Integration of inventory and pricing decisions with costly price adjustments

Operations Research

Volumn 59, Issue 5, 2011, Pages 1144-1158

  Chen, Xin ^a   Zhou, Sean X ^b   Chen, Youhua Frank ^b  

^a UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

^b CHINESE UNIVERSITY OF HONG KONG   (Hong Kong)

Author keywords

[No Author keywords available]

Indexed keywords

BASE STOCK; DISCOUNTED PROFIT; DYNAMIC PRICING; EMPIRICAL EVIDENCE; FINITE PLANNING HORIZON; FIXED COST; GENERAL MODEL; HEURISTIC POLICIES; INVENTORY MODELS; INVENTORY REPLENISHMENT; INVENTORY SYSTEMS; NUMERICAL STUDIES; OPTIMAL POLICIES; PRICE ADJUSTMENT; PRICING DECISION; REVENUE MANAGEMENT; SUBJECT CLASSIFICATION;

COST ACCOUNTING; COSTS; ECONOMICS; INVENTORY CONTROL; OPTIMIZATION; PROFITABILITY;

COMMERCE;

EID: 81455159290     PISSN: 0030364X     EISSN: 15265463     Source Type: Journal    
DOI: 10.1287/opre.1110.0946     Document Type: Article

References (39)

1. Aguirregabiria, V. 1999. The dynamics of markups and inventories in retailing firms. Rev. Econom. Stud. 66(2) 275-308.
2. Bergen, M., S. Dutta, D. Levy, M. Ritson, M. Zbaracki. 2003. Shattering the myth of costless price changes. Eur. Management J. 21(6) 663-669. (Pubitemid 37449852)
3. Caplin, A., D. F. Spulber. 1987. Menu costs and the neutrality of money. Quart. J. Econom. CII(4) 703-725.
4. Celik, S., A. Muharremoglu, S. Savin. 2009. Revenue management with costly price adjustments. Oper. Res. 57(5) 1206-1219.
5. Chan, L. M. A., Z. J. Max Shen, D. Simchi-Levi, J. Swann. 2004. Coordination of pricing and inventory. D. Simchi-Levi, S. D. Wu, Z. J. Max Shen, eds. Handbook of Quantitative Supply Chain Analysis: Modeling in the E-Business Era, Chapter 3. Kluwer, Boston.
6. Chao, X., S. X. Zhou. 2006. Joint inventory and pricing strategy for a stochastic continuous-review system. IIE Trans. 38(5) 401-408. (Pubitemid 43348019)
7. Chen, X. 2003. Coordinating inventory control and pricing strategies. Ph.D. thesis, Massachusetts Institute of Technology, Cambridge, MA.
8. Chen, X. 2009. Inventory centralization games with price-dependent demand and quantity discount. Oper. Res. 57(6) 1394-1406.
9. Chen, X., D. Simchi-Levi. 2004a. Coordinating inventory control and pricing strategies with random demand and fixed ordering cost: The finite horizon case. Oper. Res. 52(6) 887-896. (Pubitemid 40122349)
10. Chen, X., D. Simchi-Levi. 2004b. Coordinating inventory control and pricing strategies with random demand and fixed ordering cost: The infinite horizon case. Math. Oper. Res. 29(3) 698-723.
11. Chen, X., D. Simchi-Levi. 2006. Coordinating inventory control and pricing strategies with random demand and fixed ordering cost: The continuous review model. Oper. Res. Lett. 34(3) 323-332. (Pubitemid 43242949)
12. Chen, X., D. Simchi-Levi. 2009. A new approach for the stochastic cash balance problem with fixed costs. Probab. Engrg. Inform. Sci. 23(4) 545-562.
13. Chen, X., D. Simchi-Levi. 2011. Pricing and inventory management. O. Özer, R. Phillips, eds. The Handbook of Pricing Management. Forthcoming.
14. Chen, Y., S. Ray, Y. Song. 2005. Optimal pricing and inventory control policy in periodic-review systems with fixed ordering cost and lost sales. Naval Res. Logist. 53(2) 117-136.
15. Eeckhoudt, L., C. Gollier, H. Schlesinger. 1995. Risk averse (and prudent) newsboy. Management Sci. 41(5) 786-794.
