Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/7643
Title: Pricing perishable products with compound poisson demands
Authors: Guo, P 
Lian, Z
Wang, Y 
Keywords: Revenue management
Dynamic pricing
Perishable inventory
Level-crossing
Issue Date: Jul-2011
Publisher: Cambridge University Press
Source: Probability in the Engineering and informational sciences, July 2011, v. 25, no. 3, p. 289-306 How to cite?
Journal: Probability in the engineering and informational sciences 
Abstract: We consider the dynamic pricing problem of perishable products in a system with a constant production rate. Potential demands arrive according to a compound Poisson process, and are price-sensitive. We carry out the sample path analysis of the inventory process and by using level-crossing method, we derive its stationary distribution given a pricing function. Based on the distribution, we express the average profit function. By a stochastic comparison approach, we characterize the pricing strategy given different customers willingness-to-pay functions. Finally, we provide an approximation algorithm to calculate the optimal pricing function.
URI: http://hdl.handle.net/10397/7643
ISSN: 0269-9648 (print)
1469-8951 (online)
DOI: 10.1017/S0269964811000027
Rights: © Cambridge University Press 2011
The following article "Pengfei Guo, Zhaotong Lian and Yulan Wang (2011). PRICING PERISHABLE PRODUCTS WITH COMPOUND POISSON DEMANDS. Probability in the Engineering and Informational Sciences, 25, pp 289-306. doi:10.1017/S0269964811000027." is available at http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=8310192
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