Stocking and Pricing Reusable Products for Subscribers

摘要

We consider a firm that offers reusable products to a fixed number of subscribers, who are sensitive to price and quality of service. Each subscriber switches between two states "On" and "Off", using the product in the On state if feasible, until turned Off, and repeating. We analyze the asymptotic regime where the number of potential subscribers increases without bound, and use it to compute the optimal number of units that must be stocked and the optimal price to be set by the manager.