Abstract
In this paper, we establish a new preservation property of quasi-K-concavity under certain optimization operations. One important application of the result is to analyze joint inventory-pricing models for single-product periodic-review inventory systems with concave ordering costs. At each period, an ordering quantity and a selling price of the product are determined simultaneously. Demand is random but sensitive to the price. The objective is to maximize the total expected discounted profit over a finite planning horizon. Assuming that demand is a deterministic function of the selling price plus a random perturbation with a positive Pólya or uniform distribution, we show that a generalized (s,S,p) policy is optimal.
Original language | English (US) |
---|---|
Pages (from-to) | 1012-1016 |
Number of pages | 5 |
Journal | Operations Research |
Volume | 58 |
Issue number | 4 PART 1 |
DOIs | |
State | Published - Jul 2010 |
Keywords
- Concave ordering cost
- Inventory control
- Optimal policy
- Pricing
- Quasi-K-concavity
ASJC Scopus subject areas
- Computer Science Applications
- Management Science and Operations Research