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Optimal strategies for price, warranty length, and production rate of a new product with learning production cost

Faridimehr, S ; Sharif University of Technology

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  1. Type of Document: Article
  2. Abstract:
  3. This study investigates optimal strategies for price, warranty length, and production rate of a new product in which both static markets for non-durable and dynamic markets for durable products are involved. The mathematical model incorporates both the demand and the cost functions including production, warranty length, and inventory costs. Using the maximum principle approach, the optimal strategies and interactions among price, warranty length, and production rate in both markets are analyzed using some propositions. The analysis shows that to maximize profits in all cases, the price, the warranty length, and the production rate all must go up simultaneously, or one of them must increase and the other two must decrease concurrently
  4. Keywords:
  5. Dynamic markets ; Optimal strategy ; Static markets ; Commerce ; Cost functions ; Functions ; Maximum principle ; Optimal systems ; Durable products ; Dynamic market ; Inventory costs ; Optimal strategies ; Production rates ; Warranty lengths ; Costs ; Cost-benefit analysis ; Numerical model ; Optimization ; Production cost ; Profitability
  6. Source: Scientia Iranica ; Volume 20, Issue 6 , 2013 , Pages 2247-2258 ; 10263098 (ISSN)
  7. URL: http://www.scientiairanica.com/en/ManuscriptDetail?mid=93