Title: Retailer's reactions in respect to a price increase: pricing and ordering decisions

Authors: Ata Allah Taleizadeh; Fatemeh Bayatloo

Addresses: School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran ' School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran

Abstract: This paper considers that the wholesale price increases and explores a retailer's reactions to different scenarios that may occur and are organised by fixed setup epochs, fixed and flexible retail price. Additionally, in this special condition of price increase, deviation from the basic plan will result in a penalty for retailer and it is considered as penalty cost in objective function. The retailer profit is maximised through the determination of retailer ordering and pricing decisions. This paper considers that the demand of customers is price-dependent. A mathematical model and closed form solution is proposed. Furthermore, a sensitivity analysis on the main parameters is done.

Keywords: temporary price increase; supply chain; price-dependent demand.

DOI: 10.1504/IJSCIM.2017.092340

International Journal of Supply Chain and Inventory Management, 2017 Vol.2 No.2, pp.178 - 195

Received: 20 Mar 2017
Accepted: 09 Apr 2018

Published online: 30 May 2018 *

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