An Elasticity Approach to the Newsvendor with Price Sensitive Demand

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dc.citation.epage312en_US
dc.citation.issueNumber2en_US
dc.citation.spage301en_US
dc.citation.volumeNumber59en_US
dc.contributor.authorKocabiyikoglu, A.en_US
dc.contributor.authorPopescu, I.en_US
dc.date.accessioned2015-07-28T11:59:40Z
dc.date.available2015-07-28T11:59:40Z
dc.date.issued2011-04en_US
dc.departmentDepartment of Managementen_US
dc.description.abstractWe introduce a measure of elasticity of stochastic demand, called the elasticity of the lost-sales rate, which offers a unifying perspective on the well-known newsvendor with pricing problem. This new concept provides a framework to characterize structural results for coordinated and uncoordinated pricing and inventory strategies. Concavity and submodularity of the profit function, as well as sensitivity properties of the optimal inventory and price policies, are characterized by monotonicity conditions, or bounds, on the elasticity of the lost-sales rate. These elasticity conditions are satisfied by most relevant demand models in the marketing and operations literature. Our results unify and complement previous work on price-setting newsvendor models and provide a new tool for researchers modeling stochastic price-sensitive demand in other contexts.en_US
dc.identifier.doi10.1287/opre.1100.0890en_US
dc.identifier.issn0030-364X
dc.identifier.urihttp://hdl.handle.net/11693/12011
dc.language.isoEnglishen_US
dc.publisherINFORMSen_US
dc.relation.isversionofhttp://dx.doi.org/10.1287/opre.1100.0890en_US
dc.source.titleOperations Researchen_US
dc.subjectCoordinationen_US
dc.subjectEconomicsen_US
dc.subjectInventory/productionen_US
dc.subjectMarketingen_US
dc.subjectMonopoly Under Uncertaintyen_US
dc.subjectNewsvendor Problem With Pricingen_US
dc.subjectRicingen_US
dc.titleAn Elasticity Approach to the Newsvendor with Price Sensitive Demanden_US
dc.typeArticleen_US

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