(s, S) Optimality in Joint Inventory-Pricing Control: An Alternate Approach Online Appendices
نویسندگان
چکیده
Theorem A.1. If Condition 1 holds and K = 0, then, the optimal ordering policy for the finite horizon problem or the infinite horizon discounted profit problem has the following structure. If xt < y ∗, then order up to y∗, and set the sales lever to d∗. Otherwise, do not order. Proof. By Theorem 6.1 of Porteus (2002), it is easy to verify that (y∗,d∗) is the optimal action pair if xt < y∗. If xt ≥ y∗, it is optimal not to order by Corollary 3.3. Remark. We make the following two remarks on Theorem A.1: (a) If xt ≤ y∗, then the myopic policy is optimal; (b) Theorem A.1 does not specify the optimal sales lever dt in period t for xt > y∗. This computation can be efficiently performed as follows.
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Electronic Companion — “ s S Optimality in Joint Inventory - Pricing Control : An Alternate Approach
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