Combined pricing and inventory control with multiple unreliable suppliers

We study a general finite horizon, periodic review combined inventory and pricing model with N suppliers and T periods, where both the demands and the supply mechanisms are random. The random supply mechanisms are of a general type that includes most structures encountered in practice. Demands are price dependent according to general, stochastic demand functions. We characterize the optimal combined pricing and ordering policies to all N suppliers. The general results pertain to general independent supply mechanisms. Under random capacities—one of the special random supply mechanisms—they also extend to suppliers that are positively dependent on each other.