Pricing and Inventory Management

Xin Chen, David Simchi-Levi

Research output: Chapter in Book/Report/Conference proceedingChapter


This article surveys academic research on price optimization models in which inventory replenishment plays a critical role. The emphasis is on integrated production/inventory and pricing models with the potential to be used for decision support at both the operational and the tactical levels. The article also reviews strategic models on supply chain competition, coordination, and cooperation built upon these operational and tactical inventory and pricing models. It is organized as follows. The article presents commonly used demand models, which is followed by a survey of deterministic periodic review inventory and pricing models. It then presents stochastic models distinguishing between single period models, multi-period models with convex ordering costs, and multi-period models with concave ordering costs. Built upon the inventory and pricing models presented in the previous sections, the article reviews models on supply chain competition, coordination, and cooperation. Finally, it provides some concluding remarks and thoughts on future research.

Original languageEnglish (US)
Title of host publicationThe Oxford Handbook of Pricing Management
PublisherOxford University Press
ISBN (Electronic)9780191750564
ISBN (Print)9780199543175
StatePublished - Nov 21 2012


  • Demand models
  • Inventory models
  • Inventory replenishment
  • Price optimization models
  • Pricing models
  • Stochastic models

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance


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