Optimal pricing for selling to a static multi-period newsvendor

Xiao Alison Chen, Zizhuo Wang, Hongsong Yuan

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

This paper considers a multi-period supply chain model in which a supplier sells to a multi-period newsvendor. Such a problem is relevant in industries with long production lead times. We study the optimal pricing problem for the supplier. We derive procedures for solving the optimal prices and show that the optimal pricing sequence is decreasing in time. We also show that the optimal prices are increasing in the backorder cost when the cumulative demand functions have increasing generalized failure rates.

Original languageEnglish (US)
Pages (from-to)415-420
Number of pages6
JournalOperations Research Letters
Volume45
Issue number5
DOIs
StatePublished - Sep 2017

Keywords

  • Newsvendor
  • Pricing
  • Supply chain management

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