Study On Pricing And Stocking Problem Of Substitutable Products With Price Discount And Homogeneity Substitution

Nowadays, with the increasing of product variety, the substitution potentiality between products increases. This situation together with the short life-cycle of today's products challenges the retailers worldwide in their pricing and inventory strategy. And the study on substitutable products is one of its most important research branches. However, most of the current papers concentrated on the optimal ordering problems under the situation of product shortage. There're few of them considering price discount or the quantity package of the product in their studies.This dissertation introduces the classification method with the criterion that how the substitution relation is established. Under such a criterion, the substitution problems could be classified into function based, homogeneity based, brand based and price based problems. The characteristics of each of them are explained with theory and examples in daily life. After that the substitution problems without price discount is discussed with a classic"newsboy model"and a bi-lateral substitution model, whose objective functions are proved as a uni-modal, and the ranges of optimal ordering quantities are determined theoretically. Then, a model concerning the price discount of the higher class product when the lower class product is in shortage is established. The conditions under which its objective function is concave and an optimization algorithm are given. The effects of the parameter settings are discussed through a computational study.At the end of this dissertation, it studies the homogeneity substitution problems concerning the package volume of the substitutable products. Then the optimal ordering quantities and package volume of the products is discussed with a computational study and the sensitivity analysis of parameters is done.