Joint Pricing And Production Decisions For Product Line Design Under Stock Shortage

With the development of modern society economics, people's living standard and consumption concept have makeimportant changes.Customers become more and more aware of their preferences for the product and the demand show a diversification and personalized trend. In order to improve the level of customer service and better meet customer's demand for product heterogeneity, the enterprise needs through a variety of ways to enhance the ability of product development and make new products continue to emerge.This paperestablish an optimization model that consider monopoly manufacturer have two heterogeneous products and backorder is allowed, mainly research the joint pricing and production decisions for product line design, and obtains the optimal quality level, price level and production cycle. The thesis first introduces the definition of product line design, then reviews and summarizes the domestic and international research on the product line design.Secondly,the production model on the base of Economic Production Quantity is established,and the optimal production and pricing decisions are obtained by solving the model.Finally,analyzethe influence of some parameters(such as production cost, shortage cost, market demand, customer's willingness to pay, etc.) on the optimal decision. The results show that the monopoly manufacturers can adjust the production and pricing decisions according to the changes of some parameters, so that manufacturers can get the maximum profit.