Dynamic pricing with capacity constraints and inventory replenishment
This paper describes a fast algorithm for solving a capacitated dynamic pricing problem where the producer has the ability to store inventory. The pricing problem described is a quadratic programming problem with a structure that can be solved e ectively by a dual algorithm. The proposed algorithm gives a solution satisfying the Karush-Kuhn-Tucker conditions. This, combined with the fact that the problem has a convex feasible region with a concave objective function which we want to maximize, implies that the proposed algorithm gives a globally optimal solution. The algorithm is illustrated by numerical examples for both the single-item and the multi-item cases.
Document typePeer reviewed
Document versionFinal PDF
SourceMathematics for Applications. 2014, 3, č. 2, s. 143-166. ISSN 1805-3629.
- 2014/2