IDEAS home Printed from https://ideas.repec.org/a/taf/uiiexx/v47y2015i8p851-864.html
   My bibliography  Save this article

A stochastic inventory model with price quotation

Author

Listed:
  • Kyoung-Kuk Kim
  • Jun Liu
  • Chi-Guhn Lee

Abstract

This article studies a single-item periodic-review inventory problem with stochastic demand, uncertain price, and price search cost. At the beginning of a period, an inventory manager has to decide, considering the current inventory level, whether a price should be searched for at a non-zero cost. Once the price is known, she will have to decide the order size. For tractability the number of realizable prices is limited to two and (r, S1, S2)-type policies are considered, where r is the threshold for the price search decision and Si is the order-up-to level for price pi for i = 1, 2. Although the problem is significantly simplified, it still allows for price speculations by the inventory manager; i.e., she requests a quote but may not buy. The properties of long-run average costs are studies and optimization algorithms are presented. Numerical studies show the effectiveness of the proposed policy compared with classic (s, S)-type policy and its natural three-parameter extension.

Suggested Citation

  • Kyoung-Kuk Kim & Jun Liu & Chi-Guhn Lee, 2015. "A stochastic inventory model with price quotation," IISE Transactions, Taylor & Francis Journals, vol. 47(8), pages 851-864, August.
    • Handle: RePEc:taf:uiiexx:v:47:y:2015:i:8:p:851-864
    DOI: 10.1080/0740817X.2014.955598
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/0740817X.2014.955598
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/0740817X.2014.955598?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    More about this item

    Statistics

    Access and download statistics

    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:taf:uiiexx:v:47:y:2015:i:8:p:851-864. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/uiie .

    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.