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

Jiejian FENG, Liming LIU, Xiaoming LIU

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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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Lead
Lead time
Price dynamics
Optimal policy

Keywords

  • Dynamic pricing
  • Lead-time quotation
  • Threshold policy

Cite this

FENG, Jiejian ; LIU, Liming ; LIU, Xiaoming. / An optimal policy for joint dynamic price and lead-time quotation. In: Operations Research. 2011 ; Vol. 59, No. 6. pp. 1523-1527.
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An optimal policy for joint dynamic price and lead-time quotation. / FENG, Jiejian; LIU, Liming; LIU, Xiaoming.

In: Operations Research, Vol. 59, No. 6, 01.11.2011, p. 1523-1527.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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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.

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KW - Threshold policy

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