Continuously Increasing Price in an Inventory Cycle An Optimal Strategy for E-Tailers英文文献资料.docVIP

HindawiPublishingCorporation JournalofAppliedMathematicsandDecisionSciences Volume2008,ArticleID483267,14pages doi:10.1155/2008/483267 ResearchArticle ContinuouslyIncreasingPriceinanInventory Cycle:AnOptimalStrategyforE-Tailers PrafullaJoglekar,1PatrickLee,2andAlirezaM.Farahani3 1Management Department, LaSalleUniversity,1900W.OlneyAvenue,Philadelphia, PA19141-1199, USA 2IS/OMDepartment, Fair?eldUniversity,1073NorthBensonRoad,Fair?eld,CT06824-5154, USA 3ComputerScienceandInformation SystemsDepartment, SchoolofEngineering andTechnology, NationalUniversity,11255NorthTorreyPinesRoad,LaJolla,CA92037-0515, USA Correspondence shouldbeaddressedtoPrafullaJoglekar,joglekar@ Received31May2007;Accepted21April2008 Recommended byAndreasSoteriou Operations researchers have always assumed that when a product’s unit cost is constant and its demandcurveisknownandstationary,aretaileroftheproductwould?nditoptimaltoreplenish the inventory with a ?xed quantity and to sell the product always at a ?xed price. We present, with proof, a model that shows that, in such a case, an e-tailer is better o? using a continuously increasing price strategy than using a?xed price strategy within each inventory cycle. Sensitivity analysis shows that this strategy isparticularly pro?table when demand ishighly price sensitive andtheinventoryorderingandcarryingcostsarehigh. Copyrightq2008PrafullaJoglekaretal. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproductioninanymedium,providedtheoriginalworkisproperlycited. 1.Introduction When a retailer of a product buys the product at a constant unit cost, incurs a ?xed cost perorder,storestheproductataconstantcarryingcostperunitofinventoryperyear,and facesadeterministicandconstantdemandrateoveranin?nitehorizon,theeconomicorder quantityEOQmodeltellsusthattheretailer’soptimalstrategyistobuya?xedquantity everytimeheorshebuys.Ignoringinventoryrelated