Joint pricing and allocation decisions in a supply network
2019 Institute of Industrial and Systems Engineers Annual Conference and Expo, IISE 2019, Florida, Amerika Birleşik Devletleri, 18 - 21 Mayıs 2019, (Tam Metin Bildiri)
- Yayın Türü: Bildiri / Tam Metin Bildiri
- Basıldığı Şehir: Florida
- Basıldığı Ülke: Amerika Birleşik Devletleri
- Anahtar Kelimeler: Customer segmentation, Price dependent demand, Stock allocation
- Boğaziçi Üniversitesi Adresli: Evet
Özet
As product life cycles get shorter and customer markets become more segmented, an integrated analysis of decision problems become more important. The need for integrated optimization of ordering, pricing and allocation decisions is even more evident for technology intensive products and services where the customer demand, and customers’ price sensitivity highly vary over the life-cycle of the product. In this paper, we consider such a system, and build a model for finding optimal ordering, pricing an allocation decisions under random price dependent demand. Our model is applicable for a national distributor of a technology intensive product (say, for a brand of smart phones) where the market demand can be partitioned into two non-overlapping time segments. In this paper our main focus is the optimal pricing of the product and the allocation of on-hand quantity to retail stores over the secondary selling season. In our analysis, we choose to maximize the expected system-wide profit of the distributor, and sequentially decide on the amounts to be allocated to retailers, the optimal sales price, and the replenishment amount of the distributor. One of the main ingredients of our model is the modeling of the demand function, where we employ an additive-multiplicative type price dependency. We obtain near-explicit expressions for the optimal allocation amounts, the optimal centralized order quantity, and the optimal price. We investigate the behavior of the expected profit function and the order quantities with respect to various system parameters.