Joint pricing and inventory decision for competitive products
Author(s)
Ye, Kelly (Kelly Yunqing)
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Other Contributors
Massachusetts Institute of Technology. Operations Research Center.
Advisor
David Simchi-Levi.
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We consider the joint pricing and inventory decision problem for a single retailer who orders, stocks and sells multiple products. The products are competitive in nature, e.g., these maybe similar products from multiple brands. Demand for a product depends on its price as well as the price of all competing products. We show that the optimal pricing and inventory policy is similar to the base-stock, list-price policy which is known to be optimal for the single product case. In addition, the base-stock level of each product is nonincreasing with the inventory level of other products. This structure suggests that one can improve profit by simultaneously managing all the products rather than managing each product independently of other products.
Description
Thesis (S.M.)--Massachusetts Institute of Technology, Sloan School of Management, Operations Research Center, 2008. Includes bibliographical references (p. 37-38).
Date issued
2008Department
Massachusetts Institute of Technology. Operations Research Center; Sloan School of ManagementPublisher
Massachusetts Institute of Technology
Keywords
Operations Research Center.