IDEAS home Printed from https://ideas.repec.org/a/ids/injams/v14y2022i2p114-135.html
   My bibliography  Save this article

Determining optimal inventory policy and sales price under promotional expenditure for some Veblen products

Author

Listed:
  • Anil Kumar Agrawal
  • Amit Ambar Gupta
  • Manu K. Vora

Abstract

This paper focuses on determining the optimal promotional expenses as well as optimal sales price and lot-sizing policies for Veblen products, generally being luxury goods consumed conspicuously. The price-demand relationships considered for the product are the ones suggested by Leibenstein (1950). The promotion is assumed to increase the product's perceived value facilitating in increasing the selling price without sacrificing the demand. The effect of promotional expenses has been analysed for the niche and mass markets using two different relationships. For obtaining the optimal pricing, lot-sizing and promotional expenses, a mathematical model has been developed and a GA-based heuristic is also proposed. Numerical examples are taken to illustrate the use of the proposed problem solving approaches and also to carry out sensitivity analyses. The results show almost no impact of variation in setup cost and carrying cost rate on optimal inventory policy, but of the product unit cost.

Suggested Citation

  • Anil Kumar Agrawal & Amit Ambar Gupta & Manu K. Vora, 2022. "Determining optimal inventory policy and sales price under promotional expenditure for some Veblen products," International Journal of Applied Management Science, Inderscience Enterprises Ltd, vol. 14(2), pages 114-135.
    • Handle: RePEc:ids:injams:v:14:y:2022:i:2:p:114-135
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=123061
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

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

    Corrections

    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:ids:injams:v:14:y:2022:i:2:p:114-135. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=286 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.