TY - JOUR
T1 - Optimal pricing and production lot-sizing for seasonal products over a finite horizon
AU - Saha, Subrata
AU - Das, Sambhu
AU - Basu, Manjusri
PY - 2010/8/1
Y1 - 2010/8/1
N2 - In day-to-day time-based competition, the unit selling price of a high-tech product declines significantly over its short life cycle. In this paper, we introduce dynamic pricing to traditional Economic production quantity (EPQ) models for time and price sensitive products. From manufacturer/producer point of view, the model is developed to maximise total profit. We prove that the total profit is a concave function of selling price within fixed planning horizon. A solution procedure is presented to determine optimal prices, optimal number of production cycles, optimal lot size and optimal profit simultaneously.We illustrate the model with numerical examples and sensitivity analysis is also performed.
AB - In day-to-day time-based competition, the unit selling price of a high-tech product declines significantly over its short life cycle. In this paper, we introduce dynamic pricing to traditional Economic production quantity (EPQ) models for time and price sensitive products. From manufacturer/producer point of view, the model is developed to maximise total profit. We prove that the total profit is a concave function of selling price within fixed planning horizon. A solution procedure is presented to determine optimal prices, optimal number of production cycles, optimal lot size and optimal profit simultaneously.We illustrate the model with numerical examples and sensitivity analysis is also performed.
KW - Pricing
KW - Production/inventory
KW - Time-varying and price dependent demand
UR - http://www.scopus.com/inward/record.url?scp=84857277838&partnerID=8YFLogxK
U2 - 10.1504/IJMOR.2010.034340
DO - 10.1504/IJMOR.2010.034340
M3 - Journal article
AN - SCOPUS:84857277838
SN - 1757-5850
VL - 2
SP - 540
EP - 553
JO - International Journal of Mathematics in Operational Research
JF - International Journal of Mathematics in Operational Research
IS - 5
ER -