Dynamic programming has been used to solve numerous complex problems in business and engineering. This study applies dynamic programming to a retail decision-making problem related to trade credit. A price, shelf-space, and time-dependent demand function is introduced to model the finite time horizon inventory. Trade credit was considered in the model because suppliers commonly provide retailer...

This paper solves for the profit maximising strategy of a durable–goods monopolist when incoming demand varies over time. Each period, additional consumers enter the market; these consumers can then choose whether and when to purchase. We first characterise the consumer’s utility maximisation problem and, under a monotonicity condition, show the profit maximising allocation can be solved throug...

We consider a price-setting newsvendor problem with partial information. The newsvendor does not know the price-dependent probability distribution of demand, but is able to estimate lower and upper limits of the market size and consumer willingness-to-pay. The objective is to minimize the maximum loss in expected profit, or minimax regret. We derive closed-form expressions for optimal quantity ...

Coupons in the form of “promotion codes” are now a mainstay of the online shopping experience, but online coupon redemption differs substantively from that in traditional retailing. Generally, offline redemption of coupons is customer-initiated while Internet shoppers are usually prompted to enter a code towards the conclusion of the checkout process. Some controversy exists over the effect thi...

 Joint Optimization of Assortment Selection and Pricing under the Capacitated Multinomial Logit Choice Model with Product-Differentiated Price Sensitivities Ruxian Wang HP Laboratories HPL-2012-207 Multinomial Logit model; assortment optimization; multi-product price optimization Many firms face a problem to select an assortment of products and determine their prices to maximize the total prof...

This paper develops a method for nodal pricing and market clearing mechanism considering reliability of the system. The effects of components reliability on electricity price, market participants’ profit and system social welfare is considered. This paper considers reliability both for evaluation of market participant’s optimality as well as for fair pricing and market clearing mechanism. To ac...

Changes in production cost always lead to changes in wholesale and retail price. How to adjust the wholesale price, retail price and order quantity in order to derive an optimal strategy for the supplier and the retailer is one of the most perplexing problems. The purpose of this study is to develop a strategy to maximize the expected profit by simultaneously determining the adjustment ratio o...

This research considers a fresh-product supply chain consisting of a single-buyer, a single-supplier for deteriorating products where the market demand is dependent on the retail price, fresh rate, and remaining rate. Firstly, in a competitive model, the primary decision variables (i.e., the supplier's wholesale price and preservation-technology investment and also buyer's order quantity and re...

Most analysis of market power assumes that managers are perfect agents for shareholders. This paper relaxes that assumption. When managers of a multi-product firm exert unobservable effort to improve product quality, price coordination incentives tradeoff with effort incentives. This makes some intra-firm price competition optimal, explaining why many multi-product firms allow for competition b...