Product Line Selection and Pricing with Modularity in Design
Manufacturing & Service Operations Management
Assortment Planning and Inventory Decisions Under Stockout-Based Substitution
Operations Research
Pricing and inventory management in a system with multiple competing retailers under (r, Q) policies
Computers and Operations Research
Manufacturing & Service Operations Management
Price-only contracts with backup supply
Operations Research Letters
On the modeling of demand spill for a stochastic demand system under competition
Operations Research Letters
Product and Price Competition with Satiation Effects
Management Science
Manufacturing & Service Operations Management
Optimal Dynamic Assortment Planning with Demand Learning
Manufacturing & Service Operations Management
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We propose a static approximation of dynamic demand substitution behavior based on a fluid network model and a service-inventory mapping. This approximation greatly enhances our ability to analyze the interdependent inventory/service, price, and product assortment decisions in noncompetitive and competitive scenarios with demand substitution. We demonstrate that the approximation is well behaved and then apply it to two previously intractable applications. First, we study a price and service competition between single-product retailers. After establishing a unique pure-strategy Nash equilibrium, we find that competition results in lower price, higher demand, and a higher level of inventory. We also observe that the aggregate profit and inventory level increase to positive constants as the number of retailers goes to infinity. Second, we study a duopolistic competition on price, service, and product assortment. We establish a pure-strategy Nash equilibrium for the product assortment competition and identify a condition for uniqueness. We find that competition on both price and product assortment results in lower price and less variety for each competitor, but the total number of products and the aggregate inventory level in a duopoly market are both likely to be higher than in a monopolistic market.