A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital

Ismail Civelek

doi:doi:10.11648/j.ijber.s.2014030601.11

| Peer-Reviewed

A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital

Ismail Civelek

Published in International Journal of Business and Economics Research (Volume 3, Issue 6-1)

Received: 5 October 2014 Accepted: 16 October 2014 Published: 11 December 2014

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

The simultaneous stochastic pricing and inventory management with capacitated cash-on-hand is a profit maximization problem faced by a firm, which has limited working capital for its liabilities. In addition to this working capital constraint, the company has to dynamically price its products and determine inventory levels to minimize its expected cost. In our study, we tackle this complicated problem by assuming a single product, periodic review inventory model with finite multiple periods, and imperfect market information. We also assume no fixed cost in order to relax the complexity of the problem and perform numerical analysis for providing managerial implications. We investigate several research questions to extend our understanding of this complicated but very practical problem faced by numerous decision-makers in organizations. A discussion of possible optimal policies for this complicated unanswered problem with working capital constraints is explored.

Published in	International Journal of Business and Economics Research (Volume 3, Issue 6-1) This article belongs to the Special Issue Supply Chain Management: Its Theory and Applications
DOI	10.11648/j.ijber.s.2014030601.11
Page(s)	1-5
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2014. Published by Science Publishing Group

Keywords

Dynamic Pricing, Inventory Control, Supply Chain Management

References

[1]	W. J. Baumol. “The transactions demand for cash: an inventory theoretic approach,” The Quarterly Journal of Economics, Vol. 66, No. 4, pp. 545-556, 1952.
[2]	J. Buzacott and R. Q. Zhang. “Inventory management with asset-based financing,” Management Science, Vol. 50, No. 9, pp. 1274-1292, 2004.
[3]	S. Chand and T. E. Morton. “A perfect planning horizon procedure for a deterministic cash balance problem,” Management Science, Vol. 28, No. 6, pp. 652-669, 1982.
[4]	A. J. Clark and E. H. Scarf. “Optimal policies for a multi-echelon inventory problem,” Management Science, Vol. 6, No. 4, pp. 475-490, 1960.
[5]	X. Chen and D. Simchi-Levi. “Coordinating inventory control and pricing strategies with random demand and fixed ordering cost: The finite horizon case,” Operations Research, Vol. 52, No. 6, pp. 887-896, 2004.
[6]	G. M. Constantinides. “Stochastic cash management with fixed and proportional transaction costs,” Management Science, Vol. 22, No. 12, pp. 1320-1331, 1976.
[7]	G. D. Eppen and E. F. Fama. “Cash balance and simple dynamic portfolio problems with proportional costs,” International Economic Review, Vol. 10, No. 2, pp. 119-133, 1969.
[8]	A. Federgruen and A. Heching. “Combined pricing and inventory control under uncertainty,” Operations Research, Vol. 47, No. 3, pp. 454-475, 1999.
[9]	Y. Feng and F. Chen. “Joint Pricing and inventory control with setup costs and demand uncertainty,” Working paper, 2002.
[10]	N. M. Girgis. “Optimal cash balance levels,” Management Science, Vol. 15, No.3, pp. 130-140, 1968.
[11]	D. P. Heyman. “A model for cash balance management,” Management Science, Vol. 19, No. 12, pp. 1407-1413, 1973.
[12]	J. G. Kallberg, R. W. White and W. T. Ziemba. “Short term financial planning under uncertainty,” Management Science, Vol. 28, No. 6, pp. 670-682, 1982.
[13]	E, H. Neave. “The stochastic cash balance problem with fixed costs for increases and decreases,” Management Science, Vol. 16, No. 7, pp. 472-490, 1970.
[14]	Y. E. Orgler. “An unequaled-period model for cash management decisions,” Management Science, Vol. 18, No. 2, pp. B77-B92, 1969.
[15]	E. Porteus. “Equivalent formulations of the stochastic cash balance problem,” Management Science, Vol. 19, No. 3, pp. 250-253, 1972.
[16]	E. Porteus. “The stochastic cash balance problem with charges levied against the balance,” Management Science, Vol. 18, No. 1, pp. 600-602, 1972.
[17]	A. A. Robicheck, D. Teichroew and J. M. Jones. “Optimal short term financing decisions,” Management Science, Vol. 12, No. 1, pp. 1-36, 1965.

