Pang, Zhan and Chen, Frank (Youhua) and Feng, Youyi (2012) A Note on the Structure of Joint Inventory-Pricing Control with Lead Times. Operations Research, 60 (3). pp. 581-587. ISSN 0030-364X
Full text not available from this repository.Abstract
We consider a joint inventory-pricing control problem for a periodic-review, single-stage inventory system with a positive order leadtime and a linear order cost. Demands in consecutive periods are independent but their distributions depend on the price in accordance with a stochastic demand function of additive form. Pricing and ordering decisions are made simultaneously at the beginning of each period. The objective is to maximize the total expected discounted profit over a finite horizon. We partially characterize the structure of the optimal joint ordering and pricing policies. We also show that our structural analysis can be extended to a multi-stage (or serial) inventory system with constant or stochastic leadtimes and an assemble-to-order system with price-sensitive demand.