Zero Ending Inventory Dynamic Pricing Model under Stochastic Demand, Fixed Lifetime Product, and Fixed Order Quantity

摘要

We consider a perishable product with a fixed shelf life under fixed-order quantity policy. The demand is a compound Poisson process with a price sensitive intensity and a continuous batch size distribution. A model of retail price control is proposed allowing us to sell a lot without leftovers almost surely during the product’s lifetime. A diffusion approximation of the demand process is used to find the probabilistic characteristics of the selling process and the expected revenue.