in a price-sensitive, multiplicative demand framework. Our model incorporates lost sales, holding cost, fixed and variable procurement costs, as well as salvage value. We characterize the structure of the retailer's (discounted) expected profit-maximizing dynamic inventory policy for both finite and infinite selling horizon problems.

Keywords: dynamic pricing and inventory control; multiplicative demand; fixed cost; lost sales (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:oropre:v:57:y:2009:i:1:p:245-250

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