Managing Perishable Products with Target Revenue

摘要：

Traditional revenue management assumes that decision makers are risk neutral. As a result,maximizing expected revenues is a logical objective. The framework, however, encounters a difficulty when decision makers attempt to achieve certain revenue targets in the short term while randomness of revenue flows hinder the goal. This paper presents a risk-sensitive pricing model for managing perishable products. The model includes a penalty term in the objective function, which becomes effective only if the realized revenue at the end of the sales horizon falls short of the target. We solve the model with a close-form solution and derive structural properties of the optimal policy. We show that in general the optimal pricing policy for risk-sensitive decision makers is more conservative than the policy of risk-neutral ones. Numerical examples are presented.

关键词： Revenue management uncertainty risk sensitive revenue target

作者: Baichun Xiao Xiaohua Li

作者单位: School of Business, Long Island University, C.W. Post, New York;Chinese-American Center for Service School of Management, Sichuan University;Chinese-American Center for Service Management, Southwest J

会议类型: 国际会议

会议名称: 2007 International Conference on Manufacturing & Service Operations Management(2007制造与服务运作管理国际学术会议)

会议地点: 北京

会议语种:英文

在线出版日期: 2007-06-18（万方平台首次上网日期，不代表论文的发表时间）