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Optimal firm's policy under lead time-and price-dependent demand: interest of customers rejection policy

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Listed:
  • Abduh Sayid

    (G-SCOP\_GCSP)

  • Yannick Frein

    (G-SCOP\_GCSP)

  • Ramzi Hammami

Abstract

Considering a lead-time-and price-sensitive demand, we investigate whether a client rejection policy, modeled as M/M/1/K system, can be more profitable than an all-client acceptance policy, modeled as M/M/1 system. We provide analytical insights for the cases with and without holding and penalty costs by comparing M/M/1/1 to M/M/1 models.

Suggested Citation

  • Abduh Sayid & Yannick Frein & Ramzi Hammami, 2017. "Optimal firm's policy under lead time-and price-dependent demand: interest of customers rejection policy," Papers 1708.07305, arXiv.org.
    • Handle: RePEc:arx:papers:1708.07305
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    References listed on IDEAS

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    1. So, Kut C. & Song, Jing-Sheng, 1998. "Price, delivery time guarantees and capacity selection," European Journal of Operational Research, Elsevier, vol. 111(1), pages 28-49, November.
    2. Liming Liu & Mahmut Parlar & Stuart X. Zhu, 2007. "Pricing and Lead Time Decisions in Decentralized Supply Chains," Management Science, INFORMS, vol. 53(5), pages 713-725, May.
    3. Abduh Sayid Albana & Yannick Frein & Ramzi Hammami, 2016. "Study of Client Reject Policies under Lead-Time and Price Dependent Demand," Working Papers hal-01250835, HAL.
    4. Roman Kapuscinski & Sridhar Tayur, 2007. "Reliable Due-Date Setting in a Capacitated MTO System with Two Customer Classes," Operations Research, INFORMS, vol. 55(1), pages 56-74, February.
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