An Optimal Model at the Interface of Operations with Social Media Marketing

Social media sales and the logistics of products is being shuttled into a new technological paradigm. The purpose of this paper is to review the role of social media sales force and its effects on lot size process and the pricing under an infinite-time horizon assumption. We begin with reviewing the role and importance of social media in business; with a focus on the mathematic deterministic model for decision making that offer ways in which social media influences each step. Scenarios are specifically considered. In the first scenario, price is determined by the market. What size to hold inventoried products and what to budget for promotions on a social media platform are the important variables in market determined pricing. In the second scenario, price is examined by the decision maker based on maximizing the profit margin. In this first case scenario, advertising and product prices are jointly considered to maximize the profit margin. In this second case scenario, lot sizing is considered to minimize costs of holding inventories and placing orders. In both scenarios, the profit function outcome is concave. Therefore, the model optimizes solutions for pricing, lot-sizing for social media advertising policies.