IDEAS home Printed from
   My bibliography  Save this article

Pricing, replenishment, and timing of selling in a market with heterogeneous customers


  • Anily, Shoshana
  • Hassin, Refael


We consider a deterministic pricing and replenishment model in which the retailer advertises a fixed price and the selling schedule, and customers can advance or delay their time of purchase incurring holding or shortage costs. We investigate the impact of heterogeneity in the customers' reservation prices. We show that the resulting optimal solution may be very different from that obtained when customers are homogeneous. We identify nine types of possible optimal sales strategies, and compute their profits. In particular, the solution may contain sales at several discrete points of time between consecutive replenishment epochs with no sales between them.

Suggested Citation

  • Anily, Shoshana & Hassin, Refael, 2013. "Pricing, replenishment, and timing of selling in a market with heterogeneous customers," International Journal of Production Economics, Elsevier, vol. 145(2), pages 672-682.
  • Handle: RePEc:eee:proeco:v:145:y:2013:i:2:p:672-682 DOI: 10.1016/j.ijpe.2013.05.021

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Adam J. Mersereau & Dan Zhang, 2012. "Markdown Pricing with Unknown Fraction of Strategic Customers," Manufacturing & Service Operations Management, INFORMS, vol. 14(3), pages 355-370, July.
    2. Eppen, Gary D & Liebermann, Yehoshua, 1984. "Why Do Retailers Deal? An Inventory Explanation," The Journal of Business, University of Chicago Press, vol. 57(4), pages 519-530, October.
    3. Rose Neng Lai & Ko Wang & Yuqing Zhou, 2004. "Sale before Completion of Development: Pricing and Strategy," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(2), pages 329-357, June.
    4. Yunzeng Wang & Yigal Gerchak, 1996. "Periodic Review Production Models with Variable Capacity, Random Yield, and Uncertain Demand," Management Science, INFORMS, vol. 42(1), pages 130-137, January.
    5. Qian Liu & Garrett J. van Ryzin, 2008. "Strategic Capacity Rationing to Induce Early Purchases," Management Science, INFORMS, vol. 54(6), pages 1115-1131, June.
    6. Gullu, Refik & Onol, Ebru & Erkip, Nesim, 1999. "Analysis of an inventory system under supply uncertainty," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 377-385, March.
    7. John Conlisk & Eitan Gerstner & Joel Sobel, 1984. "Cyclic Pricing by a Durable Goods Monopolist," The Quarterly Journal of Economics, Oxford University Press, vol. 99(3), pages 489-505.
    8. Xuanming Su, 2007. "Intertemporal Pricing with Strategic Customer Behavior," Management Science, INFORMS, vol. 53(5), pages 726-741, May.
    9. Glazer, Amihai & Hassin, Refael, 1990. "Optimal sales to users who hold inventory," Economics Letters, Elsevier, vol. 34(3), pages 215-220, November.
    10. Joel Sobel, 1984. "The Timing of Sales," Review of Economic Studies, Oxford University Press, vol. 51(3), pages 353-368.
    11. Xuanming Su & Fuqiang Zhang, 2009. "On the Value of Commitment and Availability Guarantees When Selling to Strategic Consumers," Management Science, INFORMS, vol. 55(5), pages 713-726, May.
    12. Guoming Lai & Laurens G. Debo & Katia Sycara, 2010. "Buy Now and Match Later: Impact of Posterior Price Matching on Profit with Strategic Consumers," Manufacturing & Service Operations Management, INFORMS, vol. 12(1), pages 33-55, December.
    13. Xuanming Su & Fuqiang Zhang, 2008. "Strategic Customer Behavior, Commitment, and Supply Chain Performance," Management Science, INFORMS, vol. 54(10), pages 1759-1773, October.
    14. Igal Hendel & Aviv Nevo, 2004. "Intertemporal Substitution and Storable Products," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 536-547, 04/05.
    15. Anantaram Balakrishnan & Michael S. Pangburn & Euthemia Stavrulaki, 2004. ""Stack Them High, Let 'em Fly": Lot-Sizing Policies When Inventories Stimulate Demand," Management Science, INFORMS, vol. 50(5), pages 630-644, May.
    16. Yossi Aviv & Amit Pazgal, 2008. "Optimal Pricing of Seasonal Products in the Presence of Forward-Looking Consumers," Manufacturing & Service Operations Management, INFORMS, vol. 10(3), pages 339-359, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Yang, Daojian & Qi, Ershi & Li, Yajiao, 2015. "Quick response and supply chain structure with strategic consumers," Omega, Elsevier, vol. 52(C), pages 1-14.
    2. Song, Yanan & Zhao, Xiaobo, 2016. "Strategic customer behavior facing possible stockout: An experimental study," International Journal of Production Economics, Elsevier, vol. 180(C), pages 57-67.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:145:y:2013:i:2:p:672-682. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.