factory price dbp substitution dbp substitution

  • factory price dbp substitution dbp substitution
  • factory price dbp substitution dbp substitution
  • factory price dbp substitution dbp substitution
  • What is a stockout based substitution rate?
  • Stockout-based substitution rate from product i to product k Price at which all customers have a negative utility from product H Consumer choice process: Consumers are heterogenous with respect to their quality valuation and each consumer independently chooses the product that maximizes her net utility.
  • Are inventory models based on static/assortment-based substitution easier than dynamic substitution models?
  • Inventory models under static/assortment-based substitution are in general easier than models considering dynamic substitution ( Kök et al., 2015 ). van Ryzin and Mahajan (1999) study assortment planning and inventory decisions for the case of static substitution and exogenous prices using a multinomial logit (MNL) model.
  • Should firms consider stockout-based substitution?
  • By considering stockout-based substitution firms would reconsider their inventory strategy. These results have further implications on firms’ overall assortment, i.e., whether or not to keep inventory of specific products.
  • Is stockout-based substitution a classical price-setting newsvendor model?
  • Without considering stockout-based substitution, cases (i) and (iii) are classical price-setting newsvendor models with multiplicative demand function; however, with an additional price constraint.
  • What is the role of substitution in retail?
  • In the retail sector, in particular, substitution plays a critical role and may appear in various forms. When a customer enters a store and wants to buy a product of a particular quality that turns out to be too expensive, the customer might be willing to substitute a more affordable product.
  • Does ignoring stockout-based substitution lead to a lower selling price?
  • First, we find that for all instances, disregarding stockout-based substitution leads to a lower selling price of the high-quality product ( Δ r H * ( n s) < 0 ). However, it may lead to lower or higher inventory levels for the two products. Table 2.

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