Optimal Pricing and Production Policies of a Make-to-Stock System with Fluctuating Demand - Gestion et Conduite des Systèmes de Production Access content directly
Journal Articles Probability in the Engineering and Informational Sciences Year : 2009

Optimal Pricing and Production Policies of a Make-to-Stock System with Fluctuating Demand

Abstract

We study the effects of different pricing strategies available to a production–inventory system with capacitated supply, which operates in a fluctuating demand environment. The demand depends on the environment and on the offered price. For such systems, three plausible pricing strategies are investigated: static pricing, for which only one price is used at all times, environment-dependent pricing, for which price changes with the environment, and dynamic pricing, for which price depends on both the current environment and the stock level. The objective is to find an optimal replenishment and pricing policy under each of these strategies. This article presents some structural properties of optimal replenishment policies and a numerical study that compares the performances of these three pricing strategies.
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Dates and versions

hal-00363686 , version 1 (03-04-2024)

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Jean-Philippe Gayon, Isilay Talay-Degirmenci, F. Karaesmen, L. Örmeci. Optimal Pricing and Production Policies of a Make-to-Stock System with Fluctuating Demand. Probability in the Engineering and Informational Sciences, 2009, 23 (2), pp.205-230. ⟨10.1017/S026996480900014X⟩. ⟨hal-00363686⟩
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