Two-period pricing and ordering policy with price-sensitive uncertain demand

Tulika Chakraborty, Satyaveer S. Chauhan, Anjali Awasthi and Tatiana Bouzdine-Chameeva

Journal of the Operational Research Society, 2019, vol. 70, issue 3, 377-394

Abstract: Demand for the products change with the time and thus production, promotion, pricing, etc. should be adopted at the time. In general, it is true for many hi-tech consumer products such as PCs, Mobiles, TVs and phones where demand is low and prices are high in the beginning and demand pick-up with a possible price drop in the growth face. In this work, we consider such a supply chain where the retailer sales a product over two selling periods with price-sensitive stochastic demands. Two types of models are proposed. Basic models are based on wholesale price contract. To improve the channel efficiency, we address the return policy. We show that the return policy is not always a win-win policy and cannot improve the whole channel efficiency in all cases. Finally, we carry out a comprehensive computational analysis to draw key insights of our models from the managerial point of view.

Date: 2019
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DOI: 10.1080/01605682.2018.1440159

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