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The Effect of Discount Coupons on Lead Time Driven Cancellations

양홍석|이재상
경영연구소 (Management Research Center)|2024.06|Seoul Journal of Business|제30권 제1호|pp. 27-52|DOI 10.35152/snusjb.2024.30.1.002

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키워드

Profit MaximizationCouponLead timeSale PromotionOrder Cancellations

초록

This paper analyzes the optimal level of discount coupons and a point when to introduce it in a situation when firms provide discount coupons to minimize its loss; order cancellations occurred by difficulty in delivering products on time due to an increase in orders. This paper first finds the expected number of order cancellations using the nonhomogeneous Poisson process. Second, the profit function is structured by introducing discount coupons with a multivariate probability function. Findings reveal that offering coupon helps a firm to minimize its loss of profit, but if popularity does not settle down, discount coupon is no use.

Abstract

This paper analyzes the optimal level of discount coupons and a point when to introduce it in a situation when firms provide discount coupons to minimize its loss; order cancellations occurred by difficulty in delivering products on time due to an increase in orders. This paper first finds the expected number of order cancellations using the nonhomogeneous Poisson process. Second, the profit function is structured by introducing discount coupons with a multivariate probability function. Findings reveal that offering coupon helps a firm to minimize its loss of profit, but if popularity does not settle down, discount coupon is no use.

참고문헌 (48)

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