Combined Sales Effort and Inventory Control under Demand Uncertainty
We study the joint inventory and sales effort management problems of a retailer in a broad context and investigate the optimal policies for a single item, periodic-review system. In each period, the demand is uncertain depending on the sales effort level exerted by the retailer, which incurs an asso...
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| Format: | Article |
| Language: | English |
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Wiley
2013-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2013/984513 |
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| _version_ | 1841524409746063360 |
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| author | Weili Xue Xiaolin Xu Ruxian Wang |
| author_facet | Weili Xue Xiaolin Xu Ruxian Wang |
| author_sort | Weili Xue |
| collection | DOAJ |
| description | We study the joint inventory and sales effort management problems of a retailer in a broad context and investigate the optimal policies for a single item, periodic-review system. In each period, the demand is uncertain depending on the sales effort level exerted by the retailer, which incurs an associated cost. The retailer’s objective is to find a joint optimal inventory replenishment and sales effort policy to maximize the discounted profit over a finite horizon. We first consider a basic setting with zero setup cost and no batch ordering, under which the base stock list sales effort policy is optimal. Two extensions are then investigated: (1) the case with nonzero setup cost, under which we show that (s,S,e) policy is optimal; and (2) the case with batch ordering, under which we prove the optimality of the (r,Nq,e) policy. Finally, we conduct numerical studies to provide additional managerial insights. |
| format | Article |
| id | doaj-art-a68fbe5ddf364d278f0ec7ddf25788a3 |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2013-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-a68fbe5ddf364d278f0ec7ddf25788a32025-02-03T05:53:23ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2013-01-01201310.1155/2013/984513984513Combined Sales Effort and Inventory Control under Demand UncertaintyWeili Xue0Xiaolin Xu1Ruxian Wang2School of Management and Engineering, Nanjing University, Nanjing 210093, ChinaSchool of Business, Nanjing University, Nanjing 210093, ChinaHewlett-Packard Laboratories, Hewlett-Packard Co., Palo Alto, CA 94304, USAWe study the joint inventory and sales effort management problems of a retailer in a broad context and investigate the optimal policies for a single item, periodic-review system. In each period, the demand is uncertain depending on the sales effort level exerted by the retailer, which incurs an associated cost. The retailer’s objective is to find a joint optimal inventory replenishment and sales effort policy to maximize the discounted profit over a finite horizon. We first consider a basic setting with zero setup cost and no batch ordering, under which the base stock list sales effort policy is optimal. Two extensions are then investigated: (1) the case with nonzero setup cost, under which we show that (s,S,e) policy is optimal; and (2) the case with batch ordering, under which we prove the optimality of the (r,Nq,e) policy. Finally, we conduct numerical studies to provide additional managerial insights.http://dx.doi.org/10.1155/2013/984513 |
| spellingShingle | Weili Xue Xiaolin Xu Ruxian Wang Combined Sales Effort and Inventory Control under Demand Uncertainty Discrete Dynamics in Nature and Society |
| title | Combined Sales Effort and Inventory Control under Demand Uncertainty |
| title_full | Combined Sales Effort and Inventory Control under Demand Uncertainty |
| title_fullStr | Combined Sales Effort and Inventory Control under Demand Uncertainty |
| title_full_unstemmed | Combined Sales Effort and Inventory Control under Demand Uncertainty |
| title_short | Combined Sales Effort and Inventory Control under Demand Uncertainty |
| title_sort | combined sales effort and inventory control under demand uncertainty |
| url | http://dx.doi.org/10.1155/2013/984513 |
| work_keys_str_mv | AT weilixue combinedsaleseffortandinventorycontrolunderdemanduncertainty AT xiaolinxu combinedsaleseffortandinventorycontrolunderdemanduncertainty AT ruxianwang combinedsaleseffortandinventorycontrolunderdemanduncertainty |