Article ID: | iaor20031296 |
Country: | United Kingdom |
Volume: | 30 |
Issue: | 1 |
Start Page Number: | 35 |
End Page Number: | 50 |
Publication Date: | Jan 2003 |
Journal: | Computers and Operations Research |
Authors: | Hwang Hark, Shinn Seong Whan |
Keywords: | pricing |
This paper deals with the problem of determining the retailer's optimal price and order size simultaneously under the condition of order-size-dependent delay in payments. It is assumed that the length of the credit period is a function of the retailer's order size, and also the demand rate is a function of the selling price. We formulate two types of mathematical models from which algorithms are derived based on properties of an optimal solution. A numerical example is presented to illustrate the algorithms developed.