(s, S) Optimality in Joint Inventory-Pricing Control: An Alternate Approach

@article{Huh2008sSO,
  title={(s, S) Optimality in Joint Inventory-Pricing Control: An Alternate Approach},
  author={Woonghee Tim Huh and Ganesh Janakiraman},
  journal={Oper. Res.},
  year={2008},
  volume={56},
  pages={783-790}
}
We study a stationary, single-stage inventory system, under periodic review, with fixed ordering costs and multiple sales levers (such as pricing, advertising, etc.). We show the optimality of (s, S)-type policies in these settings under both the backordering and lost-sales assumptions. Our analysis is constructive and is based on a condition that we identify as being key to proving the (s, S) structure. This condition is entirely based on the single-period profit function and the demand model… 

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