Inventorv Strategies With Advertising And Scarcity Effect

We consider the optimal production and inventory control strategies together with marketing decision. We take account of two kinds of marketing methods, one is advertising and the other one is scarcity effect created by retailers. Those researches, which conbine marketing decision with production and inventory control, rarely refer to advertising, and most of them study the combination of price strategy and inventory strategy. In this paper, we add two kinds of fixed costs into our model, fixed purchasing cost and fixed adverting cost, while in tradition researches, only one fixed cost was considered. Besides, we also build a dynamic model to study the scarcity effect on inventory strategy. At last we use numerical experiments to reflect the characters of optimal ordering quantity, advertising expenditure and the maximum profit.