On a Class of Optimal Stock Depletion Policies
Published Online:1 Sep 1966https://doi.org/10.1287/mnsc.13.1.120
Abstract
The following problem is solved by the calculus of variations: How should a monopolist sell off a fixed stock of a commodity so as to maximize the present value of profits if demand per time unit is linear in price and subject to exogenous growth, deterioration is proportional to remaining stock, and carrying cost is proportional to stock.
