An Inventory Model of Single-Period Products Based on Entropy under Price-Dependent Demand

The inventory control problem of the single-period products under price-dependent demand is studied. First, this paper establishes the expected profit expression, and studies the change of the demand distribution parameters with price. Under the condition of not knowing the exact demand distribution, the maximum entropy formulism is employed to establish a model to estimate it. It also studies the solution for the model, and finds the change of the optimal lot size and the maximum profit with price. Finally, with an example, it discovers the change of the demand distribution with price by using numerical analysis, and obtains the optimal price and the optimal lot size.