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Abstract
We formulate and analyze two models for determining the optimal pricing, order quantity and replenishment period for items whose demand function is separable into components of price and inventory age. The first model assumes a multiplicative demand function. We provide conditions, which are satisfied by most common pricedependent demand functions, to reduce the threevariable profit maximization problem into a singlevariable problem, which can be solved using an efficient linesearch method. Next, we show that a genuine additive model cannot exist, and instead suggest and analyze a pseudoadditive model. However, this model is more limited than the multiplicative model in its ability to incorporate various combinations of price and inventory age effects, and reduction of the maximization problem into a singlevariable problem is more complicated, except in the case of a linear price effect, which is further analyzed. For both models, we show that the optimal solution satisfies the firstorder condition for equilibrium under a monopoly, with a modification that includes inventory holding costs. We solve numerical examples to illustrate the solution procedures.
Original language  American English 

State  Published  2014 
Event  ORSIS  Tel Aviv, Israel Duration: 31 Mar 2014 → 31 Mar 2014 
Conference
Conference  ORSIS 

Country/Territory  Israel 
City  Tel Aviv 
Period  31/03/14 → 31/03/14 
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Dive into the research topics of 'Optimal ordering and pricing policy for demand functions that are separable into price and inventory age'. Together they form a unique fingerprint.Activities
 2 Organizing a conference, workshop, ...

ORSIS National Meeting
Tal Avinadav (Participation  Conference participant)
21 Apr 2014 → 22 Apr 2014Activity: Participating in or organizing an event › Organizing a conference, workshop, ...

ORSIS
Avi Herbon (Participation  Conference participant)
31 Mar 2014Activity: Participating in or organizing an event › Organizing a conference, workshop, ...