The profit-maximization model for a multi-item distribution channel

Chen, Jen Ming; Chen, Tsung Hui

doi:10.1016/j.tre.2005.12.001

Cited by 39 publications

(14 citation statements)

References 35 publications

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“…Various aspects of the sustainability of distribution channels were discussed by Dent [23]. Different profit-maximization models for distribution channels were proposed in [24]. Several examples of using the linear programming methods in management were presented by Anderson et al [25].…”

Section: Theoretical Frameworkmentioning

confidence: 99%

Diversification Models of Sales Activity for Steady Development of an Enterprise

2016

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Abstract:The paper substantiates the importance of the optimal directionality choice of sales activity as one of the main lines of enterprise activity, the functioning of which should be complete, synchronous and complementary. Diversification is one of the powerful instruments to ensure the steady development of the sales activity of an enterprise. Three models of sales activity diversification of an enterprise are developed. The first model is based on unveiling the potential of sales channels and allows us to show the peculiarities of their use. The second model of the optimal quantitative distribution of production between sales channels is based on profit maximization. This approach not only takes into account the evaluation of the prescribed parameters of sales channels, but also provides the high profitability of each assortment item and of the whole enterprise. The third model of the optimal distribution of production between sales channels accounts for the experience of collaboration between the enterprise and sales channels during the past period and ensures the minimal risk and appropriate profitability for each sales channel. The proposed models are tested and compared to actual data of the enterprise; the advantages and peculiarities of each model are discussed.

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Section: Theoretical Frameworkmentioning

confidence: 99%

Diversification Models of Sales Activity for Steady Development of an Enterprise

2016

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“…Such a demand function can also be derived from the quadratic utility function of a representative consumer. See Bernstein and Federgruen [5], Chen and Chen [19], Chou and Parlar [25], Cruz and Tan [27], Eliashberg and Steinberg [33], Garcia-Gallego and Georgantzis [41], Giraud-Héraud, Hammoudi and Mokrane [42], Kopalle et al [50], Levis and Papageorgiou [55], Oxenstierna [64], Rothschild [75], Sanner and Schöler [77], and Sayman et al [78], for varied forms of this linear demand model.…”

Section: Deterministic Modelsmentioning

confidence: 99%

“…In Birge et al [11], Chen and Chen [19], Chen and Chen [20], and Levis and Papageorgiou [55], the concavity of the profit function implied the existence of a solution to a seller's pricing problem. The continuity of profit functions, concavity of demand functions, compactness and convexity of feasible strategy sets, are some of the conditions that may ensure the existence and uniqueness of an optimal solution, as seen in the discussion for the best response problem facing a seller, in Perakis and Sood [69] and Sood [83].…”

Section: Existence Of Solutions To Pricing Modelsmentioning

confidence: 99%

“…The continuity of profit functions, concavity of demand functions, compactness and convexity of feasible strategy sets, are some of the conditions that may ensure the existence and uniqueness of an optimal solution, as seen in the discussion for the best response problem facing a seller, in Perakis and Sood [69] and Sood [83]. In addition, a closed form expression was found for the optimal profits/prices obtained in some of models studied in Bernstein and Federgruen [8], Chen and Chen [19], Levis and Papageorgiou [55], and Weatherford [91].…”

Section: Existence Of Solutions To Pricing Modelsmentioning

confidence: 99%

“…Then in Maddah and Bish [59], the effects on the optimal profits/prices in response to the changes in unit costs and mean reservation prices are investigated (among others). Refer to Chen and Chen [19] for the sensitivity analyses done with respect to a wide variety of parameters, including various types of costs, demand rates, pricing and replenishment cycles, etc. In addition, when a game is considered (see, e.g.…”

Section: Sensitivity Analysismentioning

confidence: 99%

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