Financial Constraint On Combined Inventory And Pricing Decisions

With. the coming era of growing economy globalization and market-driven, a series of issues emerges such as indefinite market, shorter product life span and purchasing lead-time elongation, which are of growing difficulty on inventory control and product pricing. Manufacturing and service industries are all highly concerned with how to ensure supplying products to satisfy the demands of products. However, current supply chain policy and revenue management technology applying in enterprises only focus on one end of balance between supply and demands, either supply side or demand side. Enterprises need management methods to handle balance between supply and demand issues under indefinite environments. Therefore, this thesis chooses research on inventory and pricing joint decision-making which could handle balance between supply and demand issues. In addition, most previous research literatures assume that enterprises have sufficient funds to guarantee the implementation of decisions, but in actual worlds, funds constraint problem is that most enterprises have to face. When funds constraints, not only enterprises couldn’t implement inventory and pricing joint decision-making and affect earnings, but also all of the supply chain performance would be affected. Above all, the study by the financial constraints on how companies make inventory and pricing options for joint decision making is an important theoretical and practical significance work.This thesis is based on the above background to research on the financial constraints on joint decision between inventory and pricing control. First of all, documentation and data are collected and processed on certain topic in global scale, which introducing current research situation, analyzing improper points based on current models. Secondly, basic concepts, models and characteristics are described in detail on financial constraints, pricing and inventory control to analyze advantages and disadvantages of both theories on supply and demand balance. Thirdly, a joint decision model between inventory and pricing has been set up to ensure maximum profit for retailed dealers. On this basis, according to funds constraints and the financial strategy adopted by the enterprises, this thesis establishes two joint decision models of inventory and pricing, by considering funds constraints or not. These models will show up as a complex dynamic programming model. Analytical methods such as statistics and random Process, optimized control and dynamic plan and so on have been used to discuss on properties of built model. Utilize Excel to get solutions of the models in demand to simplify implementation of optimized policy to support joint decision system for enterprise management. The case study is to compare and analyze the properties of model solutions and how changes of parameters influence optimized profit.