Dynamic Stochastic Inventory Management with Reference Price Effects
成果类型：
Article
署名作者：
Chen, Xin; Hu, Peng; Shum, Stephen; Zhang, Yuhan
署名单位：
University of Illinois System; University of Illinois Urbana-Champaign; Huazhong University of Science & Technology; City University of Hong Kong
刊物名称：
OPERATIONS RESEARCH
ISSN/ISSBN：
0030-364X
DOI：
10.1287/opre.2016.1524
发表日期：
2016
页码：
1529-1536
关键词：
摘要：
We analyze the joint inventory and pricing decisions of a firm when demand depends on not only the current selling price but also a memory-based reference price and customers are loss averse. The presence of reference price effect leads to a nonconcave one-period expected revenue in price and reference price. We introduce a transformation technique that allows us to prove under some mild assumptions the optimality of a reference-price-dependent base-stock list-price policy, which is characterized by a base-stock level and a target reference price. In addition, we show that the target reference price is increasing in the reference price, but except in the loss-neutral case, the base-stock level is not monotone in the reference price. We also show that in the steady state of the model with the reference price effect, the optimal price is lower while the optimal base-stock level is higher than their counterparts in the model without the reference price effect.