Considering a firm where demand is sensitive to delivery lead time and price and whose product competes with the alternative products in the market, the paper develops a model that integrates pricing and delivery lead time decisions constrained by capacity expansion cost. Under the law of trade offs, we propose the optimal solutions with delivery lead time as the leader and price as the leader, respectively. It is shown that the optimal price represents a bigger increase with the reduction of delivery lead time, while the optimal delivery lead time is inversely proportional to the square root of price. Our analysis highlights the relation between net income and capacity, as well as the optimal capacity level with capacity expansion cost. A numerical example is given to illustrate some helpful results.
陈宗建, 熊伟, 陈荣秋. 考虑产能扩大成本的价格与交付提前期优化模型[J]. J4, 2010, 7(10): 1548-.
CHEN Zong-Jian, XIONG Wei, CHEN Rong-Qiu. The Model of Optimal Price and Delivery Lead Time with Capacity Expansion Cost. J4, 2010, 7(10): 1548-.