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- Title
On the Optimality of the Multi-Product EOQ Model with Pricing Consideration.
- Authors
Hojung Shin; Soohoon Park
- Abstract
Two previous studies that attempted to generalize the deterministic joint pricing-inventory decision model are reevaluated. We prove analytically that even in a single-product environment, the EOQ model with constant priceelastic demand cannot find optimal solutions unless two optimality conditions associated with price elasticity and demand magnitude are satisfied. Due to the inexistence of the general optimality for the problem, demand function and price elasticity must be evaluated and bounded properly to use the methods proposed in the previous studies.
- Subjects
OPTIMAL control theory; MULTIPRODUCT firms; ECONOMIC models; DECISION making; ELASTICITY (Economics); DEMAND function
- Publication
Management Science & Financial Engineering, 2012, Vol 18, Issue 1, p21
- ISSN
2287-2043
- Publication type
Article
- DOI
10.7737/MSFE.2012.18.1.021