Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
477759 | European Journal of Operational Research | 2007 | 17 Pages |
Abstract
In this paper, we address the simultaneous determination of price and inventory replenishment in a newsvendor setting when the firm faces demand from two or more market segments in which the firm can set different prices. We allow for demand leakage from higher-priced segments to lower-priced segments and assume that unsatisfied demand can be backlogged. We examine the case where the demands occur concurrently without priority and are met from a single inventory. We consider customer’s buy-down behavior explicitly by modeling demand leakage as a function of segment price differentiation, and characterize the structure of optimal inventory and pricing policies.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Michael Zhang, Peter C. Bell,