Coordinated pricing and order-up-to level for a perishable item with price and stock-dependent demand

Liang Tu Chen, Mei Chen Chien, Jen Ming Chen

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

We consider a retailer who sells a perishable item that is subject to the effect of fixed lifetime, facing a price and stock-level dependent demand rate under the last-in-first-out issuing policy. Our model is a generalized version of the previous work by considering the selling price as a decision variable and taking net discount rate of inflation into account for the newsboy problem. The objective of the model is to jointly determine the optimal selling price, base-stock level, and inventory cycle over infinite planning horizon so that the present worth of the net profit per unit time is maximized. Numerical results reveal that the pricing scheme is a more effective mechanism than the inventory control mechanism in the present worth of profit maximization.

Original languageEnglish
Title of host publicationProceedings of the 35th International Conference on Computers and Industrial Engineering, ICC and IE 2005
Pages435-440
Number of pages6
StatePublished - 2005
Event35th International Conference on Computers and Industrial Engineering, ICC and IE 2005 - Istanbul, Turkey
Duration: 19 Jun 200522 Jun 2005

Publication series

NameProceedings of the 35th International Conference on Computers and Industrial Engineering, ICC and IE 2005

Conference

Conference35th International Conference on Computers and Industrial Engineering, ICC and IE 2005
Country/TerritoryTurkey
CityIstanbul
Period19/06/0522/06/05

Keywords

  • Base-stock
  • Fixed lifetime
  • Net discount rate of inflation
  • Pricing

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