Volume 47, Number 4, September-December 2013ROADEF 2012
|Page(s)||371 - 394|
|Published online||29 November 2013|
Newsboy Problem: Viability of Optimal Initial Selling Price and Ordering Policies in the Presence of Exogenous Price Decline and Random Lead Time
Accepted: 17 September 2013
Analysis of empirical sales data lead us to consider newsboy model for four practical market conditions arising from the presence/absence of stochastic lead time and exogenous linear temporal decline in selling price when distribution of the stochastic demand depends upon initial selling price. Viability of the solutions is discussed for three strategies of obtaining optimal initial selling price and/or ordering quantity. Numerical studies are conducted to assess the effects of lead time and price decline.
Mathematics Subject Classification: 91B24
Key words: Stochastic lead-time / exogenous price decline / pricing / initial selling price / viable policies
© EDP Sciences, ROADEF, SMAI 2013
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