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Author: | Moinzadeh, K. Ingene, C. |
Title: | An inventory model of immediate and delayed delivery |
Journal: | Management Science
1993 : MAY, VOL. 39:5, p. 536-548 |
Index terms: | MARKETING DISTRIBUTION PRICING INVENTORY CONTROL |
Language: | eng |
Abstract: | This paper considers the long run, profit maximizing strategy of a distributer that holds a good (good 1) in inventory for immediate delivery and that offers a second good (good 2) for delayed delivery. When the two goods are substitutes, an out-of-stock situation for good 1 will cause consumers ("walkers") to seek the good elsewhere, other consumers ("waiters") to accept a raincheck for later delivery of good 1, and others still ("swithes") to place an order for good 2. It is shown that a profit maximizing strategy may entail setting a price for the delayed delivery item so as to encourage switching behaviour. |
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