The Impact Of Price, Lead Time And Personalization On Optimal Decision

With the development of the economics, respond time and personalization become more and more sensitive to demand. People will be reluctant to wait and may not afford much money to the kinds of products with long lead time. In addition, more and more people choose product according to whether its function meet their special need. Demand is not affected by price only, but related to lead time and personalization. So what kinds of effect will time and personalization have on demand and net profit? This is a meaningful field need us to pay attention to.This thesis studies the effects of lead time selection and personalization by modeling and numerical analysis.Firstly, based on the previous model for time and price sensitive demand with substitutable market, a new model is developed by considering the relationship between price and lead time additionally. In the new model, both demand and net profit are determined by lead time only.Secondly, through the analysis of the sensitive parameter, demand is divided into lead-time-sensitive type and price-sensitive type. And optimal decisions and characteristics of the function of net profit and lead time are gained. This thesis also analyzes the effects of lead time selection through a numerical example, which is used to make a comparison with the result when price and lead time are independent decision variables.Finally, this thesis set a new decision valuable named"fulfill degree of personality"and a model for price, lead time and functions sensitive demand is developed. Optimal decision is analyzed. And a proposition is proved that in special condition, we can get more profit if the basic type of product we choose to supply can match people's personality much better.Although we get some management insight, this thesis has set many assumptions to simplify the discussion. Complicated conditions need to be considered. And in-depth study should be made, such as set a nonlinear relation between price and lead time, discuss the effects of parameter values selection.