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Article: Concavity and Unimodality of Expected Revenue Under Discrete Willingness to Pay Distributions
Title | Concavity and Unimodality of Expected Revenue Under Discrete Willingness to Pay Distributions |
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Authors | |
Keywords | revenue management reliability supply chain management failure rate log-concavity |
Issue Date | 2020 |
Citation | Production and Operations Management, 2020, v. 29, n. 3, p. 788-796 How to Cite? |
Abstract | © 2019 Production and Operations Management Society Most pricing and revenue management models have at their core an optimization problem; one needs to determine the optimal price or quantity to maximize a profit or revenue function. To ensure tractability, conditions that assure the objective function has a unique solution are enormously helpful. So far, several technical assumptions have been proposed for the continuous case, but comparatively little attention has been given to the discrete counterpart despite its prevalence in practice. Thus, this study aims to develop new technical assumptions, built upon relevant economic concepts, to guarantee the tractability of revenue management models in discrete settings. In particular, we present two sufficient conditions for the revenue function to be concave, in terms of quantity or price and propose a condition for the revenue function to be unimodal, called discrete increasing generalized failure rate (IGFR). Our definition has an appropriate economic interpretation and offers comparable properties to those of the continuous version. Finally, we show the discrete IGFR property holds for several discrete distributions. |
Persistent Identifier | http://hdl.handle.net/10722/296204 |
ISSN | 2023 Impact Factor: 4.8 2023 SCImago Journal Rankings: 3.035 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Ninh, Anh | - |
dc.contributor.author | Shen, Zuo Jun Max | - |
dc.contributor.author | Lariviere, Martin A. | - |
dc.date.accessioned | 2021-02-11T04:53:03Z | - |
dc.date.available | 2021-02-11T04:53:03Z | - |
dc.date.issued | 2020 | - |
dc.identifier.citation | Production and Operations Management, 2020, v. 29, n. 3, p. 788-796 | - |
dc.identifier.issn | 1059-1478 | - |
dc.identifier.uri | http://hdl.handle.net/10722/296204 | - |
dc.description.abstract | © 2019 Production and Operations Management Society Most pricing and revenue management models have at their core an optimization problem; one needs to determine the optimal price or quantity to maximize a profit or revenue function. To ensure tractability, conditions that assure the objective function has a unique solution are enormously helpful. So far, several technical assumptions have been proposed for the continuous case, but comparatively little attention has been given to the discrete counterpart despite its prevalence in practice. Thus, this study aims to develop new technical assumptions, built upon relevant economic concepts, to guarantee the tractability of revenue management models in discrete settings. In particular, we present two sufficient conditions for the revenue function to be concave, in terms of quantity or price and propose a condition for the revenue function to be unimodal, called discrete increasing generalized failure rate (IGFR). Our definition has an appropriate economic interpretation and offers comparable properties to those of the continuous version. Finally, we show the discrete IGFR property holds for several discrete distributions. | - |
dc.language | eng | - |
dc.relation.ispartof | Production and Operations Management | - |
dc.subject | revenue management | - |
dc.subject | reliability | - |
dc.subject | supply chain management | - |
dc.subject | failure rate | - |
dc.subject | log-concavity | - |
dc.title | Concavity and Unimodality of Expected Revenue Under Discrete Willingness to Pay Distributions | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1111/poms.13138 | - |
dc.identifier.scopus | eid_2-s2.0-85076417086 | - |
dc.identifier.volume | 29 | - |
dc.identifier.issue | 3 | - |
dc.identifier.spage | 788 | - |
dc.identifier.epage | 796 | - |
dc.identifier.eissn | 1937-5956 | - |
dc.identifier.isi | WOS:000501997600001 | - |
dc.identifier.issnl | 1059-1478 | - |