Volume 56, Number 3, May-June 2022
Recent developments of operations research and data sciences
|Page(s)||1411 - 1427|
|Published online||13 June 2022|
Pricing games of duopoly service-inventory systems with lost sales
Department of Artificial Intelligence and Software, Kangwon National University, 346 Joongang-ro, Samcheok-si, Gangwon-do 29513, Republic of Korea
2 Department of Industrial Engineering, Kangwon National University, 1 Gangwondaehakgil, Chuncheon-si, Gangwon-do 24341, Republic of Korea
* Corresponding author: email@example.com
Accepted: 6 April 2022
This study considers a duopoly market in which two competitors operate their own service-inventory systems. Both competitors determine their prices to maximize their profit while considering the inventory holding cost, ordering cost, and cost incurred by lost sales. Customers are price sensitive, and customer attractiveness is expressed by arrival rates. We use a game theory approach to formulate and analyze three types of pricing games: (i) a parallel pricing game, (ii) a sequential pricing game, and (iii) a unified pricing game. The uniqueness of equilibrium prices is analytically proven, after which, a solution procedure for obtaining equilibrium prices is outlined.
Mathematics Subject Classification: 90B22 / 90B50
Key words: Service-inventory system / lost sales / parallel pricing game / sequential pricing game / unified pricing game
© The authors. Published by EDP Sciences, ROADEF, SMAI 2022
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform.
Data correspond to usage on the plateform after 2015. The current usage metrics is available 48-96 hours after online publication and is updated daily on week days.
Initial download of the metrics may take a while.