SC&L SEMINAR SERIES :: Coordination of Marketing and Production for Price and Leadtime Decisions

Primary tabs

We study a firm which serves customers that are sensitive to quoted price and leadtime, where pricing decisions are made by the marketing department and leadtime decisions by the production department. We analyze the inefficiencies that are due to the decentralization of the price and leadtime decisions. In the decentralized case, the total demand generated is larger, leadtimes are longer, quoted prices are lower, and the firm profits are lower as compared to the centralized case. We explore coordination mechanisms and examine their robustness to estimation errors in the problem parameters. We also provide insights on the sensitivity of the optimal decisions with respect to market characteristics and the firm's capacity level.


  • Workflow Status: Published
  • Created By: Barbara Christopher
  • Created: 10/08/2010
  • Modified By: Fletcher Moore
  • Modified: 10/07/2016


No keywords were submitted.

Target Audience