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

Jiejian FENG, Liming LIU, Xiaoming LIU

Research output: Journal PublicationsJournal Article (refereed)

12 Citations (Scopus)

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 languageEnglish
Pages (from-to)1523-1527
Number of pages5
JournalOperations Research
Volume59
Issue number6
DOIs
Publication statusPublished - 1 Nov 2011

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Keywords

  • Dynamic pricing
  • Lead-time quotation
  • Threshold policy

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