A multi-period ordering and clearance pricing model considering the competition between new and out-of-season products

作者：Li, Xiang; Sun, Guohua; Li, Yongjian^*

来源：Annals of Operations Research, 2016, 242(2): 207-221.

DOI：10.1007/s10479-013-1498-x

• Clearance pricing
• Perishable product
• Genetic algorithm
• Dynamic program

The joint management of pricing and inventory for perishable products has become an important problem for retailers. This paper investigates a multi-period ordering and clearance pricing model under consideration of the competition between new and out-of-season products. In each period, the ordering quantity of the new product and the clearance price of the out-of-season product are determined as decision variables before the demand is realized, and the unsold new product becomes the out-of-season one of the next period. We establish a finite-horizon Markov decision process model to formulate this problem and analyze its properties. A traditional dynamic program (DP) approach with two-dimensional search is provided. In addition, a myopic policy is derived in which only the profit of the current period is considered. Finally, we apply genetic algorithm (GA) to this problem and design a GA-based heuristic approach, showing by comparison among different algorithms that the GA-based heuristic approach is more performance sound than the myopic policy and much less time consuming than the DP approach.

• 出版日期2016-7
• 单位山东财经大学; 南开大学