Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment
Reference quality, as a benchmark against which the purchase quality of a product is judged, has an important impact on consumers’ purchase decision, especially perishable items. Thus, how to determine an appropriate quality investment and ordering strategies for perishable items to maximize retaile...
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| Format: | Article |
| Language: | English |
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Wiley
2019-01-01
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| Series: | Journal of Control Science and Engineering |
| Online Access: | http://dx.doi.org/10.1155/2019/8092065 |
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| _version_ | 1832568027891105792 |
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| author | Yuan Li Yumei Hou |
| author_facet | Yuan Li Yumei Hou |
| author_sort | Yuan Li |
| collection | DOAJ |
| description | Reference quality, as a benchmark against which the purchase quality of a product is judged, has an important impact on consumers’ purchase decision, especially perishable items. Thus, how to determine an appropriate quality investment and ordering strategies for perishable items to maximize retailers’ profit is an essential task. A joint dynamic quality investment and inventory replenishment problem for perishable items with consideration of reference quality effect is investigated, where the retailer sells its products using a combination of the offline and online stores, and the sales function is sensitive to products’ quality and consumers’ reference quality. The optimal control model is established to maximize the retailer’s total profit by making a joint quality and inventory strategy. The continuous time dynamic optimal quality investment and inventory replenishment strategies with reference quality effect are obtained by Pontryagin’s maximum principle. Numerical experiments are accounted for the key system parameters on the optimal strategies. |
| format | Article |
| id | doaj-art-c3cfdeedb1b944f0b95cb129efa6db19 |
| institution | Kabale University |
| issn | 1687-5249 1687-5257 |
| language | English |
| publishDate | 2019-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Journal of Control Science and Engineering |
| spelling | doaj-art-c3cfdeedb1b944f0b95cb129efa6db192025-02-03T00:59:55ZengWileyJournal of Control Science and Engineering1687-52491687-52572019-01-01201910.1155/2019/80920658092065Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O EnvironmentYuan Li0Yumei Hou1School of Economics and Management, Yanshan University, Qinhuangdao, 066004, ChinaSchool of Economics and Management, Yanshan University, Qinhuangdao, 066004, ChinaReference quality, as a benchmark against which the purchase quality of a product is judged, has an important impact on consumers’ purchase decision, especially perishable items. Thus, how to determine an appropriate quality investment and ordering strategies for perishable items to maximize retailers’ profit is an essential task. A joint dynamic quality investment and inventory replenishment problem for perishable items with consideration of reference quality effect is investigated, where the retailer sells its products using a combination of the offline and online stores, and the sales function is sensitive to products’ quality and consumers’ reference quality. The optimal control model is established to maximize the retailer’s total profit by making a joint quality and inventory strategy. The continuous time dynamic optimal quality investment and inventory replenishment strategies with reference quality effect are obtained by Pontryagin’s maximum principle. Numerical experiments are accounted for the key system parameters on the optimal strategies.http://dx.doi.org/10.1155/2019/8092065 |
| spellingShingle | Yuan Li Yumei Hou Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment Journal of Control Science and Engineering |
| title | Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment |
| title_full | Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment |
| title_fullStr | Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment |
| title_full_unstemmed | Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment |
| title_short | Joint Quality Investment and Inventory Decisions for Perishable Items with Reference Quality Effect under the O2O Environment |
| title_sort | joint quality investment and inventory decisions for perishable items with reference quality effect under the o2o environment |
| url | http://dx.doi.org/10.1155/2019/8092065 |
| work_keys_str_mv | AT yuanli jointqualityinvestmentandinventorydecisionsforperishableitemswithreferencequalityeffectundertheo2oenvironment AT yumeihou jointqualityinvestmentandinventorydecisionsforperishableitemswithreferencequalityeffectundertheo2oenvironment |