Inventory and pricing models for perishable products

In many industries, the demand for services and goods is perishable and uncertain. Companies in these industries often have inflexible supply processes for such products, as a consequence of overseas manufacturing, economies of scale or long term capacity decisions. Examples include fashion retailing, airlines and hospitality industries. In such industries, effective decision making in procurement, allocation and pricing can help to reduce the mismatches between supply and demand, and can make the difference between a profitable and an unprofitable company. The main objective of this dissertation is to develop analytical models to support decision-makers in these critical decisions. The dissertation starts with an overview of operations and recent trends and an assessment for the need for research and use of analytical models in the apparel industry.; The first model studies the procurement decisions when the perishable product can be sold in different markets with varying prices. It is assumed that the retailer or the manufacturer has only one chance to place an order. This leads to approaching the problem as a multiple market variant of the Newsboy problem. Two cases are distinguished: prices can go down, as in apparel, or up, as in airlines.; The second model addresses the pricing decisions assuming that the one time procurement decision is already made. The model allows a systematic resolution of demand uncertainty based on actual sales; in particular, early sales information is used to update the probability distribution of the demand using a Bayesian procedure. This model is used to study the impact of cost, variance and price elasticity of demand and strategic procurement decisions on revenues.; The third model studies the impact of competition in pricing decisions using a game theoretic analysis. The model assumes that there are two companies that sell fixed stocks of similar products over a selling season and derives the times that these companies switch from one price to another under a unique Nash equilibrium. It is shown that the equilibrium is a function of the degree of demand dependency and the difference in each company's initial stocking levels.