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Management decision-making in the single period optimum pricing problem

Author

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  • P C Bell

    (University of Western Ontario)

  • M Zhang

    (University of Western Ontario)

Abstract

Management of the firm implementing revenue management has many decisions to make regarding the details of the implementation. In this article we examine seven different decisions surrounding the implementation of aggressive ‘revenue management’ pricing in the context of a firm facing a single period stochastic pricing and stocking problem. We demonstrate through use of an example, that some of the decisions have a large financial impact, while other options that require considerable computational work to implement may provide little financial impact.

Suggested Citation

  • P C Bell & M Zhang, 2006. "Management decision-making in the single period optimum pricing problem," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 57(4), pages 377-388, April.
    • Handle: RePEc:pal:jorsoc:v:57:y:2006:i:4:d:10.1057_palgrave.jors.2601993
    DOI: 10.1057/palgrave.jors.2601993
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    References listed on IDEAS

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    1. Guillermo Gallego & Garrett van Ryzin, 1994. "Optimal Dynamic Pricing of Inventories with Stochastic Demand over Finite Horizons," Management Science, INFORMS, vol. 40(8), pages 999-1020, August.
    2. Nicholas C. Petruzzi & Maqbool Dada, 1999. "Pricing and the Newsvendor Problem: A Review with Extensions," Operations Research, INFORMS, vol. 47(2), pages 183-194, April.
    3. T. M. Whitin, 1955. "Inventory Control and Price Theory," Management Science, INFORMS, vol. 2(1), pages 61-68, October.
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    Cited by:

    1. Zhang, Michael & Bell, Peter C. & Cai, Gangshu (George) & Chen, Xiangfeng, 2010. "Optimal fences and joint price and inventory decisions in distinct markets with demand leakage," European Journal of Operational Research, Elsevier, vol. 204(3), pages 589-596, August.
    2. Zhang, Michael & Bell, Peter C., 2007. "The effect of market segmentation with demand leakage between market segments on a firm's price and inventory decisions," European Journal of Operational Research, Elsevier, vol. 182(2), pages 738-754, October.

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