Upgrade and Advance Selling for Inventory Systems with Delivery Time Options

Project: Research

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Motivated by our collaboration with Toyota China and Honda China, we study a periodic review inventory management problem for companies that provide delivery time options to their customers. Customers are classified into two groups: short lead-time customers (impatient) who require the product immediately and long lead-time (patient) customers who allow the flexibility in. delivery time. Our field studies find that automobile dealerships with popular models are good examples of such a business e1wironment, and upgrade and advance selling arc typical tactics for dealerships. We plan to model upgrade and advance selling for inventory systems with deliver time options. With exploring dynamic programming equations, we plan to develop the optimal inventory control policies. At the same time, with optimal inventory control. policies on hands, we explore (further the impact of customer's reaction to deliver time options and consumption uncertainties. We also plan to extend our empirical studies and seek for possible implementation of our findings in a simplified version at one of Toyota dealerships.


Project number7200290
Effective start/end date1/03/1230/05/14