TECHNICAL NOTE---An Optimal Policy for Joint Dynamic Price and Lead-Time Quotation

Jiejian Feng (), Liming Liu () and Xiaoming Liu ()
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Jiejian Feng: School of Business, Saint Mary's University, Halifax, Nova Scotia B3H 3C3, Canada
Liming Liu: Faculty of Business, Lingnan University, Kowloon, Hong Kong, China
Xiaoming Liu: Faculty of Business Administration, University of Macao, Macao, China

Operations Research, 2011, vol. 59, issue 6, 1523-1527

Abstract: For a dynamic joint price and lead-time quotation problem with a fairly general demand function, we show that the policy consisting of a threshold and a reward-maximizing lead-time is optimal. This policy offers some interesting managerial insights. Under this policy, finding the exact optimal quotation can be accomplished by single-variable policy iterations of unimodal value functions.

Keywords: dynamic pricing; lead-time quotation; threshold policy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (10)

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