Inventory policies for two products under Poisson demand: Interaction between demand substitution, limited storage capacity and replenishment time uncertainty

Burnetas, Apostolos; Kanavetas, Odysseas

doi:10.1002/nav.21788

Cited by 7 publications

(2 citation statements)

References 21 publications

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“…While Lin & Sibdari (2009) deployed discrete choice model, Etebari (2020) used the nested logit model to capture the customer's choice process rather than the multinomial logit model considering that the latter one suffers from the independence of irrelevant alternatives limitation. The nature of demand pattern considered in the literature also spans from deterministic (Gurnani & Drezner, 2000;Lang & Domschke, 2010) to probabilistic (Pentico, 1974;Pasternack & Drezner, 1991;Kraeselburd et al 2004;Rao & Swaminathan, 2004) and from Poisson distribution (Yadavalli et al 2006;Xu et al 2010;Burnetas & Kanavetas, 2018) governed to innovation diffusion governed (Chanda, 2011;Chanda & Agrawal, 2014;Chanda & Das, 2015).…”

Section: Articles Related To Choice Modelsmentioning

confidence: 99%

The First Half-Century of Decision Modelling for Substitutable Products: A Literature Review and Bibliographic Analysis

Nagpal

Chanda

Seth

2021

OSCM: An Int. Journal

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Due to the resource constraints of the factors of production (land, capital, capacity, etc.), the firms have to rationalize the assortment of products that they deal in. In such a situation, a consumer whose requirement for a preferred product may not get served from the existing inventories with the seller, may go for some other alternative product. A lot of research work in the past has been done on this demand substitution and its implications upon the assortment optimization, inventory optimization and price optimization. The first work on modelling for substitutable demand is attributed to 1970. Considering the same, the authors decided to do a review of the half-century of work on the modelling for substitutable products. The paper gives a detailed analysis of the published research articles around demand substitution and also discusses the achievements of the existing research. The article also gives a few possibilities of the future extensions to this body of knowledge on the management of substitutable products.

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Section: Articles Related To Choice Modelsmentioning

confidence: 99%

The First Half-Century of Decision Modelling for Substitutable Products: A Literature Review and Bibliographic Analysis

Nagpal

Chanda

Seth

2021

OSCM: An Int. Journal

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“…Gurgur and Altiok (2007) studied a multiproduct inventory system with decentralized two-card Kanban control policies and presented a robust approximation algorithm. Burnetas and Kanavetas (2018) considered a two-substitutable products inventory problem with Poisson demands. The above papers consider only one player.…”

Section: Literature Reviewmentioning

confidence: 99%

Purchase and retrieval competition for seasonal produce

Zhang

et al. 2020

Naval Research Logistics

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We study the competition problem of purchase and multiretrieval of perishable seasonal produce, where wholesalers purchase and stock their products in the first period, and then retrieve and sell them in subsequent periods. We first consider the duopoly case and assume that the prices are exogenous and fluctuate. In each period, after the price realization, the wholesalers retrieve some stock from their warehouses to satisfy their demands. One wholesaler's unsatisfied customers can switch to another and be satisfied by its left retrieved products. Any unsold retrieved stock has no salvage value and any unsatisfied demand is lost. The unretrieved stock is carried to the next period at a perishable rate. The wholesalers compete for the substitute demand by determining their own purchase and retrieval quantities. We show the existence and uniqueness of a pure‐strategy Nash equilibrium, and that the Nash equilibrium strategy has the simple “sell‐down‐to” structure. We also consider the general N‐person game and show the existence of the Nash equilibrium, and characterize the structure of the equilibrium strategy for the symmetric case. In addition, we consider the case with endogenous prices, and show that the problem reduces to a repeated newsvendor game with price and inventory competition. We derive the conditions under which a unique Nash equilibrium exists and characterize the equilibrium strategy. Finally, we conduct numerical studies to examine the impacts of the model parameters on the equilibrium outcomes and to generate managerial insights.

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Pricing heterogeneous products to heterogeneous customers who buy sequentially

Hassin,

Puerto

2024

Ann Oper Res

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This paper considers optimal pricing in a system with limited substitutable resources, such as certain goods or services. Prices for the different resources have to be set and then customers with heterogeneous preferences show up sequentially. Customers, of n types, select an item from the m available resources, depending on their valuations of the resources and the prices. The goal is to analyze this optimization problem, characterize a set of candidates to optimal solutions and provide methods for solving it. We prove that this problem is NP-hard to approximate within a factor $$O(n^{1-\varepsilon })$$ O ( n 1 - ε ) for any fixed $$\varepsilon >0$$ ε > 0 . Another important contribution is to prove that, the space of prices (which in principle is a continuous domain in $${\mathbb {R}}^m$$ R m ), can be reduced to a finite set of vectors of cardinality $$m^{m-2}n^m2^m$$ m m - 2 n m 2 m . For a deterministic version of the problem, where the customer types are known to the firm, we provide a mathematical program that chooses the best set of prices. We report extensive computational results showing the usefulness of our exact approach to solve medium size problems with up to 200 customers and different assortments of products and customer types. We then show how to approximate the stochastic model by a small number of solutions of deterministic scenarios solved using a mixed-integer linear program.

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Inventory policies for two products under Poisson demand: Interaction between demand substitution, limited storage capacity and replenishment time uncertainty

Cited by 7 publications

References 21 publications

The First Half-Century of Decision Modelling for Substitutable Products: A Literature Review and Bibliographic Analysis

The First Half-Century of Decision Modelling for Substitutable Products: A Literature Review and Bibliographic Analysis

Purchase and retrieval competition for seasonal produce

Pricing heterogeneous products to heterogeneous customers who buy sequentially

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