A firm facing price dependent stochastic demand aims to maximize its total expected profit over a planning horizon. In addition to the regular unit selling price, the firm can utilize quantity discounts to increase sales. We refer to this dual-pricing strategy as quantity-based price differentiation. At the beginning of each period, the firm needs to make three decisions: replenish the inventor...

Demand estimation is important for new-product strategies, but is challenging in the absence of actual sales data. We develop a cost-effective method to estimate the demand of new products based on choice experiments. Our premise is that there exists a structural relationship between manifested demand and the probability of consumer choice being realized. We illustrate the mechanism using a the...

This article presents a review of the issues associated with a manufacturer’s pricing strategies in a twoechelon supply chain that comprises one manufacturer and two competing retailers, with warranty period-dependent demands. The manufacturer, as a Stackelberg leader, specifies wholesale prices to two competing retailers who face warranty period-dependent demand and have different sales costs....

This paper studies the impact of a manufacturer-hired sales agent on a supply chain comprising a manufacturer and a retailer. The sales agent is working mainly at the retailer’s location in order to boost the demand. We focus on a wholesale price contract, under which the retailer decides how much to order from the manufacturer. The information structure within the supply chain and the efficien...

In this paper we study the capacity investment decision for make-to-order manufacturing firms that utilize a fixed capacity, operate in a stochastic, stationary market, and can influence their demand rate by increasing or decreasing their sales effort. We consider manufacturing situations that differ in sales contribution, in market elasticity to sales effort, work-in-process costs, and demand ...

We present a planning model for chemical commodities related to an industry case. Commodities are standard chemicals characterized by sales and supply volatility in volume and value. Increasing and volatile prices of crude oil-dependent raw materials require coordination of sales and supply decisions by volume and value throughout the value chain to ensure profitability. Contract and spot deman...

Channel rebates and returns policies are common mechanisms for manufacturers to entice retailers to increase their order quantities and sales ultimately. However, when the underlying demand depends on the retail price, it has been known that channel coordination cannot be achieved if only one of these mechanisms is deployed. In this paper, we show that a policy that combines the use of wholesal...

This paper focuses on formulating capacity-price trade off problem in Yield Management for manufactur-ing industry by drawing motivation from the remarkable success of Yield Management (YM) implementation in airlines. In the current practice, there is no alternative and procedure for the manufacturer, as well as cus-tomers to take advantage of using the unfulfilled capacity in discounted offers...

In recent years researchers have begun exploring the relationships between the real estate market and other related markets. For example, Case and Shiller (1990) find that price changes and excess returns of single-family housing can be predicted by a number of information variables. Using the Granger equilibrium model Goebel and Ma (1993) find that mortgage rates and general interest rates are...