Pricing and Inventory Control for a Perishable Product
Publication Type
Journal Article
Publication Date
6-2009
Abstract
In this note, we study the concurrent determination of pricing and inventory replenishment decisions for a perishable product in an infinite horizon. Demands in consecutive periods are independent and influenced by prices charged in each period. In particular, we treat price as a decision variable to maximize the total discounted profit. We analyze the optimal solution-structure of a two-period lifetime problem and from insights gained in numerical experiments, develop a base-stock/list-price heuristic policy for products with arbitrary fixed lifetimes. Experiments show this policy to be effective.
Keywords
perishable, pricing and inventory control
Discipline
Operations and Supply Chain Management
Research Areas
Operations Management
Publication
Manufacturing and Service Operations Management
Volume
11
Issue
3
First Page
538
Last Page
542
ISSN
1523-4614
Identifier
10.1287/msom.1080.0238
Publisher
INFORMS
Citation
LI, Yanzhi; LIM, Andrew; and RODRIGUES, Brian.
Pricing and Inventory Control for a Perishable Product. (2009). Manufacturing and Service Operations Management. 11, (3), 538-542.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/1820
Additional URL
https://doi.org/10.1287/msom.1080.0238