Revenue management with costly price adjustments

Revenue management with costly price adjustments

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Article ID: iaor200971638
Country: United States
Volume: 57
Issue: 5
Start Page Number: 1206
End Page Number: 1219
Publication Date: Sep 2009
Journal: Operations Research
Authors: , ,
Keywords: inventory
Abstract:

We consider a novel variant of the perishable inventory profit management problem faced by a firm that sells a fixed inventory over a finite horizon in the presence of price-adjustment costs. In economics literature, such price-adjustment costs are widely studied and are typically assumed to include a fixed component (e.g., advertising costs), an inventory-dependent component (e.g., inventory relabeling costs), as well as a component that depends on the magnitude of the price adjustment (e.g., cognitive and coordination managerial costs).

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