Dynamic inventory and pricing policy in a capacitated stochastic inventory system with fixed ordering cost

Dynamic inventory and pricing policy in a capacitated stochastic inventory system with fixed ordering cost

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Article ID: iaor20121922
Volume: 40
Issue: 2
Start Page Number: 99
End Page Number: 107
Publication Date: Mar 2012
Journal: Operations Research Letters
Authors: , ,
Keywords: combinatorial optimization, programming: dynamic, inventory: order policies
Abstract:

We study a dynamic inventory and pricing optimization problem in a periodic review inventory system with setup cost and finite ordering capacity in each period. We show that the optimal inventory control is characterized by an ( s , s ' , p ) equ1 policy in four regions of the starting inventory level.

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