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Business Research

, Volume 1, Issue 1, pp 106–123 | Cite as

Integrating Pricing and Inventory Control: Is it Worth the Effort?

  • Lisa Gimpl-HeersinkEmail author
  • Christian Rudloff
  • Moritz Fleischmann
  • Alfred Taudes
Open Access
Article

Abstract

In this paper we first show that the gains achievable by integrating pricing and inventory control are usually small for classical demand functions. We then introduce reference price models and demonstrate that for this class of demand functions the benefits of integration with inventory control are substantially increased due to the price dynamics. We also provide some analytical results for this more complex model. We thus conclude that integrated pricing/inventory models could repeat the success of revenue management in practice if reference price effects are included in the demand model and the properties of this new model are better understood.

Keywords

Inventory Management Pricing Reference Price Stochastic Demand Model 

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Copyright information

© The Author(s) 2008

Open AccessThis article is distributed under the terms of the Creative Commons Attribution 4.0 International License (https://creativecommons.org/licenses/by/4.0), which permits use, duplication, adaptation, distribution, and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.

Authors and Affiliations

  • Lisa Gimpl-Heersink
    • 1
    Email author
  • Christian Rudloff
    • 1
  • Moritz Fleischmann
    • 2
  • Alfred Taudes
    • 1
  1. 1.Institute for Production ManagementVienna University of Economics and Business AdministrationAustria
  2. 2.Rotterdam School of ManagementErasmus UniversityThe Netherlands

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