16. Elmaghraby, W., P. Keskinocak. 2003. Dynamic pricing in the presence of inventory considerations: Research overview, current practices, and future directions. Management Sci. 49(10) 1287-1309.
17. Federgruen, A., A. Heching. 1999. Combined pricing and inventory control under uncertainty. Oper. Res. 47(3) 454-475.
18. Huh, W., G. Janakiraman. 2008. 4s1 S5 optimality in joint inventory-pricing control: An alternate approach. Oper. Res. 56(3) 783-790.
19. Kano, K. 2006. Menu costs, strategic interactions, and retail price movement. Working paper, Queen's University, Kingston, Ontario, Canada.
20. Kocabiyikoglu, A., I. Popescu. 2011. The newsvendor with pricing: A stochastic elasticity perspective. Oper. Res. 59(2) 301-312.
21. Konieczny, J. D. 1993. Variable price adjustment costs. Econom. Inquiry 31(3) 488-498.
22. Levy, D., M. Bergen, S. Dutta, R. Venable. 1997. The magnitude of menu costs: Direct evidence from large U.S. supermarket chains. Quart. J. Econom. 112(3) 791-825.
23. McCallum, B. T. 1986. On real and sticky-price theories of the business cycle. J. Money, Credit, Banking 18(2) 397-414.
24. McGill, G., G. van Ryzin. 1999. Revenue management: Research overview and prospects. Transportation Sci. 33(2) 233-256.
25. Netessine, S. 2006. Dynamic pricing of inventory/capacity with infrequent price changes. Eur. J. Oper. Res. 174(1) 553-580. (Pubitemid 44866818)
26. Petruzzi, N. C., M. Dada. 1999. Pricing and the newsvendor problem: A review with extensions. Oper. Res. 47(2) 183-194.
27. Roberts, J. 1992. Evidence on price adjustment costs in U.S. manufacturing industry. Econom. Inquiry 30(3) 399-417.
28. Rotemberg, J. 1982a. Monopolistic price adjustment and aggregate output. Rev. Econom. Stud. 49(4) 517-531.
29. Rotemberg, J. 1982b. Sticky prices in the United States. J. Political Econom. 90(6) 1187-1211.
30. Scarf, H. 1960. The optimality of 4s1 S5 policies for the dynamic inventory problem. Proc. 1st Stanford Sympos. Math. Methods Soc. Sci., Stanford University Press, Stanford, CA.
31. Sheshinski, E., Y. Weiss. 1977. Inflation and costs of price adjustment. Rev. Econom. Stud. 44(2) 287-303.
32. Sheshinski, E., Y. Weiss. 1993. Optimal Pricing, Inflation, and the Cost of Price Adjustment. MIT Press, Cambridge, MA.
33. Simchi-Levi, D., X. Chen, J. Bramel. 2005. The Logic of Logistics: Theory, Algorithms, and Applications for Logistics and Supply Chain Management, 2nd ed. Springer-Verlag, New York.
34. Slade, M. E. 1998. Optimal pricing with costly adjustment: Evidence from retail-grocery prices. Rev. Econom. Stud. 65(1) 87-107. (Pubitemid 128468173)
35. Song, Y., S. Ray, T. Boyaci. 2008. Optimal dynamic joint inventorypricing control for multiplicative demand with fixed order costs and lost sales. Oper. Res. 57(1) 245-250.
36. Topkis, D. M. 1998. Supermodularity and Complementarity. Princeton University Press, Princeton, NJ.
37. Tsiddon, D. 1991. On the stubbornness of sticky prices. Internat. Econom. Rev. 32(1) 69-75.
38. Whitin, T. M. 1955. Inventory control and price theory. Management Sci. 2(1) 61-68.
39. Zbaracki, M. J., M. Ritson, D. Levy, S. Dutta, M. Bergen. 2004. Managerial and customer costs of price adjustment: Direct evidence from industrial markets. Rev. Econom. Statist. 86(2) 512-533.