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Multi-product budget-constrained acquisition and pricing with uncertain demand and supplier quantity discounts

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  • Shi, Jianmai
  • Zhang, Guoqing

Abstract

We consider the joint acquisition and pricing problem where the retailer sells multiple products with uncertain demands and the suppliers provide all unit quantity discounts. The problem is to determine the optimal acquisition quantities and selling prices so as to maximize the retailer's expected profit, subject to a budget constraint. This is the first extension to consider supplier discounts in the constrained multi-product newsvendor pricing problem. We establish a mixed integer nonlinear programming (MINLP) model to formulate the problem, and develop a Lagrangian-based solution approach. Computational results for the test problems involving up to thousand products are reported, which show that the proposed approach can obtain high quality solutions in a very short time.

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  • Shi, Jianmai & Zhang, Guoqing, 2010. "Multi-product budget-constrained acquisition and pricing with uncertain demand and supplier quantity discounts," International Journal of Production Economics, Elsevier, vol. 128(1), pages 322-331, November.
    • Handle: RePEc:eee:proeco:v:128:y:2010:i:1:p:322-331
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    Cited by:

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    4. Wang, Daao & Dimitrov, Stanko & Jian, Lirong, 2020. "Optimal inventory decisions for a risk-averse retailer when offering layaway," European Journal of Operational Research, Elsevier, vol. 284(1), pages 108-120.
    5. Serel, Doğan A., 2012. "Multi-item quick response system with budget constraint," International Journal of Production Economics, Elsevier, vol. 137(2), pages 235-249.
    6. Yong Zhang & Xingyu Yang & Weiguo Zhang & Weiwei Chen, 2020. "Online ordering rules for the multi-period newsvendor problem with quantity discounts," Annals of Operations Research, Springer, vol. 288(1), pages 495-524, May.
    7. Wang, Jian-Cai & Lau, Amy Hing-Ling & Lau, Hon-Shiang, 2012. "Practical and effective contracts for the dominant retailer of a newsvendor product with price-sensitive demand," International Journal of Production Economics, Elsevier, vol. 138(1), pages 46-54.
    8. Ke, Ginger Y. & Bookbinder, James H., 2012. "Discount pricing for a family of items: The supplier's optimal decisions," International Journal of Production Economics, Elsevier, vol. 135(1), pages 255-264.
    9. Zhang, Guoqing & Shi, Jianmai & Chaudhry, Sohail S. & Li, Xindan, 2019. "Multi-period multi-product acquisition planning with uncertain demands and supplier quantity discounts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 132(C), pages 117-140.
    10. Feng Tao & Yanhong Xie & Yao-Yu Wang & Fujun Lai & Kin Keung Lai, 2022. "Contract strategies in competitive supply chains subject to inventory inaccuracy," Annals of Operations Research, Springer, vol. 309(2), pages 641-661, February.
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