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arXiv · 1708.07305

Optimal firm's policy under lead time-and price-dependent demand: interest of customers rejection policy

Abduh Sayid·Yannick Frein·Ramzi Hammami
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Abstract

Considering a lead-time-and price-sensitive demand, we investigate whether a client rejection policy, modeled as M/M/1/K system, can be more profitable than an all-client acceptance policy, modeled as M/M/1 system. We provide analytical insights for the cases with and without holding and penalty costs by comparing M/M/1/1 to M/M/1 models.

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Abduh Sayid, Yannick Frein, Ramzi Hammami. 2017-08-24. Optimal firm's policy under lead time-and price-dependent demand: interest of customers rejection policy. https://arxiv.org/abs/1708.07305

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