A pricing model for a service inventory system when demand is price and waiting time sensitive

Abstract

This paper deals with the simultaneous determination of initial sales price, secondary sales price and resource capacity needed to be rented in a service rental system. It is assumed that demands are price and waiting time dependent. A deterministic model is developed for establishing the above-mentioned decisions. Analytical results show that optimal solutions can be found as a closed form formulation when the times to change sales prices are exogenous variables. In addition, we found sufficient conditions for optimization in the case where the times to change sales price are decision variables. © Springer-Verlag Berlin Heidelberg 2005.