Implementation of the Newsvendor Model with Clearance Pricing: How to (and How Not to) Estimate a Salvage Value

References

• Agrawal V., Seshadri S. Impact of uncertainty and risk aversion on price and order quantity in the newsvendor problem. Manufacturing Service Oper. Management (2000a) 2:410–413Link, Google Scholar
• Agrawal V., Seshadri S. Distribution free bounds for service constrained (Q, r) inventory systems. Naval Res. Logist. (2000b) 47:635–656Crossref, Google Scholar
• Armony M., Plambeck E. The impact of duplicate orders on demand estimation and capacity investment. Management Sci. (2005) 51(10):1505–1518Link, Google Scholar
• Axsater S. Using the deterministic EOQ formula in stochastic inventory control. Management Sci. (1996) 42:830–834Link, Google Scholar
• Balakrishnan A., Pangburn M. S., Stavrulaki E. Stack them high, let ’em fly: Lot-sizing policies when inventories stimulate demand. Management Sci. (2004) 50(5):630–644Link, Google Scholar
• Berry S., Levinsohn J., Pakes A. Automobile prices in market equilibrium. Econometrica (1995) 63(4):841–890Crossref, Google Scholar
• Bertsekas D. P.Dynamic Programming and Optimal Control (2000) (Athena Scientific, Belmont, MA) Google Scholar
• Bitran G. B., Mondschein S. V. Periodic pricing of seasonal products in retailing. Management Sci. (1997) 43:64–79Link, Google Scholar
• Bitran G. B., Caldentey R., Mondschein S. V. Coordinating clearance markdown sales of seasonal products in retail chains. Oper. Res. (1997) 46:609–624Link, Google Scholar
• Brumelle S. L., McGill J. I., Oum T. H., Sawaki K., Tretheway M. W. Allocation of airline seats between stochastically dependent demands. Transportation Sci. (1990) 24(3):183–192Link, Google Scholar
• Cachon G., Graves S., de Kok T. Supply chain coordination with contracts. The Handbook of Operations Research and Management Science: Supply Chain Management (2003) (Kluwer, Amsterdam, The Netherlands) 229–339Crossref, Google Scholar
• Cachon G., Terwiesch C., Xu Y. Retail assortment planning in the presence of consumer search. Manufacturing Service Oper. Management (2005) 7(4):330–346Link, Google Scholar
• Carr S., Lovejoy W. The inverse newsvendor problem: Choosing an optimal demand portfolio for capacitated resources. Management Sci. (2000) 46:912–927Link, Google Scholar
• Chintagunta P., Erdem T., Rossi P., Wedel M. Structural models in marketing: Review and assessment. Marketing Sci. (2006) 25(6):604–616Link, Google Scholar
• Cooper W. L., Homem-de-Mello T., Kleywegt A. J. Models of the spiral-down effect in revenue management. Oper. Res. (2006) 54(5):968–987Link, Google Scholar
• Dana J., Petruzzi N. Note: The newsvendor model with endogenous demand. Management Sci. (2001) 47:1488–1497Link, Google Scholar
• Dobson G. Sensitivity of the EOQ model to parameter estimates. Oper. Res. (1988) 36(4):570–574Link, Google Scholar
• Donohue K. Efficient supply contracts for fashion goods with forecast updating and two production modes. Management Sci. (2000) 46(11):1397–1411Link, Google Scholar
• Eeckhoudt L., Gollier C., Schlesinger H. Risk-averse (and prudent) newsboy. Management Sci. (1995) 41:786–794Link, Google Scholar
• Federgruen A., Heching A. Combined pricing and inventory control under uncertainty. Oper. Res. (1999) 47:454–475Link, Google Scholar
• Feng Y., Gallego G. Optimal starting times for end-of-season sales and optimal stopping times for promotional fares. Management Sci. (1995) 41(8):1371–1391Link, Google Scholar
• Fisher M., Raman A. Reducing the cost of demand uncertainty through accurate response to early sales. Oper. Res. (1996) 44:87–99Link, Google Scholar
• Fisher M., Rajaram K., Raman R. Optimizing inventory replenishment of retail fashion products. Manufacturing Service Oper. Management (2001) 3(3):230–241Link, Google Scholar
