Integration of Pricing and Production Decisions for Substitutable Multiple Products under Uncertainty

Joint decision of production/inventory and pricing is a more important area at present academic research. There is a vast of literature focusing on this problem. However, most of the literature discuss the decision policy of single product, even seldom literature research multiple products, but they assume the products are independent. In reality, many firms produce substitutable multiple products, and among products are dependent. Therefore, in this paper, we research the production and pricing joint decision model of multiple products with downward substitution. And provide the existing condition of optimal production quantity and optimal sell price in additive demand case. We also compare the profits between perfect information and imperfect information, and yield the value of the information in the production and pricing decision