Browsing by Subject "Pricing--Decision making."
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Item Open Access A dynamic pricing policy for perishables with stochastic demand(Bilkent University, 2001) Yıldırım, GoncaIII this study, we consider the pricing of perishables in an inventory system where items have a fixi'd lifetime. Unit demands come from a Poisson Process with a price-dependent rate. The instances at which an item is withdrawn from inventory due to demand constitute decision epochs for setting the sales price; the time elapsed between two such consecutive instances is called a period. The sales price at each decision epoch is taken to be a lunction of Tj denoting the remaining lifetime when tin' inventory level drops to z, i = 1,...,Q. The objective is to determine the optimal pricing policy (under the proposed class) and the optimal initial stocking level to maximize the discounted expected profit. A Dynamic Programming approach is used the solve the problem numerically. Using the backward recursion, the optimal price paths are determined for the discounted expected profit for various combinations of remaining lifetimes. Our numerical studies indicate that a single price policy results in significantly lower profits when compared with our formulation.Item Open Access A joint pricing and replenishment policy for perishable products with fixed shelf life and positive lead times(Bilkent University, 2009) Bayramoğlu, KönülMost of the existing inventory models in the literature are based on the assumption that the items have infinite shelf life and do not deteriorate no matter how long they stay on the shelf. However this assumption may not be applicable in many situations since there are also many types of products with limited shelf lives. In the inventory literature stored items with fixed finite lifetimes are usually referred to as perishable items. Examples of perishable products include fresh foods, medical products, whole-blood units, packaged chemical products and photographic films. In this study, we consider the joint pricing and ordering policy, (Q, r, P1, P2), for an inventory model with perishable items, with constant shelf lives and positive lead times. The demand process is assumed to be Poisson. If there is a single batch on hand, the items in a batch are sold at price P1. If there are two batches in stock, the items in the older batch are sold at price P2, where P1 > P2. The younger batch is not sold until the older one is totally depleted. Although the shelf lives are constant, the sequence of remaining shelf lives of the items at the instances where stock level hits Q, is a random sequence. The limiting distribution of this sequence is obtained and the analytical derivations of the operating characteristics of the model is based on this limiting distribution. Numerical results are also presented.Item Open Access Order quantity and pricing decisions in linear cost inventory systems(Bilkent University, 1992) Polatoglu, Lutfi HakanThe primary concern of this study is to reveal the fundamental characteristics of the linear cost inventory model where price is a decision variable in addition to procurement quantity. In this context, the optimal solution must not only strike a balance between leftovers and shortages, but also simultaneously search for the best pricing alternative within the low price high demand and high price low demand tradeoff. To some extent, this problem has been studied in the literature. However, it seems that, there is a need to improve the model in order to understand the decision process better. To this end, optimal decisions must be characterised under a more general problem setting than it has been assumed in the existing models. In this study, we employ such a general model. The overall decision problem can be formulated under a dynamic programming structure. It follows that, the single period model is the basis of this periodic decision model. For this reason, we concentrate first on this problem. Having characterised the optimal solution to this basic model we extend the decision model to account for the multi-period setting. It is established with the results of this study that the decision problem in question is understood better. It is found that the characteristics of the optimal decision under the proposed model can be substantially different from the properties of the optimal solution of the corresponding classical model where there is no pricing decision. The primary reason for this is the fact that when there is a shortage in any period, the price that is set in this period could affect the future revenue which must be accounted in the overall decision problem. That is in a general model, price is an information which has an economic value that is transferred from one period to another just like transfering inventories or backlogs to future periods.