An optimal policy for joint dynamic price and lead-time quotation

Jiejian FENG; Liming LIU; Xiaoming LIU

doi:10.1287/opre.1110.0969

An optimal policy for joint dynamic price and lead-time quotation

Jiejian FENG, Liming LIU, Xiaoming LIU

Department of Computing and Decision Sciences

Research output: Journal Publications › Journal Article (refereed) › peer-review

19 Citations (SciVal)

Abstract

For a dynamic joint price and lead-time quotation problem with a fairly general demand function, we show that the policy consisting of a threshold and a reward-maximizing lead-time is optimal. This policy offers some interesting managerial insights. Under this policy, finding the exact optimal quotation can be accomplished by single-variable policy iterations of unimodal value functions.

Original language	English
Pages (from-to)	1523-1527
Number of pages	5
Journal	Operations Research
Volume	59
Issue number	6
DOIs	https://doi.org/10.1287/opre.1110.0969
Publication status	Published - 1 Nov 2011

Keywords

Dynamic pricing
Lead-time quotation
Threshold policy

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10.1287/opre.1110.0969

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abstract = "For a dynamic joint price and lead-time quotation problem with a fairly general demand function, we show that the policy consisting of a threshold and a reward-maximizing lead-time is optimal. This policy offers some interesting managerial insights. Under this policy, finding the exact optimal quotation can be accomplished by single-variable policy iterations of unimodal value functions.",

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AU - LIU, Liming

AU - LIU, Xiaoming

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N2 - For a dynamic joint price and lead-time quotation problem with a fairly general demand function, we show that the policy consisting of a threshold and a reward-maximizing lead-time is optimal. This policy offers some interesting managerial insights. Under this policy, finding the exact optimal quotation can be accomplished by single-variable policy iterations of unimodal value functions.

AB - For a dynamic joint price and lead-time quotation problem with a fairly general demand function, we show that the policy consisting of a threshold and a reward-maximizing lead-time is optimal. This policy offers some interesting managerial insights. Under this policy, finding the exact optimal quotation can be accomplished by single-variable policy iterations of unimodal value functions.

KW - Dynamic pricing

KW - Lead-time quotation

KW - Threshold policy

UR - http://commons.ln.edu.hk/sw_master/2450

U2 - 10.1287/opre.1110.0969

DO - 10.1287/opre.1110.0969

M3 - Journal Article (refereed)

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VL - 59

SP - 1523

EP - 1527

JO - Operations Research

JF - Operations Research

IS - 6

ER -

An optimal policy for joint dynamic price and lead-time quotation

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Keywords

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