Pricing and inventory policies for Hi-tech products under replacement warranty

Yu-Chung Tsao, Wei-Guang Teng, Ruey-Shii Chen and Wang-Ying Chou

International Journal of Systems Science, 2014, vol. 45, issue 6, 1255-1267

Abstract: Companies, especially in the Hi-tech (high-technology) industry (such as computer, communication and consumer electronic products), often provide a replacement warranty period for purchased items. In reality, simultaneously determining the price and inventory decisions under warranty policy is an important issue. The objective of this paper is to develop a joint pricing and inventory model for Hi-tech products under replacement warranty policy. In the first model, we consider a Hi-tech product feature in which the selling price is declining in a trend. We determine the optimal inventory level for each period and retail price for the first period while maximising the total profit. In the second model, we further determine the optimal retail price and inventory level for each period in the dynamic demand market. This study develops solution approaches to solve the problems described above. Numerical analysis discusses the influence of system parameters on the company's decisions and behaviours. The results of this study could serve as a reference for business managers or administrators.

Date: 2014
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://hdl.handle.net/10.1080/00207721.2012.761454 (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:tsysxx:v:45:y:2014:i:6:p:1255-1267

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TSYS20

DOI: 10.1080/00207721.2012.761454

Access Statistics for this article

International Journal of Systems Science is currently edited by Visakan Kadirkamanathan

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