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Revenue Management and Stock Allocation Policies in a Production System with a Single Product

Ahmadi, Mehdi | 2014

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  1. Type of Document: Ph.D. Dissertation
  2. Language: Farsi
  3. Document No: 46687 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Shavandi, Hassan
  7. Abstract:
  8. Consider a production system with a single product which is demanded by n different customer classes and each customer class has a Poisson demand with rate of λ_i for class i customer class. The important note is that different customer classes have different values for the system and they have different lost sales cost for the system. Therefore, the optimal decision is not necessarily satisfying the customer which arrived sooner. The main idea in this thesis is that for this problem which needs rationing in stock out situations, we can use pricing in line with rationing.
    First, we have formulated the problem for the case of two customer classes and two available prices. We formulated the problem by Markov Decision Process (MDP) and find the structure of optimal policy. After that we found the structure of optimal policy for the general case of n different customer classes and m possible prices. Different possible prices lead to dynamic pricing and different customer classes leads to rationing. In our problem which has these two assumptions, optimal solution is a combination of rationing and pricing in which the pricing thresholds are higher than rationing thresholds. In a numerical study we have showed that this joint policy outperforms the just rationing and just pricing policies. Finally, we have presented a heuristic algorithm for faster calculating of the thresholds
  9. Keywords:
  10. Revenue Management ; Dynamic Pricing ; Markov Process ; Single Product Production System ; Dynamic Pricing ; Stock Rationing ; Several Customer Classes

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