The risk-averse (and prudent) newsboy
Management Science
Pricing and the News Vendor Problem: a Review with Extensions
Operations Research
Revenue Management: Research Overview and Prospects
Transportation Science
Combined Pricing and Inventory Control Under Uncertainty
Operations Research
Mathematics of Operations Research
(s, S) Optimality in Joint Inventory-Pricing Control: An Alternate Approach
Operations Research
A new approach for the stochastic cash balance problem with fixed costs
Probability in the Engineering and Informational Sciences
Revenue Management with Costly Price Adjustments
Operations Research
Inventory Centralization Games with Price-Dependent Demand and Quantity Discount
Operations Research
An Elasticity Approach to the Newsvendor with Price-Sensitive Demand
Operations Research
Coordinating inventory control and pricing strategies: The continuous review model
Operations Research Letters
Hi-index | 0.00 |
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.