Market selection decisions for inventory models with price-sensitive demand

Date

2008-08-01

Author

Bakal, İsmail Serdar
Romeijn, H. Edwin

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

18
views

0
downloads

In the majority of classical inventory theory literature, demand arises from exogenous sources upon which the firm has little or no control. In many practical contexts, however, aggregate demand is comprised of individual demands from a number of distinct customers or markets. This introduces new dimensions to supply chain planning problems involving the selection of markets or customers to include in the demand portfolio. We present a nonlinear, combinatorial optimization model to address planning decisions in both deterministic and stochastic settings, where a firm constructs a demand portfolio from a set of potential markets having price-sensitive demands. We first consider a pricing strategy that dictates a single price throughout all markets and provide an efficient algorithm for maximizing total profit. We also analyze the model under a market-specific pricing policy and describe its optimal solution. An extensive computational study characterizes the effects of key system parameters on the optimal value of expected profit, and provides some interesting insights on how a given market's characteristics can affect optimal pricing decisions in other markets.

Subject Keywords

Economic order quantity, Newsvendor problem, Market selection, Pricing

URI

https://hdl.handle.net/11511/34744

Journal

JOURNAL OF GLOBAL OPTIMIZATION

DOI

https://doi.org/10.1007/s10898-007-9269-3

Collections

Department of Industrial Engineering, Article

Suggestions

OpenMETU
Core

Value of disruption information in an EOQ environment Bakal, İsmail Serdar; Bayındır, Zeynep Pelin (2017-12-01) We consider an infinite horizon, continuous review inventory model with deterministic stationary demand where supply is subject to disruption. The supply process alternates between two states randomly: one in which it functions normally (ON-period) and one in which it is disrupted (OFF-period). In this setting, we seek the value of disruption information which enables the buyer to place "disruption orders" at the beginning of OFF-periods. Utilizing renewal theory, we derive the total expected cost and chara...
Bir Savunma Sanayi Şirketinde Malzeme Envanter Yönetim Sisteminin Yeniden Tasarlanması Karabaş, Tolga; Meral, Fatma Sedef; Özdemir, Rüstem Ozan; Nartok, Yusuf Mahir; Karaaslan, Mert (2017-12-01) Bu çalışmada, bir savunma sanayi şirketindeki satın alınan malzemelerin envanter yönetim sistemi ve bu sistemdeki problemler ele alınmıştır. Proje kapsamında ilgilenilen sistem, malzeme taleplerinin açılmasından malzemelerin üretim atölyelerine aktarılmasına kadar geçen süreçleri içermektedir. Uygun zamanda ve miktarda tedarik edilen malzemeler, sözleşme üzerine üretim yapan şirket için hayati önem arz etmekte ve tedarikteki olası gecikmeler şirket için prestij kaybının yanı sıra büyük maddi yük oluşturabil...
Quantity Flexibility for Multiple Products in a Decentralized Supply Chain Bakal, İsmail Serdar (2010-09-03) One of the major complicating factors in decentralized supply chains is the long procurement/manufacturing lead times, which forces the upstream members to commit resources to production based on forecasted demand. Downstream members (the retailer for the rest of the manuscript) would like to have a higher production quantity to be able to satisfy the demand whereas upstream members (the manufacturer for the rest of the manuscript) would like to have some sort of assurance about the demand so that they will...
Product design, semantics and emotional response Demirbilek, Oya; Şener Pedgley, Bahar (Informa UK Limited, 2003-10-20) This paper explores theoretical issues in ergonomics related to semantics and the emotional content of design. The aim is to find answers to the following questions: how to design products triggering 'happiness' in one's mind; which product attributes help in the communication of positive emotions; and finally, how to evoke such emotions through a product. In other words, this is an investigation of the 'meaning' that could be designed into a product in order to 'communicate' with the user at an emotional l...
The Nature of financial innovations : a post-Schumpeterian analysis Bulgurluoğlu, Pelin; Akdere, Çınla; Department of Economics (2013) This thesis analyzes the nature of financial innovations by taking a post-Schumpeterian approach. The aim of this thesis is to show that Schumpeter’s analysis of entrepreneurial innovation, which takes place in the real economy, proposes also a theoretical framework for understanding the dynamics of financial innovations. Therefore, it suggests that Schumpeterian notion of innovation can be used as a guide in analyzing the dynamics of financial innovations today. In this respect, through the analysis of fin...

Citation Formats

İ. S. Bakal and H. E. Romeijn, “Market selection decisions for inventory models with price-sensitive demand,” JOURNAL OF GLOBAL OPTIMIZATION, pp. 633–657, 2008, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/34744.