A Joint Location-Inventory Model
Transportation Science
Pricing and the News Vendor Problem: a Review with Extensions
Operations Research
Optimizing Delivery Fees for a Network of Distributors
Manufacturing & Service Operations Management
Multilocation Combined Pricing and Inventory Control
Manufacturing & Service Operations Management
Introduction to Probability Models, Ninth Edition
Introduction to Probability Models, Ninth Edition
Requirements Planning with Pricing and Order Selection Flexibility
Operations Research
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In the majority of classical inventory theory literature, demand arises from exogenous sources upon which the firm has little or no control. In many practical contexts, however, aggregate demand is comprised of individual demands from a number of distinct customers or markets. This introduces new dimensions to supply chain planning problems involving the selection of markets or customers to include in the demand portfolio. We present a nonlinear, combinatorial optimization model to address planning decisions in both deterministic and stochastic settings, where a firm constructs a demand portfolio from a set of potential markets having price-sensitive demands. We first consider a pricing strategy that dictates a single price throughout all markets and provide an efficient algorithm for maximizing total profit. We also analyze the model under a market-specific pricing policy and describe its optimal solution. An extensive computational study characterizes the effects of key system parameters on the optimal value of expected profit, and provides some interesting insights on how a given market's characteristics can affect optimal pricing decisions in other markets.