Pricing, Warranty Length and Inventory Management

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Faridimehr, Sina | 2011

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 42856 (01)
University: Sharif University of Technology
Department: Industrial Engineering
Advisor(s): Akhavan Niaki, Taghi
Abstract:
This study investigates optimal strategies for price, warranty length and production rate of a new product to maximize profit of a producer during lifecycle of the product. We consider both durable products and non-durable ones. Customers buy non-durable products many times but if we consider the planning horizon relatively short, each customer buys one product during the period. So, the market for non-durable products is static and for durable ones is dynamic. The objective function includes both demand and cost functions, where production cost, warranty cost and inventory costs are involved. A solution approach using the maximum principle is described and some propositions are discussed for both markets. In proposing optimal strategies, we consider the fact that the producer should increase all three variables simultaneously or increase one of them and decrease the other two variables at the same time. At the end, we discuss about these optimal strategies.
Keywords:
Pricing ; Production Warranty ; Production Rate ; Static Market ; Dynamic Market

No TOC