Lead-time setting, capacity utilization, and pricing decisions under lead-time dependent demand
作者:
KONDALARAO PALAKA,
STEVEN ERLEBACHER,
DEANH. KROPP,
期刊:
IIE Transactions
(Taylor Available online 1998)
卷期:
Volume 30,
issue 2
页码: 151-163
ISSN:0740-817X
年代: 1998
DOI:10.1080/07408179808966447
出版商: Taylor & Francis Group
数据来源: Taylor
摘要:
This research examines the lead-time setting, capacity utilization, and pricing decisions facing a firm serving customers that are sensitive to quoted lead-times. We model the firm's operations as an M/M/1 queue and treat the demand as being linear in price and quoted lead-time. We analyze the quoted lead-time, capacity utilization, and price that maximize revenues less total variable production costs, WIP holding costs, and lateness penalty costs. We use this analysis to show that the capacity utilization should be lower when (1) customers are more sensitive to lead-times and/or (2) the firm incurs higher congestion related costs and/or (3) the penalty for lateness is higher. Further, we study the robustness of optimal profit contributions when the model parameters are mis-estimated.
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