Article ID: | iaor200115 |
Country: | Netherlands |
Volume: | 120 |
Issue: | 3 |
Start Page Number: | 535 |
End Page Number: | 544 |
Publication Date: | Feb 2000 |
Journal: | European Journal of Operational Research |
Authors: | You Peng-Sheng |
Keywords: | programming: dynamic |
This paper deals with the problem of a decision maker trying to purchase a certain number of units of an item at the lowest total purchasing cost within a given number of time periods. At the beginning of every period, the decision maker must decide whether or not to pay a fee to search for a seller. Once a seller is found, he offers a price to him under the realization that the price may be rejected. Assume that a maximum of one unit of item can be purchased every period. This paper develops a dynamic model which provides decision rules that consist of pricing policies and search rules for the decision maker.