Information Acquisition for Capacity Planning via Pricing and Advance Selling: When to Stop and Act?

• 成果类型: Article
• 署名作者: Boyaci, Tamer; Oezer, Oezalp
• 署名单位: McGill University; University of Texas System; University of Texas Dallas
• 刊物名称: OPERATIONS RESEARCH
• ISSN/ISSBN: 0030-364X
• DOI: 10.1287/opre.1100.0798
• 发表日期: 2010
• 页码: 1328-1349
• 关键词: Supply chain; demand information; Newsvendor Problem; Inventory models; management; decisions; CONTRACTS; PRODUCTS; sales; pull

摘要

This paper investigates a capacity planning strategy that collects commitments to purchase before the capacity decision and uses the acquired advance sales information to decide on the capacity. In particular, we study a profit-maximization model in which a manufacturer collects advance sales information periodically prior to the regular sales season for a capacity decision. Customer demand is stochastic and price sensitive. Once the capacity is set, the manufacturer produces and satisfies customer demand (to the extent possible) from the installed capacity during the regular sales period. We study scenarios in which the advance sales and regular sales season prices are set exogenously and optimally. For both scenarios, we establish the optimality of a control band or a threshold policy that determines when to stop acquiring advance sales information and how much capacity to build. We show that advance selling can improve the manufacturer's profit significantly. We generate insights into how operating conditions (such as the capacity building cost) and market characteristics (such as demand variability) affect the value of information acquired through advance selling. From this analysis, we identify the conditions under which advance selling for capacity planning is most valuable. Finally, we study the joint benefits of acquiring information for capacity planning through advance selling and revenue management of installed capacity through dynamic pricing.