Dynamic stochastic inventory management with reference price effects

Operations Research

Volumn 64, Issue 6, 2016, Pages 1529-1536

  Chen, Xin ^a   Hu, Peng ^b   Shum, Stephen ^c   Zhang, Yuhan ^d  

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

^b HUAZHONG UNIVERSITY OF SCIENCE AND TECHNOLOGY   (China)

^c CITY UNIVERSITY OF HONG KONG   (Hong Kong)

^d Two Sigma Investments   (United States)

Author keywords

Base stock list price policy; Dynamic pricing; Loss averse; Reference price effects; Stochastic inventory

Indexed keywords

ECONOMICS; INVENTORY CONTROL; STOCHASTIC SYSTEMS;

DYNAMIC PRICING; EXPECTED REVENUE; INVENTORY AND PRICING; LIST PRICES; REFERENCE PRICE EFFECTS; STOCHASTIC INVENTORY; STOCHASTIC INVENTORY MANAGEMENT; TRANSFORMATION TECHNIQUES;

COSTS;

EID: 85002655777     PISSN: 0030364X     EISSN: 15265463     Source Type: Journal    
DOI: 10.1287/opre.2016.1524     Document Type: Article

References (22)

1. Chen X, Simchi-Levi D (2012) Pricing and inventory management. Philips P, Ozer O, eds. Oxford Handbook of Pricing Management (Oxford University Press, Oxford, UK), 784-822.
2. Chen X, Hu P, He S (2013) Preservation of supermodularity in parametric optimization problems with non-lattice structures. Oper. Res. 61(5):1166-1173.
3. Chen X, Hu P, Hu Z (2016) Efficient algorithms for dynamic pricing problem with reference price effect. Management Sci. Forthcoming.
4. Federgruen A, Heching A (1999) Combined pricing and inventory control under uncertainty. Oper. Res. 47(3):454-475.
5. Fibich G, Gavious A, Lowengart O (2003) Explicit solutions of optimization models and differential games with nonsmooth (asymmetric) reference-price effects. Oper. Res. 51(5):721-734.
6. Gimpl-Heersink DIL (2008) Joint pricing and inventory control under reference price effects. Doctoral dissertation, Vienna University of Economics and Business Administration.
7. Greenleaf EA (1995) The impact of reference price effects on the prof-itability of price promotions. Marketing Sci. 14(1):82-104.
8. Hardie BGS, Johnson EJ, Fader PS (1993) Modeling loss aversion and reference dependence effects on brand choice. Marketing Sci. 12(4):378-394.
9. Hu P (2011) Coordinated dynamic pricing and inventory management. Doctoral dissertation, University of Illinois at Urbana-Champaign.
10. Hu Z, Chen X, Hu P (2016) Dynamic pricing with gain-seeking reference price. Oper. Res. 64(1):150-157.
11. Kahneman D, Tversky A (1979) Prospect theory: An analysis of decision under risk. Econometrica 47(2).
12. Kalyanaram G, Little JDC (1994) An empirical analysis of latitude of price acceptance in consumer package goods. J. Consumer Res. 21(3):408-418.
13. Kalyanaram G, Winer RS (1995) Empirical generalizations from reference price research. Marketing Sci. 14(3):G161-G169.
14. Kopalle PK, Rao AG, Assunção JL (1996) Asymmetric reference price effects and dynamic pricing policies. Marketing Sci. 15(1):60-85.
15. Liu Q, van Ryzin G (2011) Strategic capacity rationing when customers learn. Manufacturing Service Oper. Managment 13(1):89-107.
16. Mazumdar T, Raj SP, Sinha I (2005) Reference price research: Review and propositions. J. Marketing 69(4):84-102.
17. Nasiry J, Popescu I (2011) Dynamic pricing with loss-averse consumers and peak-end anchoring. Oper. Res. 59(6):1361-1368.
18. Popescu I, Wu Y (2007) Dynamic pricing strategies with reference effects. Oper. Res. 55(3):413-429.
19. Simchi-Levi D, Chen X, Bramel J (2014) The Logic of Logistics: The-ory, Algorithms, and Applications for Logistics Management, 3rd ed. (Springer, New York).
20. Urban TL (2008) Coordinating pricing and inventory decisions under reference price effects. Internat. J. Manufacturing Technol. Management 13(1):78-94.
21. Yang L, de Vericourt F, Sun P (2014a) Time-based competition with benchmark effects. Manufacturing Service Oper. Management 16(1):119-132.
22. Yang L, Guo P, Wang Y (2014b) Service pricing with loss averse cus-tomers. Working paper, Tsinghua University, Beijing.