Optimality of (s, S) -policies in a dynamic pricing model with replenishment opportunities: A sample path approach

Jian Li; Xiaowei Xu

doi:10.1016/j.orl.2013.10.003

Optimality of (s, S) -policies in a dynamic pricing model with replenishment opportunities: A sample path approach

Jian Li, Xiaowei Xu

Rutgers Business School, Supply Chain Management

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

This paper studies discrete-time inventory replenishment decisions in a continuous-time dynamic-pricing setting where customer arrivals follow a non-homogeneous Poisson process. Each replenishment order incurs a linear variable cost and a fixed cost. Using a novel sample-path approach, we prove that the optimal inventory policy in the presence of dynamic pricing is of (s,S)-type.

Original language	English (US)
Pages (from-to)	719-725
Number of pages	7
Journal	Operations Research Letters
Volume	41
Issue number	6
DOIs	https://doi.org/10.1016/j.orl.2013.10.003
State	Published - 2013

All Science Journal Classification (ASJC) codes

Software
Management Science and Operations Research
Industrial and Manufacturing Engineering
Applied Mathematics

Keywords

(s, S) -policy
Dynamic pricing
K-concavity
Sample path method

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10.1016/j.orl.2013.10.003

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abstract = "This paper studies discrete-time inventory replenishment decisions in a continuous-time dynamic-pricing setting where customer arrivals follow a non-homogeneous Poisson process. Each replenishment order incurs a linear variable cost and a fixed cost. Using a novel sample-path approach, we prove that the optimal inventory policy in the presence of dynamic pricing is of (s,S)-type.",

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AU - Xu, Xiaowei

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AB - This paper studies discrete-time inventory replenishment decisions in a continuous-time dynamic-pricing setting where customer arrivals follow a non-homogeneous Poisson process. Each replenishment order incurs a linear variable cost and a fixed cost. Using a novel sample-path approach, we prove that the optimal inventory policy in the presence of dynamic pricing is of (s,S)-type.

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KW - Dynamic pricing

KW - K-concavity

KW - Sample path method

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ER -

Optimality of (s, S) -policies in a dynamic pricing model with replenishment opportunities: A sample path approach

Abstract

All Science Journal Classification (ASJC) codes

Keywords

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