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Requirements Planning with Pricing and Order Selection Flexibility

Author

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  • Joseph Geunes

    (Department of Industrial and Systems Engineering, University of Florida, Gainesville, Florida 32611-6595)

  • H. Edwin Romeijn

    (Department of Industrial and Systems Engineering, University of Florida, Gainesville, Florida 32611-6595)

  • Kevin Taaffe

    (Department of Industrial Engineering, Clemson University, Clemson, South Carolina 29634-0920)

Abstract

Past requirements-planning research has typically assumed that the firm’s demands are determined prior to production planning. In contrast, we explore a single-stage planning model that implicitly decides, through pricing decisions, the demand levels the firm should satisfy in order to maximize contribution to profit. We briefly discuss solution methods and properties for these problems when production capacities are unlimited. The key result of this work is a polynomial-time solution approach to the problem under time-invariant finite production capacities and piecewise-linear and concave revenue functions in price.

Suggested Citation

  • Joseph Geunes & H. Edwin Romeijn & Kevin Taaffe, 2006. "Requirements Planning with Pricing and Order Selection Flexibility," Operations Research, INFORMS, vol. 54(2), pages 394-401, April.
    • Handle: RePEc:inm:oropre:v:54:y:2006:i:2:p:394-401
    DOI: 10.1287/opre.1050.0255
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    References listed on IDEAS

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    Cited by:

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    2. Ehsan Ardjmand & Gary R. Weckman & William A. Young & Omid Sanei Bajgiran & Bizhan Aminipour, 2016. "A robust optimisation model for production planning and pricing under demand uncertainty," International Journal of Production Research, Taylor & Francis Journals, vol. 54(13), pages 3885-3905, July.
    3. Ghadimi, Foad & Aouam, Tarik & Haeussler, Stefan & Uzsoy, Reha, 2022. "Integrated and hierarchical systems for coordinating order acceptance and release planning," European Journal of Operational Research, Elsevier, vol. 303(3), pages 1277-1289.
    4. Aouam, Tarik & Brahimi, Nadjib, 2013. "Integrated production planning and order acceptance under uncertainty: A robust optimization approach," European Journal of Operational Research, Elsevier, vol. 228(3), pages 504-515.
    5. Adam N. Elmachtoub & Retsef Levi, 2016. "Supply Chain Management with Online Customer Selection," Operations Research, INFORMS, vol. 64(2), pages 458-473, April.
    6. Shu, Jia & Li, Zhengyi & Shen, Houcai & Wu, Ting & Zhong, Weijun, 2012. "A logistics network design model with vendor managed inventory," International Journal of Production Economics, Elsevier, vol. 135(2), pages 754-761.
    7. Yasemin Merzifonluoğlu & Joseph Geunes & H.E. Romeijn, 2007. "Integrated capacity, demand, and production planning with subcontracting and overtime options," Naval Research Logistics (NRL), John Wiley & Sons, vol. 54(4), pages 433-447, June.
    8. Brahimi, Nadjib & Absi, Nabil & Dauzère-Pérès, Stéphane & Nordli, Atle, 2017. "Single-item dynamic lot-sizing problems: An updated survey," European Journal of Operational Research, Elsevier, vol. 263(3), pages 838-863.
    9. Bajwa, Naeem & Sox, Charles R. & Ishfaq, Rafay, 2016. "Coordinating pricing and production decisions for multiple products," Omega, Elsevier, vol. 64(C), pages 86-101.
    10. van den Heuvel, Wilco & Wagelmans, Albert P.M., 2017. "A note on “A multi-period profit maximizing model for retail supply chain management”," European Journal of Operational Research, Elsevier, vol. 260(2), pages 625-630.
    11. Xiong‐zhi Wang & Guo‐qing Wang, 2019. "Integrating dynamic pricing and inventory control for fresh‐agri product under consumer choice," Australian Economic Papers, Wiley Blackwell, vol. 58(1), pages 96-111, March.
    12. Thomas C. Sharkey & Joseph Geunes & H. Edwin Romeijn & Zuo‐Jun Max Shen, 2011. "Exact algorithms for integrated facility location and production planning problems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 58(5), pages 419-436, August.
    13. Slotnick, Susan A., 2011. "Order acceptance and scheduling: A taxonomy and review," European Journal of Operational Research, Elsevier, vol. 212(1), pages 1-11, July.
    14. Cobuloglu, Halil I. & Büyüktahtakın, İ. Esra, 2015. "Food vs. biofuel: An optimization approach to the spatio-temporal analysis of land-use competition and environmental impacts," Applied Energy, Elsevier, vol. 140(C), pages 418-434.
    15. Taaffe, Kevin & Geunes, Joseph & Romeijn, H. Edwin, 2008. "Target market selection and marketing effort under uncertainty: The selective newsvendor," European Journal of Operational Research, Elsevier, vol. 189(3), pages 987-1003, September.
    16. Geunes, Joseph & Merzifonluoglu, Yasemin & Romeijn, H. Edwin, 2009. "Capacitated procurement planning with price-sensitive demand and general concave-revenue functions," European Journal of Operational Research, Elsevier, vol. 194(2), pages 390-405, April.
    17. Adam N. Elmachtoub & Retsef Levi, 2015. "From Cost Sharing Mechanisms to Online Selection Problems," Mathematics of Operations Research, INFORMS, vol. 40(3), pages 542-557, March.
    18. Zhi-Long Chen & Nicholas G. Hall, 2010. "The Coordination of Pricing and Scheduling Decisions," Manufacturing & Service Operations Management, INFORMS, vol. 12(1), pages 77-92, April.
    19. van den Heuvel, W. & Kundakcioglu, O.E. & Geunes, J. & Romeijn, H.E. & Sharkey, T.C. & Wagelmans, A.P.M., 2007. "Integrated market selection and production planning: complexity and solution approaches," Econometric Institute Research Papers EI 2007-45, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.

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