Pricing and Inventory Control for a Perishable Product
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.
perishable, pricing and inventory control
Operations and Supply Chain Management
Manufacturing and Service Operations Management
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. Research Collection Lee Kong Chian School Of Business.
Available at: http://ink.library.smu.edu.sg/lkcsb_research/1820