COORDINATING PRICING, ORDERING AND ADVERTISING FOR PERISHABLE PRODUCTS OVER AN INFINITE HORIZON

作     者：Ye Lu Minghui Xu Yimin Yu 

作者机构：School of Economics and Management Wuhan University Wuhan China 

出 版 物：《Journal of Systems Science and Systems Engineering》 (系统科学与系统工程学报（英文版）)

年 卷 期：2018年第27卷第1期

页      面：106-129页

核心收录：

学科分类：12[管理学] 1201[管理学-管理科学与工程(可授管理学、工学学位)] 080901[工学-物理电子学] 0809[工学-电子科学与技术（可授工学、理学学位）] 08[工学] 080401[工学-精密仪器及机械] 0804[工学-仪器科学与技术] 0803[工学-光学工程] 

基　　金：supported by a grant from National Science Foundation of China a research fund for Academic Team of Young Scholars at Wuhan University 

主　　题：Pricing newsvendor problem advertising carryover effect perishable product 

摘      要：Numerous empirical studies show that advertising effort can stimulate demand in both current and future periods, and there is an interaction between pricing, advertising and ordering decisions. How do these decisions interact with each other and what is the effect of advertising on pricing and ordering decisions？ To understand this interaction, we consider a newsvendor-type firm that sells a perishable product in a stable market and dynamically determines the joint ordering, pricing and advertising strategies. The problem is modeled as an infmite horizon newsvendor problem with an advertising carryover effect and price-sensitive demand. We characterize the optimal pricing, advertising and inventory strategies and their comparative statics, and consider how this policy differs from the traditional approach without the advertising effect. We show that the optimal effective advertising level is monotonically increasing with the effective advertising level in the previous period, and hence the optimal strategies （advertising, pricing, inventory level） globally converge to the steady states in the long run. We numerically show that the optimal policy can reap significant profit, which underscores the importance of the advertising-driven ordering and pricing strategies.