Ordering and pricing policies for random discount offerings and permissible shortages
Source: International Journal of Operational Research, Volume 2, Number 4, 24 June 2007 , pp. 400-413(14)
Publisher: Inderscience Publishers
Abstract:This study develops the ordering and pricing policies of a retailer, confronted with a price-dependent demand and a vendor offering a discount on the wholesale/regular price during sales sub-periods, which are repeated randomly and last for a random amount of time. The inventory level forms a regenerative stochastic process, with regeneration points at the start of the discount sub-periods. The objective is to maximise the long run expected profit per unit time, expressed as a function the order quantity, reorder level and retail price for regular and discount sub-periods.
Document Type: Research article
Affiliations: 1: Emeritus Professor, University of New Brunswick, Canada and Departamento de Gestion de Empresas, Universidad Publica de Navarra, 31006 Pamplona, Navarra, Spain. 2: Department of Statistics, Mangalore University, Mangalagangotri 574 199, India. 3: Faculty of Administration, University of New Brunswick, P.O. Box 4400, Fredericton, N.B. E3B 5A3, Canada
Publication date: 2007-06-24