Retailer’s optimal pricing and lot-sizing policies for deteriorating items with partial backlogging |
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| Affiliation: | 1. School of Economics and Management, Nanjing University of Science and Technology, Nanjing 210094, PR China;2. Rowe School of Business, Dalhousie University, Halifax NS B3H 4R2, Canada;3. School of Management and Economics, University of Electronic Science and Technology, Chengdu 611731, PR Chinan;4. Lerner College of Business and Economics, University of Delaware, Newark DE 19716, USAn;1. Jacobs Engineering Group, 2705 Bee Cave Road Suite 300, Austin, Texas 78746, USA;2. AECOM, 9500 Amberglen Blvd, Ausint, Texas 78729, USA |
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| Abstract: | Pricing is a major strategy for a retailer to obtain its maximum profit. Therefore, in this paper, we establish an economic order quantity model for a retailer to determine its optimal selling price, replenishment number and replenishment schedule with partial backlogging. We first prove that the optimal replenishment schedule not only exists but also is unique, for any given selling price. Next, we show that the total profit is a concave function of p when the replenishment number and schedule are given. We then provide a simple algorithm to find the optimal selling price, replenishment number and replenishment timing for the proposed model. Finally, we use a couple of numerical examples to illustrate the algorithm. |
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