A multi-period ordering and clearance pricing model considering the competition between new and out-of-season products

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• 作者：Xiang Li ; Guohua Sun ; Yongjian Li
• 刊名：Annals of Operations Research
• 出版年：2016
• 出版时间：July 2016
• 年：2016
• 卷：242
• 期：2
• 页码：207-221
• 全文大小：918 KB
• 刊物类别：Business and Economics
• 刊物主题：Economics
  Operation Research and Decision Theory
  Combinatorics
  Theory of Computation
  
• 出版者：Springer Netherlands
• ISSN：1572-9338
• 卷排序：242

文摘

The joint management of pricing and inventory for perishable products has become an important problem for retailers. This paper investigates a multi-period ordering and clearance pricing model under consideration of the competition between new and out-of-season products. In each period, the ordering quantity of the new product and the clearance price of the out-of-season product are determined as decision variables before the demand is realized, and the unsold new product becomes the out-of-season one of the next period. We establish a finite-horizon Markov decision process model to formulate this problem and analyze its properties. A traditional dynamic program (DP) approach with two-dimensional search is provided. In addition, a myopic policy is derived in which only the profit of the current period is considered. Finally, we apply genetic algorithm (GA) to this problem and design a GA-based heuristic approach, showing by comparison among different algorithms that the GA-based heuristic approach is more performance sound than the myopic policy and much less time consuming than the DP approach.KeywordsClearance pricingPerishable productGenetic algorithmDynamic program