| Author: | Dana, J. D. Jr. Petruzzi, N. C. |
| Title: | Note: The News vendor Model with Endogenous Demand |
| Journal: | Management Science
2001 : NOV, VOL. 47:11, p. 1488-1497 |
| Index terms: | INVENTORIES DEMAND UNCERTAINTY PRICING SERVICE |
| Language: | eng |
| Abstract: | This paper considers a firm's price and inventory policy when it faces uncertain demand that depends on both price and inventory level. The authors extend the classic newsvendor model by assuming that expected utility maximizing consumers choose between visiting the firm and consuming an exogenous outside option. The outside option represents the utility the consumer forgoes when she chooses to visit the firm before knowing whether or not the product will be available. The authors investigate both the case in which the firm's price is exogenous and the case in which price is chosen optimally. The paper makes two contributions. |
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