The influence of supply chain disruptions on pricing and inventory decisions, by Joris Corstens

The influence of supply chain disruptions on pricing and inventory decisions, by Joris Corstens

By: jacobsadm

June 7, 2013

Due to an increased focus on Just-in-Time principles supply chain disruptions have exhibited a devastating impact on the pro ts of global or locally operating companies. On the contrary, companies try to boost their pro t by jointly or sequentially examining pricing and inventory decisions. In this thesis supply chain disruptions are incorporated in a pricing and inventory model. By using this model a combined inventory and pricing policy for mitigation of disruption risk is developed. This policy is characterized as follows: inventory management is done according to a base-stock policy. If net inventory is below or equal to a pricing reference inventory level the price is increased with a percentage. The e ffects of using this policy on a single retailer’s revenue, costs and pro t for diff erent scenarios are examined.