IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v195y2018icp373-390.html
   My bibliography  Save this article

An integrated revenue management framework for a firm’s greening, pricing and inventory decisions

Author

Listed:
  • Raza, Syed Asif
  • Rathinam, Sivakumar
  • Turiac, Mihaela
  • Kerbache, Laoucine

Abstract

There is a growing interest on developing efficient ways of incorporating environmental considerations into business practices in order to meet both consumers’ demand for green products/services, and the firms’ sustainable profitability. The main contribution of this article is in developing an integrated revenue management framework to address a firm’s greening (investment) effort, pricing and inventory decisions. It is assumed that the firm inaugurates a green product along with its existing product. Even though the firm offers both the green and regular product at differentiated prices, the market segmentation as a result of this price differentiation is regarded as imperfect. This imperfect market segmentation causes a demand leakage mainly due to the heterogeneity among the customers’ willingness-to-pay. These effects are included in our proposed model and simplified analytical solutions are developed to solve the same. Additional scenarios where a firm experiences a price-dependent stochastic demand with an unknown distribution is also modeled. This scenario is addressed using a distribution-free approach based on Scarf’ s rule. The performance of the proposed methods and the significance of the modeling framework are finally corroborated through several simulations. This analysis provides a sustainable environment, production and retailing framework while still augmenting profitability using fundamental tools from revenue management.

Suggested Citation

  • Raza, Syed Asif & Rathinam, Sivakumar & Turiac, Mihaela & Kerbache, Laoucine, 2018. "An integrated revenue management framework for a firm’s greening, pricing and inventory decisions," International Journal of Production Economics, Elsevier, vol. 195(C), pages 373-390.
  • Handle: RePEc:eee:proeco:v:195:y:2018:i:c:p:373-390
    DOI: 10.1016/j.ijpe.2016.11.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527316303371
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ijpe.2016.11.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abhishek Srivastava & Abhishek Chakraborty & Arqum Mateen, 2022. "Role of power imbalance on channel coordination under greening investments," OPSEARCH, Springer;Operational Research Society of India, vol. 59(4), pages 1522-1554, December.
    2. Chenbo Zhu & Juntian Yue & Jing Chen, 2022. "Green Product Development and Order Strategies for Retailers," Sustainability, MDPI, vol. 14(15), pages 1-18, August.
    3. Bing Xu & Qingyun Xu & Qiushi Bo & Qifan Hu, 2018. "Green Product Development with Consumer Heterogeneity under Horizontal Competition," Sustainability, MDPI, vol. 10(6), pages 1-20, June.
    4. Çağlar Kıvanç Kaymaz & Salih Birinci & Yusuf Kızılkan, 2022. "Sustainable development goals assessment of Erzurum province with SWOT-AHP analysis," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(3), pages 2986-3012, March.
    5. Raza, Syed Asif & Govindaluri, Srikrishna Madhumohan, 2019. "Pricing strategies in a dual-channel green supply chain with cannibalization and risk aversion," Operations Research Perspectives, Elsevier, vol. 6(C).
    6. Bai, Qingguo & Gong, Yeming (Yale) & Jin, Mingzhou & Xu, Xianhao, 2019. "Effects of carbon emission reduction on supply chain coordination with vendor-managed deteriorating product inventory," International Journal of Production Economics, Elsevier, vol. 208(C), pages 83-99.
    7. Zhen Li & Hongming Zhu & Qingfeng Meng & Changzhi Wu & Jianguo Du, 2019. "Manufacturers’ Green Decision Evolution Based on Multi-Agent Modeling," Complexity, Hindawi, vol. 2019, pages 1-14, April.
    8. Syed Asif Raza, 2020. "Price Differentiation and Inventory Decisions in a Socially Responsible Dual-Channel Supply Chain with Partial Information Stochastic Demand and Cannibalization," Sustainability, MDPI, vol. 12(22), pages 1-42, November.
    9. Raza, Syed Asif, 2018. "Supply chain coordination under a revenue-sharing contract with corporate social responsibility and partial demand information," International Journal of Production Economics, Elsevier, vol. 205(C), pages 1-14.
    10. Qingfeng Meng & Hongming Zhu & Zhen Li & Jianguo Du & Xiangyu Wang & Mi Jeong Kim, 2018. "How Green Building Product Decisions from Customers Can Be Transitioned to Manufacturers: An Agent-Based Model," Sustainability, MDPI, vol. 10(11), pages 1-16, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:195:y:2018:i:c:p:373-390. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.