Global Optimization for a Developed Price Discrimination Model: A Signomial Geometric Programming Based Approach

Saman Moradi, Hashem Omrani, Ali Emrouznejad

Research output: Contribution to journalArticle

Abstract

This paper presents a price discrimination model for a manufacturer who acts in two different markets. In order to have a fair price discrimination model and compare monopoly and competitive markets, it is assumed that there is no competitor in the first market (monopoly market) and there is a strong competitor in the other market (competitive market). The manufacturer objective is to maximize the total benefit in both markets. The decision variables are selling price, lot size, marketing expenditure, customer service cost, flexibility and reliability of production process, set up costs and quality of products. The proposed model in this paper is a signomial geometric programming problem which is difficult to solve and find the globally optimal solution. So, this signomial model is converted to a posynomial geometric type and using an iterative method, the globally optimal solution is found. To illustrate the capability of the proposed model, a numerical example is solved and the sensitivity analysis is implemented under different conditions.
Original languageEnglish
JournalJournal of the Operational Research Society
Early online date24 Mar 2020
DOIs
Publication statusE-pub ahead of print - 24 Mar 2020

Bibliographical note

This is an Accepted Manuscript of an article published by Taylor & Francis Group in Journal of the Operational Research Society on 24 March 2020, available online at: http://www.tandfonline.com/[10.1080/01605682.2019.1678408

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