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Dynamic pricing for nonperishable products with demand learning

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dc.contributor.author Araman V.F.
dc.contributor.author Caldentey R.
dc.contributor.editor
dc.date 2009
dc.date.accessioned 2017-09-07T07:51:17Z
dc.date.available 2017-09-07T07:51:17Z
dc.date.issued 2009
dc.identifier 10.1287/opre.1090.0725
dc.identifier.uri http://hdl.handle.net/10938/12057
dc.description.abstract A retailer is endowed with a finite inventory of a nonperishable product. Demand for this product is driven by a pricesensitive Poisson process that depends on an unknown parameter that is a proxy for the market size. The retailer has a prior belief on the value of this parameter that he updates as time and available information (prices and sales) evolve. The retailer's objective is to maximize the discounted long-term average profits of his operation using dynamic pricing policies. We consider two cases. In the first case, the retailer is constrained to sell the entire initial stock of the nonperishable product before a different assortment is considered. In the second case, the retailer is able to stop selling the nonperishable product at any time and switch to a different menu of products. For both cases, we formulate the retailer's problem as a (Poisson) intensity control problem and derive structural properties of an optimal solution, and suggest a simple and efficient approximated solution. We use numerical computations, together with asymptotic analysis, to evaluate the performance of our proposed policy. © 2009 INFORMS.
dc.format.extent
dc.format.extent Pages: (1169-1188)
dc.language English
dc.publisher HANOVER
dc.relation.ispartof Publication Name: Operations Research; Publication Year: 2009; Volume: 57; no. 5; Pages: (1169-1188);
dc.source Scopus
dc.title Dynamic pricing for nonperishable products with demand learning
dc.type Article
dc.contributor.affiliation Araman, V.F., Stern School of Business, New York University, New York, NY 10012, United States, Layan School of Business, American University of Beirut, Beirut, Lebanon
dc.contributor.affiliation Caldentey, R., Stern School of Business, New York University, New York, NY 10012, United States
dc.contributor.authorAddress Araman, V. F.; Stern School of Business, New York University, New York, NY 10012, United States; email: va03@aub.edu.lb
dc.contributor.authorCorporate University: American University of Beirut; Faculty: Suliman S. Olayan School of Business; Department: School of Business;
dc.contributor.authorDepartment School of Business
dc.contributor.authorDivision
dc.contributor.authorEmail va03@aub.edu.lb; rcaldent@stern.nyu.edu
dc.contributor.authorFaculty Suliman S. Olayan School of Business
dc.contributor.authorInitials Araman, VF
dc.contributor.authorInitials Caldentey, R
dc.contributor.authorOrcidID
dc.contributor.authorReprintAddress Araman, VF (reprint author), NYU, Stern Sch Business, 550 1St Ave, New York, NY 10012 USA.
dc.contributor.authorResearcherID
dc.contributor.authorUniversity American University of Beirut
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dc.description.citedCount 29
dc.description.citedTotWOSCount 26
dc.description.citedWOSCount 25
dc.format.extentCount 20
dc.identifier.articleNo
dc.identifier.coden OPREA
dc.identifier.scopusID 70350228783
dc.publisher.address 7240 PARKWAY DR, STE 310, HANOVER, MD 21076-1344 USA
dc.relation.ispartOfISOAbbr Oper. Res.
dc.relation.ispartOfIssue 5
dc.relation.ispartofPubTitle Operations Research
dc.relation.ispartofPubTitleAbbr Oper Res
dc.relation.ispartOfVolume 57
dc.source.ID WOS:000270866000011
dc.type.publication Journal
dc.subject.otherAuthKeyword Approximations
dc.subject.otherAuthKeyword Bayesian Demand Learning
dc.subject.otherAuthKeyword Dynamic Pricing
dc.subject.otherAuthKeyword Intensity Control
dc.subject.otherAuthKeyword Nonhomogeneous Poisson Process
dc.subject.otherAuthKeyword Optimal Stopping
dc.subject.otherIndex Approximations
dc.subject.otherIndex Bayesian Demand Learning
dc.subject.otherIndex Dynamic Pricing
dc.subject.otherIndex Intensity Control
dc.subject.otherIndex Nonhomogeneous Poisson Process
dc.subject.otherIndex Optimal Stopping
dc.subject.otherIndex Asymptotic Analysis
dc.subject.otherIndex Bayesian Networks
dc.subject.otherIndex Costs
dc.subject.otherIndex Optimization
dc.subject.otherIndex Poisson Distribution
dc.subject.otherIndex Poisson Equation
dc.subject.otherIndex Profitability
dc.subject.otherIndex Sales
dc.subject.otherIndex Process Control
dc.subject.otherKeywordPlus Inventory Models
dc.subject.otherKeywordPlus Experimentation
dc.subject.otherKeywordPlus Distributions
dc.subject.otherKeywordPlus Management
dc.subject.otherKeywordPlus Policies
dc.subject.otherKeywordPlus Sales
dc.subject.otherWOS Management
dc.subject.otherWOS Operations Research and Management Science
dc.identifier.doi http://dx.doi.org/10.1287/opre.1090.0725


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