Joint Pricing and Inventory Decisions for Constant Priced Items

Howard C. Kunreuther · Linus E. Schrage

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Supply Chain and Inventory Management Consumer Market Behavior and Pricing Optimization and Mathematical Programming

Abstract

This paper develops an algorithm for determining the pricing and ordering decisions for a firm that produces one product for which there is a deterministic demand curve that differs from period to period. It is assumed that the firm wants to maintain the same price for the product throughout the season. There is a fixed cost associated with each order placed (or alternatively, each batch produced) in addition to per unit ordering and storage costs for carrying inventory over time.

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2004Dynamic Version of the Economic Lot Size Model 1970Price-Production Decisions with Deterministic Demand 1971Optimal Pricing and Inventory Decisions for Non-Seasonal Items

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2002Coordination of joint pricing-production decisions in a supply chain 1994Flexibility and marketing/manufacturing coordination 2000A multi-period profit maximizing model for retail supply chain management: An integration of demand and supply-side mechanisms 2005Dynamic pricing of inventory/capacity with infrequent price changes 1974Technical Note—Price and Production Decisions with Random Demand 1993Chapter 18 Marketing-production joint decision-making 1995The Effects of Retailer and Consumer Response on Optimal Manufacturer Advertising and Trade Promotion Strategies 1997Determining optimal retail price and lot size under day-terms supplier credit

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