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Optimal Inventory Decision Model With Random Short-term Price Discounts

Posted on:2018-03-08Degree:MasterType:Thesis
Country:ChinaCandidate:H X GaoFull Text:PDF
GTID:2359330518959698Subject:Operational Research and Cybernetics
Abstract/Summary:PDF Full Text Request
In modern consumer products market, enterprises adopt various marketing strategies to enhance their market share and competitiveness. As a means of stimulating consumption,price discount receives much attention. From supplier's perspective, the price discount can motivate the retailers to make larger-than-usual orders, which can not only help supplier to relieve his capital pressure by reducing storage and clearing stocks, but also decrease the order processing cost. However, to protect his own business interests, the supplier could not provide the price discount to retailers indefinitely as the price discount would decrease the supplier' s selling profit. As a result, the granting of the price discount is temporary and/or conditional, and the research on the inventory system with discount is usually conducted in an economic ordering quantity (EOQ) environment.This paper considers an inventory mechanism with a non-deterministic short-term price discount. In the mechanism, the supplier has a tendency to offer retailers a short-term price discount for a future occasion. Subsequently, when the discount occurs, the discount stock would start to reduce gradually. Therefore the discount might terminate ahead of schedule once the discount stock is depleted, which means that the discount possibility will gradually decrease from 1 ever after the start of the discount. For this system, to maximize the retailer's profit, we establish an optimal replenishment and stocking strategies model,and based on the model analysis, we present a solution method for the model and provide an optimal ordering policy to the retailer. The given numerical experiments illustrate the model's validity.
Keywords/Search Tags:Inventory management, replenishment and stocking strategy, stochastic, no shortage, short-term price discount, global optimization strategy
PDF Full Text Request
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