Proceedings of the 9th International Conference on Operations and Supply Chain Management, Vietnam, 2019

ISBN: 9786027060470


JOINT PROMOTIONS AND INVENTORY DECISIONS

George Hadjinicola
University of Cyprus

Andreas Soteriou Soteriou
University of Cyprus

We present a model that combines price promotions and inventory decisions, in order to evaluate the effect of these two factors on a firm’s profitability. More importantly, we want to investigate whether these two factors can complement one another in the firm’s effort to increase its profits. The model treats the annual number of promotions that the firm should adopt as a decision variable. The model considers an annual price-depended demand, and following the extensive marketing literature on promotions, assumes that price promotions increase monthly demand and demand variability. This affects inventory decisions such as ordering quantities and safety stocks. A sensitivity analysis shows the effects of all model parameters (marketing and operational) on the annual number of promotions adopted by the firm, providing interesting managerial insights.

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@InProceedings{Hadjinicola2019_OSCMConference_331,
    author = {Hadjinicola, George and Soteriou, Andreas Soteriou},
    title = {JOINT PROMOTIONS AND INVENTORY DECISIONS},
    booktitle = {Proceedings of the 9th International Conference on Operations and Supply Chain Management, Vietnam, 2019},
    year = {2019},
    doi = {NaN}
}

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