Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
482835 | European Journal of Operational Research | 2006 | 14 Pages |
Abstract
Pricing is a major strategy for a retailer to obtain its maximum profit. Therefore, in this paper, we establish an economic order quantity model for a retailer to determine its optimal selling price, replenishment number and replenishment schedule with partial backlogging. We first prove that the optimal replenishment schedule not only exists but also is unique, for any given selling price. Next, we show that the total profit is a concave function of p when the replenishment number and schedule are given. We then provide a simple algorithm to find the optimal selling price, replenishment number and replenishment timing for the proposed model. Finally, we use a couple of numerical examples to illustrate the algorithm.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Horng-Jinh Chang, Jinn-Tsair Teng, Liang-Yuh Ouyang, Chung-Yuan Dye,