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A newsvendor problem with markup pricing in the presence of within-period price fluctuations

Title	A newsvendor problem with markup pricing in the presence of within-period price fluctuations
Author	Canyakmaz, Caner, Özekici, S., Karaesmen, F.
Publication Date:	2022-08-16
Publication Place	- Elsevier
Subject	Inventory, Markup pricing, Stochastic processes
Type	Periodical
Language	English
Digital	Yes
Manuscript	No
Library:	Özyeğin University
Library Asset ID	0377-2217
Record ID	a49bfaae-c42c-4142-ba8a-bc6429b3dbab
Library Location	Business Administration
Date	2022-08-16
Sample Text	We consider a single-item single-period joint inventory management and pricing problem of a retailer selling an item that has selling price uncertainties. Unlike most of the literature on the newsvendor problem, we assume that price-dependent demand arrives randomly according to a stochastic arrival process whose rate depends on the fluctuating market input price process. The retailer's problem is to choose the order quantity and a proportional price markup over the input price to maximize the expected profit. This setting is mostly encountered by retailers that trade in different currencies or have to purchase and convert commodities for seasonal sales. For this setting, we characterize both the optimal inventory and markup levels. We present monotonicity properties of the expected profit function with respect to each decision variable. We also show that more volatile input price processes lead to lower expected profits.
DOI	10.1016/j.ejor.2021.09.042
Cilt	301

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Özyeğin University

A newsvendor problem with markup pricing in the presence of within-period price fluctuations

Author Canyakmaz, Caner, Özekici, S., Karaesmen, F.

Publication Date 2022-08-16

Publication Place - Elsevier

Subject Inventory, Markup pricing, Stochastic processes

Type Periodical

Language English

Digital Yes

Manuscript No

Library Özyeğin University

Library Asset ID 0377-2217

Record ID a49bfaae-c42c-4142-ba8a-bc6429b3dbab

Library Location Business Administration

Date 2022-08-16

Sample Text We consider a single-item single-period joint inventory management and pricing problem of a retailer selling an item that has selling price uncertainties. Unlike most of the literature on the newsvendor problem, we assume that price-dependent demand arrives randomly according to a stochastic arrival process whose rate depends on the fluctuating market input price process. The retailer's problem is to choose the order quantity and a proportional price markup over the input price to maximize the expected profit. This setting is mostly encountered by retailers that trade in different currencies or have to purchase and convert commodities for seasonal sales. For this setting, we characterize both the optimal inventory and markup levels. We present monotonicity properties of the expected profit function with respect to each decision variable. We also show that more volatile input price processes lead to lower expected profits.

DOI 10.1016/j.ejor.2021.09.042

Cilt 301