Newsboy Problem: Viability of Optimal Initial Selling Price and Ordering Policies in the Presence of Exogenous Price Decline and Random Lead Time

Ningombam Sanjib Meitei; Snigdha Banerjee

RAIRO - Operations Research - Recherche Opérationnelle (2013)

  • Volume: 47, Issue: 4, page 371-394
  • ISSN: 0399-0559

Abstract

top
Analysis of empirical sales data lead us to consider newsboy model for four practical market conditions arising from the presence/absence of stochastic lead time and exogenous linear temporal decline in selling price when distribution of the stochastic demand depends upon initial selling price. Viability of the solutions is discussed for three strategies of obtaining optimal initial selling price and/or ordering quantity. Numerical studies are conducted to assess the effects of lead time and price decline.

How to cite

top

Meitei, Ningombam Sanjib, and Banerjee, Snigdha. "Newsboy Problem: Viability of Optimal Initial Selling Price and Ordering Policies in the Presence of Exogenous Price Decline and Random Lead Time." RAIRO - Operations Research - Recherche Opérationnelle 47.4 (2013): 371-394. <http://eudml.org/doc/275062>.

@article{Meitei2013,
abstract = {Analysis of empirical sales data lead us to consider newsboy model for four practical market conditions arising from the presence/absence of stochastic lead time and exogenous linear temporal decline in selling price when distribution of the stochastic demand depends upon initial selling price. Viability of the solutions is discussed for three strategies of obtaining optimal initial selling price and/or ordering quantity. Numerical studies are conducted to assess the effects of lead time and price decline.},
author = {Meitei, Ningombam Sanjib, Banerjee, Snigdha},
journal = {RAIRO - Operations Research - Recherche Opérationnelle},
keywords = {stochastic lead-time; exogenous price decline; pricing; initial selling price; viable policies},
language = {eng},
number = {4},
pages = {371-394},
publisher = {EDP-Sciences},
title = {Newsboy Problem: Viability of Optimal Initial Selling Price and Ordering Policies in the Presence of Exogenous Price Decline and Random Lead Time},
url = {http://eudml.org/doc/275062},
volume = {47},
year = {2013},
}

TY - JOUR
AU - Meitei, Ningombam Sanjib
AU - Banerjee, Snigdha
TI - Newsboy Problem: Viability of Optimal Initial Selling Price and Ordering Policies in the Presence of Exogenous Price Decline and Random Lead Time
JO - RAIRO - Operations Research - Recherche Opérationnelle
PY - 2013
PB - EDP-Sciences
VL - 47
IS - 4
SP - 371
EP - 394
AB - Analysis of empirical sales data lead us to consider newsboy model for four practical market conditions arising from the presence/absence of stochastic lead time and exogenous linear temporal decline in selling price when distribution of the stochastic demand depends upon initial selling price. Viability of the solutions is discussed for three strategies of obtaining optimal initial selling price and/or ordering quantity. Numerical studies are conducted to assess the effects of lead time and price decline.
LA - eng
KW - stochastic lead-time; exogenous price decline; pricing; initial selling price; viable policies
UR - http://eudml.org/doc/275062
ER -

References

top
  1. [1] K. Arrow, T. Harris and J. Marschak, Optim. Inventory Policy. Econometrica19 (1951) 250–272. Zbl0045.23205MR44094
  2. [2] T.M. Within, Inventory control and price theory. Mgmt. Sci. 2 (1955) 61–68. 
  3. [3] A. Lau and H.S. Lau, The newsboy problem with price dependent demand distribution. IIE Trans.20 (1988) 168–175. 
  4. [4] M.J. Khouja, Optimal ordering, discounting and pricing in the single period problem. Itnl J. Prod.Eco.66 (2000) 201–216. 
  5. [5] M. Khouja, The newsboy problem under progressive multiple discounts. Eur. J. Oper. Res.84 (1995) 458–466. Zbl0909.90134
  6. [6] M. Khouja, The single-period (news-vendor) problem: literature review and suggestions for future research. Omega27 (1999) 537–553. 
  7. [7] W. Elmaghraby and P. Keskinocak, Dynamic Pricing in the Presence of Inventory Considerations: Research Overview, Current Practices, and Future Directions, Mgmt. Sci. 49 (2003) 1287–1309. Zbl1232.90042
  8. [8] S. Banerjee and N.S. Meitei, Effect of declining selling price: profit analysis for a single period inventory model with stochastic demand and lead time. J. Oper. Res. Soc.61 (2010) 696–704. Zbl1230.90011
  9. [9] L.H. Polatoglu, Optimal order quantity and pricing decisions in single-period inventory systems. Intl. J. Prod. Eco.23 (1991) 175–185. 
  10. [10] N.C. Petruzzi and M. Dada, Pricing and the newsvendor problem: a review with extensions. Oper. Res.47 (1999) 183–94. Zbl1005.90546
  11. [11] S. Yang, C.V. Shi and X. Zhao, Optimal ordering and pricing decisions for a target oriented newsvendor. Omega39 (2011) 110–115. 
  12. [12] G.S. Bitran and V. Mondschein, Periodic pricing of seasonal products in retailing. Mgmt. Sci.43 (1997) 64–79. Zbl0888.90026
  13. [13] The New York times, 5 February 1922, http://query.nytimes.com/mem/archive-free/pdf?˙r=1&res=9D05EED71130EE3ABC4D53DFB4668389639EDE. 
  14. [14] http://www.hindustantimes.com/, NEW DELHI/INDORE edition, Page 3, 3rd column, 2nd row on 1st August 2011). 
  15. [15] V. Shankar, R.N. Bolton, An Empirical Analysis of Determinants of Retailer Pricing Strategy. Marketing Sci.23 (2004) 28–49. 
  16. [16] http://www.mobilehandsetdesignline.com/showArticle.jhtml?articleID=208801082&queryText=cmp. 
  17. [17] http://www.dhadkanofindia.com/1500-iphones-got-sold-in-first-week-in-india/ 
  18. [18] http://www.telegraphindia.com/1090922/jsp/business/story˙11526412.jsp 
  19. [19] http://www.wired.com/gadgetlab/2008/09/apple-stumbles/ 
  20. [20] A. Lau, H.S. Lau, Effects of a demand-curve’s shape on the optimal solutions of a multi-echelon inventory/pricing model. Eur. J. Oper. Res.147 (2003) 530–548. Zbl1026.90002MR1965254
  21. [21] http://hbswk.hbs.edu/archive/5314.html 

NotesEmbed ?

top

You must be logged in to post comments.

To embed these notes on your page include the following JavaScript code on your page where you want the notes to appear.

Only the controls for the widget will be shown in your chosen language. Notes will be shown in their authored language.

Tells the widget how many notes to show per page. You can cycle through additional notes using the next and previous controls.

    
                

                
Note: Best practice suggests putting the JavaScript code just before the closing </body> tag.