Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
482455 | European Journal of Operational Research | 2006 | 18 Pages |
Abstract
Delayed incentives in the form of mail-in cash rebates are very popular among manufacturers, and more recently, among retailers. One of the main advantages of rebates is that while they increase demand, a small proportion of consumers redeem them. In this paper, we formulate and solve models for jointly determining the optimal price, rebate face value, and the optimal order quantity for a price and rebate sensitive deterministic demand. The models show that under realistic conditions, offering rebates can have significant pricing and inventory policy implications and can lead to a significant increase in profit.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Moutaz Khouja,