Technical Note—Optimal Dynamic Joint Inventory-Pricing Control for Multiplicative Demand with Fixed Order Costs and Lost Sales

The preparation of 1-(3-carboxypyridyl-2)-4-methyl-2-phenylpiperazine dihydrate and other mirtazapine intermediates are described, particularly useful in the preparation of mirtzapine.

Abstract

This note studies the optimal dynamic decision-making problem for a retailer in a price-sensitive, multiplicative demand framework. Our model incorporates lost sales, holding cost, fixed and variable procurement costs, as well as salvage value. We characterize the structure of the retailer's (discounted) expected profit-maximizing dynamic inventory policy for both finite and infinite selling horizon problems.