Joint Price and Reorder Point Determination for Profit Maximization

• Manuel Cardós Carboneras ^[1] ; Fuente Aragón, María Victoria de la ^[2] ; Lorenzo Ros-McDonnell ^[2]
  1. [1] Universidad Politécnica de Valencia

     Universidad Politécnica de Valencia

     Valencia, España

     
  2. [2] Universidad Politécnica de Cartagena

     Universidad Politécnica de Cartagena

     Cartagena, España

     
• Localización: Advances in engineering networks: proceedings of the 12th International Conference on Industrial Engineering and Industrial Management / Rodolfo de Castro Vila (ed. lit.), Gerusa Giménez Leal (ed. lit.), 2020, ISBN 978-3-030-44530-0, págs. 207-216
• Idioma: inglés
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• Resumen

  • This paper proposes a novel, exact procedure for the joint determination of the reorder point and the price, given that demand is a power function of price and the objective is profit maximization. Some examples illustrate the effect of elasticity on the existence of a profit optimum; in fact just elastic demand items present such optima. The procedure presented in this paper overcomes others in the literature because an exact profit function is used instead of an approximate one.