Cite This Article

Plain Text BibTeX RIS

APA Style

Ismail Civelek. (2014). A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital. International Journal of Business and Economics Research, 3(6-1), 1-5. https://doi.org/10.11648/j.ijber.s.2014030601.11

Copy | Download

ACS Style

Ismail Civelek. A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital. Int. J. Bus. Econ. Res. 2014, 3(6-1), 1-5. doi: 10.11648/j.ijber.s.2014030601.11

Copy | Download

AMA Style

Ismail Civelek. A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital. Int J Bus Econ Res. 2014;3(6-1):1-5. doi: 10.11648/j.ijber.s.2014030601.11

Copy | Download

@article{10.11648/j.ijber.s.2014030601.11,
  author = {Ismail Civelek},
  title = {A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital},
  journal = {International Journal of Business and Economics Research},
  volume = {3},
  number = {6-1},
  pages = {1-5},
  doi = {10.11648/j.ijber.s.2014030601.11},
  url = {https://doi.org/10.11648/j.ijber.s.2014030601.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.s.2014030601.11},
  abstract = {The simultaneous stochastic pricing and inventory management with capacitated cash-on-hand is a profit maximization problem faced by a firm, which has limited working capital for its liabilities. In addition to this working capital constraint, the company has to dynamically price its products and determine inventory levels to minimize its expected cost. In our study, we tackle this complicated problem by assuming a single product, periodic review inventory model with finite multiple periods, and imperfect market information. We also assume no fixed cost in order to relax the complexity of the problem and perform numerical analysis for providing managerial implications. We investigate several research questions to extend our understanding of this complicated but very practical problem faced by numerous decision-makers in organizations. A discussion of possible optimal policies for this complicated unanswered problem with working capital constraints is explored.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital
AU  - Ismail Civelek
Y1  - 2014/12/11
PY  - 2014
N1  - https://doi.org/10.11648/j.ijber.s.2014030601.11
DO  - 10.11648/j.ijber.s.2014030601.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 1
EP  - 5
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.s.2014030601.11
AB  - The simultaneous stochastic pricing and inventory management with capacitated cash-on-hand is a profit maximization problem faced by a firm, which has limited working capital for its liabilities. In addition to this working capital constraint, the company has to dynamically price its products and determine inventory levels to minimize its expected cost. In our study, we tackle this complicated problem by assuming a single product, periodic review inventory model with finite multiple periods, and imperfect market information. We also assume no fixed cost in order to relax the complexity of the problem and perform numerical analysis for providing managerial implications. We investigate several research questions to extend our understanding of this complicated but very practical problem faced by numerous decision-makers in organizations. A discussion of possible optimal policies for this complicated unanswered problem with working capital constraints is explored.
VL  - 3
IS  - 6-1
ER  -

Copy | Download

Author Information

Ismail Civelek

Dept. of Management, Western Kentucky University, Bowling Green, KY, U. S. A.

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Ismail Civelek. (2014). A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital. International Journal of Business and Economics Research, 3(6-1), 1-5. https://doi.org/10.11648/j.ijber.s.2014030601.11

Copy | Download

ACS Style

Ismail Civelek. A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital. Int. J. Bus. Econ. Res. 2014, 3(6-1), 1-5. doi: 10.11648/j.ijber.s.2014030601.11

Copy | Download

AMA Style

Ismail Civelek. A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital. Int J Bus Econ Res. 2014;3(6-1):1-5. doi: 10.11648/j.ijber.s.2014030601.11

Copy | Download

@article{10.11648/j.ijber.s.2014030601.11,
  author = {Ismail Civelek},
  title = {A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital},
  journal = {International Journal of Business and Economics Research},
  volume = {3},
  number = {6-1},
  pages = {1-5},
  doi = {10.11648/j.ijber.s.2014030601.11},
  url = {https://doi.org/10.11648/j.ijber.s.2014030601.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.s.2014030601.11},
  abstract = {The simultaneous stochastic pricing and inventory management with capacitated cash-on-hand is a profit maximization problem faced by a firm, which has limited working capital for its liabilities. In addition to this working capital constraint, the company has to dynamically price its products and determine inventory levels to minimize its expected cost. In our study, we tackle this complicated problem by assuming a single product, periodic review inventory model with finite multiple periods, and imperfect market information. We also assume no fixed cost in order to relax the complexity of the problem and perform numerical analysis for providing managerial implications. We investigate several research questions to extend our understanding of this complicated but very practical problem faced by numerous decision-makers in organizations. A discussion of possible optimal policies for this complicated unanswered problem with working capital constraints is explored.},
 year = {2014}
}

Copy | Download

TY  - JOUR
T1  - A Simultaneous Pricing and Inventory Control Model for a Single Product with Capacitated Working Capital
AU  - Ismail Civelek
Y1  - 2014/12/11
PY  - 2014
N1  - https://doi.org/10.11648/j.ijber.s.2014030601.11
DO  - 10.11648/j.ijber.s.2014030601.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 1
EP  - 5
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.s.2014030601.11
AB  - The simultaneous stochastic pricing and inventory management with capacitated cash-on-hand is a profit maximization problem faced by a firm, which has limited working capital for its liabilities. In addition to this working capital constraint, the company has to dynamically price its products and determine inventory levels to minimize its expected cost. In our study, we tackle this complicated problem by assuming a single product, periodic review inventory model with finite multiple periods, and imperfect market information. We also assume no fixed cost in order to relax the complexity of the problem and perform numerical analysis for providing managerial implications. We investigate several research questions to extend our understanding of this complicated but very practical problem faced by numerous decision-makers in organizations. A discussion of possible optimal policies for this complicated unanswered problem with working capital constraints is explored.
VL  - 3
IS  - 6-1
ER  -

Copy | Download