Title

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

Additional URL

http://dx.doi.org/10.1287/msom.1080.0238