| Title |
An integrated revenue management framework for a firm's greening, pricing and inventory decisions |
| ID_Doc |
75935 |
| Authors |
Raza, SA; Rathinam, S; Turiac, M; Kerbache, L |
| Title |
An integrated revenue management framework for a firm's greening, pricing and inventory decisions |
| Year |
2018 |
| Published |
|
| DOI |
10.1016/j.ijpe.2016.11.014 |
| Abstract |
There is a growing interest on developing efficient ways of incorporating environmental considerations into business practices in order to meet both consumers' demand for green products/services, and the firms' sustainable profitability. The main contribution of this article is in developing an integrated revenue management framework to address a firm's greening (investment) effort, pricing and inventory decisions. It is assumed that the firm inaugurates a green product along with its existing product. Even though the firm offers both the green and regular product at differentiated prices, the market segmentation as a result of this price differentiation is regarded as imperfect. This imperfect market segmentation causes a demand leakage mainly due to the heterogeneity among the customers' willingness-to-pay. These effects are included in our proposed model and simplified analytical solutions are developed to solve the same. Additional scenarios where a firm experiences a price dependent stochastic demand with an unknown distribution is also modeled. This scenario is addressed using a distribution-free approach based on Scarf' s rule. The performance of the proposed methods and the significance of the modeling framework are finally corroborated through several simulations. This analysis provides a sustainable environment, production and retailing framework while still augmenting profitability using fundamental tools from revenue management. |
| Author Keywords |
Environment; Newsvendor problem; Pricing; Market segmentation; Distribution-free approach |
| Index Keywords |
Index Keywords |
| Document Type |
Other |
| Open Access |
Open Access |
| Source |
Science Citation Index Expanded (SCI-EXPANDED); Social Science Citation Index (SSCI) |
| EID |
WOS:000418974300029 |
| WoS Category |
Engineering, Industrial; Engineering, Manufacturing; Operations Research & Management Science |
| Research Area |
Engineering; Operations Research & Management Science |
| PDF |
|