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作者 Chen, Li-Ming
書名 On the joint price and replenishment decisions for perishable products
國際標準書號 9781109686081
book jacket
說明 115 p
附註 Source: Dissertation Abstracts International, Volume: 71-04, Section: B, page:
Adviser: Amar Sapra
Thesis (Ph.D.)--University of Florida, 2009
A perishable item is characterized by its usefulness over a limited period of time, known as "life." Once the " life" is over, these items spoil, which obviously is a loss. The bottom line of a firm can improve significantly if some of this spoilage is prevented, i.e., if the perishable nature of products is managed properly. One mechanism by which this may be achieved is demand management using price. Through an appropriate selection of price, demand can be modulated to improve profit. The modulation of demand can not only increase revenue but also reduce shortage, holding, and spoilage costs. Potential spoilage due to limited life-time of the perishable products is the main reason demand management of perishable products is even more important than for non-perishable products. Whereas for non-perishable products the only cost of unsold inventory is the cost for holding inventory, for perishable products the unsold inventory not only incurs inventory holding cost but, in addition, with increasing age of the inventory the risk of it remaining unsold by the end of its lifetime increases. Therefore, this dissertation explores joint demand and replenishment decisions on the inventory control of perishable items with random demand
The first part of the dissertation is primarily motivated by a dilemma routinely faced by food retailers: when to replace old inventory of perishable products with fresh units when economies of scale exist in order placement. On one hand, economies of scale make it more attractive to place orders for large quantities. On the other hand, the demand for perishable products declines as their age approaches their lifetime; the reduction occurs since customers prefer fresh units and/or avoid units that are close to expiry. To answer the above question, we develop three models with increasing flexibility. In each model, we consider a finite horizon periodic review system for a single product at a single retailer with a fixed cost of order placement. The retailer faces price-dependent stochastic demand and loses excess demand. The goal of each model is to identify when to place an order, the quantity whenever an order is placed, and the price in each period, regardless of whether an order is placed or not
The second part of the dissertation examines joint replenishment and price decisions when economies of scale in order placement do not exist and demand is age-independent. We consider a periodic review model over finite horizon for a perishable product with fixed lifetime equal to two review periods such that excess demand in a period is backlogged. The optimal replenishment and demand management decisions for such a product depend on the issuing rule. For both first-in, first-out (FIFO) and last-in, first-out (LIFO) issuing rules, we obtain insights on the nature of these decisions. We find that the insights on the optimal policies for non-perishable products do not extend to perishable products with multi-period lifetime. For the FIFO rule, we also obtain bounds on both the optimal replenishment quantity as well as expected demand. Taking a weighted average of these bounds, we propose an approximate policy; computational experiments indicate that the policy performs within 2% of the optimal profit for a wide range of system parameters. We also conduct experiments to understand whether demand management bridges the profit gap between the FIFO and LIFO rules as well as to explore whether the profit improvement due to demand management favors one issuing rule over another
School code: 0070
Host Item Dissertation Abstracts International 71-04B
主題 Business Administration, Marketing
Engineering, Industrial
Operations Research
Alt Author University of Florida
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