Compound Poisson demand with price-dependent intensity for fast moving items: price optimisation and parameters estimation

Anna V. Kitaeva, Alexandra O. Zhukovskaya and Oleg A. Zmeev

International Journal of Production Research, 2017, vol. 55, issue 14, 4153-4163

Abstract: We consider a single-period single-item inventory system. The demand is a compound Poisson process with price-dependent intensity and continuous batch size distribution. The intensity of the customers’ arrivals is sufficiently high to use a diffusion approximation of the demand process. Equations for retail price maximising of an expected profit with the optimal order quantity are obtained and an approximate solution is proposed. Numerical results illustrating the percentage of the increase in profit for linear price-intensity dependence are given. An approximate distribution of the selling time of a large order is obtained. Demand parameters estimation procedures based on two censored samples – the observed selling durations and demands – are discussed.

Date: 2017
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00207543.2016.1257168 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:tprsxx:v:55:y:2017:i:14:p:4153-4163

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TPRS20

DOI: 10.1080/00207543.2016.1257168

Access Statistics for this article

International Journal of Production Research is currently edited by Professor A. Dolgui

More articles in International Journal of Production Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().