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. ©2009 INFORMS.
| Original language | English |
|---|---|
| Pages (from-to) | 538-542 |
| Journal | Manufacturing and Service Operations Management |
| Volume | 11 |
| Issue number | 3 |
| DOIs | |
| Publication status | Published - Jun 2009 |
Research Keywords
- Perishable
- Pricing and inventory control
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