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This paper considers dynamic pricing in a production system with a single product which is demanded by several customer classes. We seek the structure of the optimal policy assuming m available prices and n demand classes that differ based on the lost sales cost they impose on the system. The assumption of different available prices leads to dynamic pricing structure and the assumption of several demand classes leads to rationing which is proposed in the literature of revenue management. We found that an optimal policy structure exists for this combined problem. The optimal policy has a threshold form which lower thresholds are related to the rationing decision and upper thresholds are... 

We consider a production system with a single product and two classes of customers. Customers are segmented into two classes: 1) loyal and 2) occasional. Each class has a different shortage cost for the system. The demand of the customer classes is assumed to be stochastic and price sensitive, and distributed as a Poisson process. The objective is to determine the inventory rationing as well as pricing policies in order to maximise the profit function of the system. We formulate the problem as a Markov decision problem and characterise the optimal policies for pricing and inventory rationing. The joint pricing and rationing threshold policy is shown to be optimal. The performance of the...