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Optimal firm's policy under lead time-and price-dependent demand: interest of customers rejection policy

Author

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  • Abduh Sayid

    (G-SCOP_GCSP - Gestion et Conduite des Systèmes de Production - G-SCOP - Laboratoire des sciences pour la conception, l'optimisation et la production - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

  • Yannick Frein

    (G-SCOP_GCSP - Gestion et Conduite des Systèmes de Production - G-SCOP - Laboratoire des sciences pour la conception, l'optimisation et la production - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique - UGA [2016-2019] - Université Grenoble Alpes [2016-2019])

  • Ramzi Hammami

    (ESC [Rennes] - ESC Rennes School of Business)

Abstract

Considering a lead-time-and price-sensitive demand, we investigate whether a client rejection policy, modeled as M/M/1/K system, can be more profitable than an all-client acceptance policy, modeled as M/M/1 system. We provide analytical insights for the cases with and without holding and penalty costs by comparing M/M/1/1 to M/M/1 models.

Suggested Citation

  • Abduh Sayid & Yannick Frein & Ramzi Hammami, 2016. "Optimal firm's policy under lead time-and price-dependent demand: interest of customers rejection policy," Post-Print hal-01576828, HAL.
    • Handle: RePEc:hal:journl:hal-01576828
    Note: View the original document on HAL open archive server: https://hal.univ-grenoble-alpes.fr/hal-01576828
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    File URL: https://hal.univ-grenoble-alpes.fr/hal-01576828/document
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    References listed on IDEAS

    as
    1. Liming Liu & Mahmut Parlar & Stuart X. Zhu, 2007. "Pricing and Lead Time Decisions in Decentralized Supply Chains," Management Science, INFORMS, vol. 53(5), pages 713-725, May.
    2. So, Kut C. & Song, Jing-Sheng, 1998. "Price, delivery time guarantees and capacity selection," European Journal of Operational Research, Elsevier, vol. 111(1), pages 28-49, November.
    3. Abduh Sayid Albana & Yannick Frein & Ramzi Hammami, 2016. "Study of Client Reject Policies under Lead-Time and Price Dependent Demand," Working Papers hal-01250835, HAL.
    4. Roman Kapuscinski & Sridhar Tayur, 2007. "Reliable Due-Date Setting in a Capacitated MTO System with Two Customer Classes," Operations Research, INFORMS, vol. 55(1), pages 56-74, February.
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