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Optimal replenishment and stocking strategies for inventory mechanism with a dynamically stochastic short-term price discount

Author

Listed:
  • Yiju Wang

    (Qufu Normal University)

  • Hengxia Gao

    (Qufu Normal University)

  • Wei Xing

    (Qufu Normal University)

Abstract

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. Based on the retailer’s cost-benefit analysis, we present a solution method for the model and provide an optimal ordering policy to the retailer. The given numerical experiments illustrate the validity of the model.

Suggested Citation

  • Yiju Wang & Hengxia Gao & Wei Xing, 2018. "Optimal replenishment and stocking strategies for inventory mechanism with a dynamically stochastic short-term price discount," Journal of Global Optimization, Springer, vol. 70(1), pages 27-53, January.
    • Handle: RePEc:spr:jglopt:v:70:y:2018:i:1:d:10.1007_s10898-017-0522-0
    DOI: 10.1007/s10898-017-0522-0
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    References listed on IDEAS

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    Cited by:

    1. Xiaohong Yu & Sujuan Wang & Xindong Zhang, 2019. "Ordering Decision and Coordination of a Dual-Channel Supply Chain with Fairness Concerns Under an Online-to-Offline Model," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(02), pages 1-26, April.
    2. Xu Leiyan & Zhiqing Meng, 2019. "Multi-Loss WCVaR Risk Decision Optimization Based On Weight for Centralized Supply Problem of Direct Chain Enterprises," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(02), pages 1-16, April.
    3. Xin-Sheng Xu & Felix T. S. Chan, 2019. "Optimal Option Purchasing Decisions for the Risk-Averse Retailer with Shortage Cost," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 36(02), pages 1-25, April.
    4. Weiwei Shen & Juliang Yin, 2022. "Optimal Investment and Risk Control Strategies for an Insurer Subject to a Stochastic Economic Factor in a Lévy Market," Methodology and Computing in Applied Probability, Springer, vol. 24(4), pages 2913-2931, December.

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