Article ID: | iaor2007555 |
Country: | Netherlands |
Volume: | 34 |
Issue: | 5 |
Start Page Number: | 517 |
End Page Number: | 524 |
Publication Date: | Sep 2006 |
Journal: | Operations Research Letters |
Authors: | Zhang Ju-Liang, Chen Jian |
Keywords: | stochastic processes |
This paper addresses the simultaneous determination of pricing and inventory control with learning. The Bayesian formulation of this model results in a dynamic program with a multi-dimension state-space. We show that the state-space of the Bayesian model can be reduced under some conditions and characterize the structure of the optimal policy.