Dynamic inventory control game for perishable products with concurrent probabilistic demands from two fare classes
Document Type
Journal article
Source Publication
International Journal of Inventory Research
Publication Date
2013
Volume
2
Issue
1/2
First Page
82
Last Page
107
Keywords
game theory; inventory control; perishable products; Nash equilibrium; cooperation; probabilistic demands; substitutable products; transferred demand; seller revenue; optimal control
Abstract
With the existence of uncertain demands and competitors, a seller's inventory control policy for perishable products can significantly affect the seller and consumers due to its effects on the seller's revenue, transferred demand, and product availability. In this paper, we consider two sellers selling substitutable products in a market where the ordering requests from different fare classes arrive concurrently. We formulate this problem as a two-player two-fare-class dynamic inventory control game, and examine the optimal accept/reject policies in both non-cooperative and cooperative situations. Our results shed light on three issues: the impact of transferred demand on a seller's revenue, the structure of the optimal inventory control policy, and the importance of cooperation for sellers in the presence of transferred demand.
DOI
10.1504/IJIR.2013.058342
Print ISSN
17466962
E-ISSN
17466970
Publisher Statement
Copyright © 2013 Inderscience Enterprises Ltd.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Song, J., & Liang, L. (2013). Dynamic inventory control game for perishable products with concurrent probabilistic demands from two fare classes. International Journal of Inventory Research, 2(1/2), 82-107. doi: 10.1504/IJIR.2013.058342