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 |
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Pages (from-to) | 1523-1527 |
Number of pages | 5 |
Journal | Operations Research |
Volume | 59 |
Issue number | 6 |
DOIs | |
Publication status | Published - 1 Nov 2011 |
Keywords
- Dynamic pricing
- Lead-time quotation
- Threshold policy