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random yield

Thursday, October 4, 2018 - 2:00pm - 2:45pm
Xin Chen (University of Illinois at Urbana-Champaign)
We consider a joint pricing and inventory control problem with positive replenishment lead times. Although this fundamental problem has been extensively studied in the literature, the structure of the optimal policy remains poorly understood. In this work, we propose a class of so-called constant-order contingent pricing policies with provable performance. Under such a policy, a constant-order amount of new inventory is ordered every period and a pricing decision is made based on the on-hand inventory.
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