Price Versus Production Postponement: Capacity and Competition
Management Science
Pricing and the News Vendor Problem: a Review with Extensions
Operations Research
Combined Pricing and Inventory Control Under Uncertainty
Operations Research
Dynamic Pricing and the Direct-to-Customer Model in the Automotive Industry
Electronic Commerce Research
Requirements Planning with Pricing and Order Selection Flexibility
Operations Research
Optimal pricing and production policies of a make-to-stock system with fluctuating demand
Probability in the Engineering and Informational Sciences
Dynamic selling of quality-graded products under demand uncertainties
Computers and Industrial Engineering
Policies utilizing tactical inventory for service-differentiated customers
Operations Research Letters
Queuing system for different classes of customers
International Journal of Business Information Systems
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We study determining prices and production jointly in a multiple period horizon under a general, nonstationary stochastic demand function with a discrete menu of prices. We assume that the available production capacity is limited and that unmet demand is lost. We incorporate discretionary sales, when inventory may be set aside to satisfy future demand even if some present demand is lost. We analyze and compare partial planning or delayed strategies. In delayed strategies, one decision may be planned in advance, whereas a second decision is delayed until the beginning of each time period, after observing the results of previous decisions. For example, in delayed production (delayed pricing), pricing (production) is determined at the beginning of the horizon, and the production (pricing) decision is made at the beginning of each period before new customer orders are received. A special case is where a single price is chosen over the horizon. We describe policies and heuristics for the strategies based on deterministic approximations and analyze their performances. Computational analysis yields additional insights about the strategies, such as that delayed production is usually better than delayed pricing except sometimes when capacity is tight. On average, the delayed production (pricing) heuristic achieved 99.3 (99.8) of the corresponding optimal strategy.