We study a joint inventory and pricing problem in a single-stage system with a positive lead time. We consider both additive and multiplicative demand forms. This problem is, in general, intractable due to its computational complexity. We develop a simple heuristic that resolves this issue. The heuristic involves a myopic pricing policy that generates each period’s price as a function of the in...

The main purpose of this paper is to investigate the retailer’s inventory policy under two levels of trade credit to reflect the supply chain management situation. In this paper, we assume that the retailer has the powerful decision-making right. So, we extend the assumption that the retailer can obtain the full trade credit offered by the supplier and the retailer just offers the partial trade...

Inventory pooling is at the root of many celebrated ideas in operations management. Postponement, component commonality, and resource flexibility are some examples. Motivated by our experience in the after-market services industry, we propose a model of inventory pooling to meet differentiated service levels for multiple customers. Our central research question is the following: What are the mi...

We consider an inventory system in which inventory level fluctuates as a Brownian motion in the absence of control. The inventory continuously accumulates cost at a rate that is a general convex function of the inventory level, which can be negative when there is a backlog. At any time, the inventory level can be adjusted by a positive or negative amount, which incurs a fixed cost and a proport...

In the considered multistage supply chain, the product structure determines the organization of the network of enterprises that cooperate to manufacture end-products from raw materials. This paper proposes to describe such a multistage supply chain by a sequence of linear dynamical models with distributed delays. The assumed autonomy and information privacy of production units imposes structura...

Motivated by the widespread adoption of dynamic pricing in industry and the empirical evidence of costly price adjustments, in this paper we consider a periodic-review inventory model with price adjustment costs that consist of both fixed and variable components. In each period, demand is stochastic and price-dependent. The firm needs to coordinate the pricing and inventory replenishment decisi...

A novel paradigm for adaptation in discrete event dynamic systems control is presented. The general idea is then applied, through simulations, to an inventory system. A fuzzy adaptation module is built from few optimal examples generated using a genetic algorithm. The fuzzy module is then capable of adapting the inventory policy achieving much better results than a static policy.

– All-unit order frequency discount • 94%-effective policy for a variable base period – Incremental order frequency discount • 94%-effective policy for a fixed base period • 98%-effective policy for a variable base period Introduction • A supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products, and deliver the products t...

We consider an assembly system with multiple stages, multiple items, and multiple customer classes. The system consists of m production facilities, each producing a different item. Items are produced in variable batch sizes, one batch at a time, with exponentially distributed batch production times. Demand from each class takes place continuously over time according to a compound Poisson proces...