Pricing and the Newsvendor Problem: A Review with Extensions

Operations Research - Tập 47 Số 2 - Trang 183-194 - 1999
Nicholas C. Petruzzi1, Maqbool Dada2
1University of Illinois, Champaign, Illinois,
2Purdue University, West Lafayette, Indiana

Tóm tắt

In the newsvendor problem, a decision maker facing random demand for a perishable product decides how much of it to stock for a single selling period. This simple problem with its intuitively appealing solution is a crucial building block of stochastic inventory theory, which comprises a vast literature focusing on operational efficiency. Typically in this literature, market parameters such as demand and selling price are exogenous. However, incorporating these factors into the model can provide an excellent vehicle for examining how operational problems interact with marketing issues to influence decision making at the firm level. In this paper we examine an extension of the newsvendor problem in which stocking quantity and selling price are set simultaneously. We provide a comprehensive review that synthesizes existing results for the single period problem and develop additional results to enrich the existing knowledge base. We also review and develop insight into a dynamic inventory extension of this problem, and motivate the applicability of such models.

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Thông tin xuất bản

Operations Research

Tập 47 Số 2

183-194

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