• Gallego G. New bounds and heuristics for (Q, r) policies. Management Sci. (1998) 44(2):219–233Link, Google Scholar
• Gallego G., van Ryzin G. Optimal dynamic pricing of inventories with stochastic demand over finite horizons. Management Sci. (1994) 40(8):999–1020Link, Google Scholar
• Hammond J., Raman A. (1994) . Sport Obermeyer Ltd. Harvard Business School Case 9-695–022, Harvard University, Cambridge, MAGoogle Scholar
• Hertz D. B., Schaffir K. H. A forecasting method for management of seasonal stylegoods inventories. Oper. Res. (1960) 8(1):45–52Link, Google Scholar
• Hoch S., Kim B., Montgomery A., Rossi P. Determinants of store-level price elasticity. J. Marketing (1995) 13(1):7–29Google Scholar
• Kouvelis P., Gutierrez G. The newsvendor problem in a global market: Optimal centralized and decentralized control policies for a two-market stochastic inventory system. Management Sci. (1997) 43(5):571–585Link, Google Scholar
• Lee H. Effective inventory and service management through product and process redesign. Oper. Res. (1996) 44(1):151–159Link, Google Scholar
• Lee H., Whang S. The impact of the secondary market on the supply chain. Management Sci. (2002) 48:719–731Link, Google Scholar
• Li L. The role of inventory in delivery-time competition. Management Sci. (1992) 38:182–197Link, Google Scholar
• Lippman S., McCardle K. The competitive newsboy. Oper. Res. (1995) 45:54–65Link, Google Scholar
• Lovejoy W. S. Myopic policies for some inventory models with uncertain demand distributions. Management Sci. (1990) 36:724–738Link, Google Scholar
• Monahan G., Petruzzi N., Zhao W. The dynamic pricing problem from a newsvendor’s perspective. Manufacturing Service Oper. Management (2004) 6(1):73–91Link, Google Scholar
• Mulhern F., Leone R. Implicit price bundling of retail products: A multiproduct approach to maximizing store profitability. J. Marketing (1991) 55:63–76Crossref, Google Scholar
• Nevo A. Measuring market power in the ready-to-eat cereal industry. Econometrica (2001) 69(2):307–342Crossref, Google Scholar
• Petruzzi N., Dada M. Pricing and the newsvendor problem: A review with extensions. Oper. Res. (1999) 47:183–193Link, Google Scholar
• Petruzzi N., Dada M. Information and inventory recourse for a two-market, price setting retailer. Manufacturing Service Oper. Management (2001) 3:242–263Link, Google Scholar
• Porteus E., Heyman D., Sobel M. Stochastic inventory theory. Handbooks in Operations Research and Management Science (1990) 2(North-Holland, Amsterdam, The Netherlands) 605–652Google Scholar
• Schweitzer M., Cachon G. Decision bias in the newsvendor problem with a known demand distribution: Experimental evidence. Management Sci. (2000) 46:404–420Link, Google Scholar
• Shang K., Song J. S. Newsvendor bounds and heuristic for optimal policies in serial supply chains. Management Sci. (2003) 49(5):618–638Link, Google Scholar
• Smith S., Achabal D. Clearance pricing and inventory policies for retail chains. Management Sci. (1998) 44:285–300Link, Google Scholar
• Tellis G. The price elasticity of selective demand: A meta analysis of econometric models of sales. J. Marketing Res. (1988) 25:331–341Crossref, Google Scholar
• Van Mieghem J. Coordinating investment, production and subcontracting. Management Sci. (1999) 45(7):954–971Link, Google Scholar
• Van Mieghem J., Rudi N. Newsvendor networks: Dynamic inventory management and capacity investments with discretionary activities. Manufacturing Service Oper. Management (2002) 4:313–335Link, Google Scholar
• van Ryzin G., Mahajan S. On the relationship between inventory costs and variety benefits in retail assortments. Management Sci. (1999) 45(11):1496–1509Link, Google Scholar
• Vives X.Oligopolistic Competition: Old Ideas and New Tools (1999) (MIT Press, Cambridge, MA) Google Scholar
• Zheng Y. S. On properties of stochastic inventory systems. Management Sci. (1992) 38:87–103Link, Google Scholar