Joint Inventory and Pricing Coordination with Incomplete Demand Information

• 成果类型: Article
• 署名作者: Lu, Ye; Song, Miao; Yang, Yi
• 署名单位: City University of Hong Kong; Hong Kong Polytechnic University; Zhejiang University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12504
• 发表日期: 2016
• 页码: 701-718
• 关键词: inventory and pricing coordination; incomplete demand information; K-approximate convexity

摘要

In retailing operations, retailers face the challenge of incomplete demand information. We develop a new concept named K-approximate convexity, which is shown to be a generalization of K-convexity, to address this challenge. This idea is applied to obtain a base-stock list-price policy for the joint inventory and pricing control problem with incomplete demand information and even non-concave revenue function. A worst-case performance bound of the policy is established. In a numerical study where demand is driven from real sales data, we find that the average gap between the profits of our proposed policy and the optimal policy is 0.27%, and the maximum gap is 4.6%.