Joint pricing and inventory controlin a Markov modulated demand environment

摘要

This paper deals with the simultaneous optimization of inventory position and price in a stochasticrncontinuous-review inventory system. We assume that the demand follows a Poisson distributionrnwhose rate is governed by an underlying Markov process representing the state of the world. Wernshow that the (approximate) expected profits are maximized by choosing a unique price for eachrnstate of the world. We study this expected profit function and derive properties that can be usedrnto find the optimal pricing and ordering policy.