|Table of Contents|

Optimal Ordering and Pricing Decisions of a Retailer Under Stochastic Demand with Considering Variable Stockout Cost(PDF)

《南京师大学报（自然科学版）》[ISSN:1001-4616/CN:32-1239/N]

Issue:
2022年03期
Page:
9-14
Research Field:
数学
Publishing date:

Info

Title:
Optimal Ordering and Pricing Decisions of a Retailer Under Stochastic Demand with Considering Variable Stockout Cost
Author(s):
Xiao Yuhui1; Lou Zhenkai2; Dai Xiaozhen3
(1.Gathering Stars Digital Econormic College,Haikou University of Economics,Haikou 571127,China)(2.School of Management and Economics,Beijing Institute of Technology,Beijing 100081,China)(3.School of Management,Wenzhou Business College,Wenzhou 325035,China)
Keywords:
tochastic demand; ordering and pricing; opportunity loss; existence of the extremum value
PACS:
F224; F274
DOI:
10.3969/j.issn.1001-4616.2022.03.002
Abstract:
This paper studies optimal ordering and pricing issues of a retailer who faces price-linear-sensitive and stochastic demand. By considering variable stockout cost of one item under different retail price,the conception of variable opportunity loss is proposed. Then an ordering and pricing model is constucted under stochastic demand for the purpose of trading off opportunity loss and overordering cost. It is shown that the ordering quantity and the retail price of the retailer meet a unique relation formula,by which the previous model is transformed to another model which only involves one decision variable. By analyzing the existence of the extremum value of the profit function,a necessary condition in which the retailer's profit is positive is presented. Further,a sufficient condition in which the maximal value of the profit function exists is obtained under the assumption that the probability density function of the stochastic item of demand is differentiable. By analyzing the maximal profit,the retailer is able to draw the conclusion for whether or not to order and sales. Finally,a numerical illustration is presented to make some supplements.

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Last Update: 2022-09-15