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Joint dynamic pricing and inventory control strategy with expediting replenishment decisions. (Chinese. English summary) Zbl 1363.90009
Summary: We analyze a joint dynamic pricing and inventory control problem for products with limited supply over a finite horizon. In this paper, we study inventory replenishment strategy with regular and expediting. Firstly, we develop dynamic programming model on fixed cost of expediting. Based on \((s, S)\) strategy, the optimal replenishment policy is a modified base-stock policy. Secondly, we propose an intuitive heuristic policy to tackle the general system whose optimal policy is expected to be very complicated. Finally, this heuristic policy performs well. Numerical studies show that retailer’s profit is higher with expediting. Under the condition of no stockouts, the higher initial inventory is, the higher retailer’s profit is.
90B05 Inventory, storage, reservoirs
91B25 Asset pricing models (MSC2010)
90C39 Dynamic programming
90C59 Approximation methods and heuristics in mathematical programming