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- W2152364332 abstract "Costs of many items drop systematically throughout their life-cycles, due to advances in technology and competition. Motivated by the management of service parts for some high-tech products, this paper studies inventory decisions for such items. In a periodic review setting with stochastic demand, we model the purchasing costs of successive periods as a stochastic and decreasing sequence. Unit selling price of the item is determined as some mark-up of the purchasing cost and, hence, will change over time as well. We consider two specific mark-up models: (1) purchasing cost plus constant-dollar-amount mark-up, and (2) purchasing cost plus constant-percentage mark-up. To maximize the total discounted expected profit, we derive conditions under which myopic policies are optimal for the systems." @default.
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- W2152364332 date "2012-02-01" @default.
- W2152364332 modified "2023-09-26" @default.
- W2152364332 title "INVENTORY DECISIONS WITH DECREASING PURCHASING COSTS" @default.
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- W2152364332 doi "https://doi.org/10.1142/s0217595912400027" @default.
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