Integration of Inventory and Pricing Decisions with Costly Price Adjustments

• 成果类型: Article
• 署名作者: Chen, Xin; Zhou, Sean X.; Chen, Youhua (Frank)
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Chinese University of Hong Kong
• 刊物名称: OPERATIONS RESEARCH
• ISSN/ISSBN: 0030-364X
• DOI: 10.1287/opre.1110.0946
• 发表日期: 2011
• 页码: 1144-1158
• 关键词: fixed ordering cost; random demand; strategies; newsvendor

摘要

Motivated by the widespread adoption of dynamic pricing in industry and the empirical evidence of costly price adjustments, in this paper we consider a periodic-review inventory model with price adjustment costs that consist of both fixed and variable components. In each period, demand is stochastic and price-dependent. The firm needs to coordinate the pricing and inventory replenishment decisions in each period to maximize its total discounted profit over a finite planning horizon. We develop the general model and characterize the optimal policies for two special scenarios, namely, a model with inventory carryover and no fixed price-change costs and a model with fixed price-change costs and no inventory carryover. Finally, we propose an intuitive heuristic policy to tackle the general system whose optimal policy is expected to be very complicated. Our numerical studies show that this heuristic policy performs well.