The Human Development Index Adjusted for Efficient Resource Utilization

human development index, data envelopment analysis, efficiency, congestion and scale economics

Price, rebate and order quantity decisions in a newsvendor framework with rebate-dependent recapture of lost sales

This paper analyses the decision situation of a retailer that faces single period uncertainty and price-dependent demand, with an opportunity to backlog the lost sales by offering some incentive for waiting. The backlog fill rate is modelled as a function of the proportion of the rebate to the price

Pricing and rebate policies in the two-echelon supply chain with asymmetric information under price-dependent, stochastic demand

This paper analyzes the manufacturers' strategy of optimizing the direct rebate to the final customer and the wholesale price to a profit-maximizing retailer with a price-dependent stochastic demand. The manufacturer possesses full information about the cost and the functional relationship among demand, price and rebate, but may or may not know about the nature of the underlying demand uncertainty faced by the retailer. The conditions under which a retailer benefits from passing on such information are identified. The main features of the model are illustrated analytically and numerically, using linear or iso-elastic demand functions, with additive or multiplicative error structures. Several important implications have been derived, especially those dealing with price and rebate pass-throughs and with the cost to the manufacturer of asymmetric information.

Risk tolerance and a retailer's pricing and ordering policies within a newsvendor framework

This paper evaluates the pricing and ordering policies of a retailer, facing a price-dependent stochastic demand, within a newsvendor framework, under different degrees of risk tolerance and under a variety of optimizing objectives. These are (i) maximizing expected profit, for a retailer who may be risk-seeker, risk-averse or risk neutral; (ii) deriving a maximin strategy of maximizing a minimum guaranteed profit and (iii) modeling the probability of exceeding a target profit, as a constraint or as an objective. Some analytical properties and numerical examples illustrate the main features of the models and provide some comparative policy analysis across the model.Supply chain management Inventory management Newsvendor problem Price-dependent demand Degree of risk tolerance Alternate optimization objectives

Evaluating manufacturer's buyback policies in a single-period two-echelon framework under price-dependent stochastic demand

This paper attempts to model the profitability of a secondary market, in a newsvendor setting, to a profit-maximizing manufacturer, who is offering to the retailer a buyback policy for the unsold merchandise left at the end of the selling season. With a buyback agreement, the manufacturer shares the risks of demand uncertainty, thus inducing the buyer to place larger orders. The manufacturer's risk is mitigated to some extent by the availability of an extra market to dispose off the unsold merchandise. Both parties are risk-neutral profit-maximizers and both have the same information about the final demand for the product and its uncertainty. The manufacturer's decision is to arrive at an optimal wholesale price and the buyback price. Based on this offer, the retailer in turn sets the optimal amount of merchandise to purchase, as well as the unit selling price to meet a price-dependent uncertain demand for the merchandise in question. Due to the difficulty of obtaining analytical results, we have undertaken a numerical analysis to (i) compare the optimal policies across demand functions and error structures for three situations namely the no-incentive case and the buyback policies with and without a secondary market; (ii) indicate the conditions whereby the trade incentive is beneficial to both parties; (iii) assess the efficacy of the policies using two other performance indices (probability of achieving a target profit, and pass-through ratios) alternate to profit maximization; and (iv) conjecture the conditions for successful buyback policies and the nature of the benefits from the secondary market.Newsvendor problem Price-dependent demand Buyback policy Secondary market