Abstract
We address the simultaneous determination of pricing, production, and capacity investment decisions by a monopolistic firm in a multi-period setting under demand uncertainty. We analyze the optimal decision with particular emphasis on the relationship between price and capacity. We consider models that allow for either bi-directional price changes or models with markdowns only, and in the latter case we prove that capacity and price are strategic substitutes.
Full Citation
.
“A Note on the Relationship Among Capacity, Pricing, and Inventory in a Make-to-Stock System.”
Production and Operations Management
vol.
20
,
(January 01, 2011):
143
-151
.