Theauthorsanalyzeafinitehorizon,singleproduct,periodreviewmodelinwhichpricingandinventorydecisionsaremadesimultaneously.Demandsindifferentperiodsarerandomvariablesthatareindependentofeachotherandtheirdistributionsdependontheproductprice.Pricingandorderingdecisionsaremadeatthebeginningofeachperiodandallshortagearebacklogged.Orderingcostisaconvexfunctionoftheamountordered.Theobjectiveistofindaninventoryandpricingpolicymaximizingexpecteddiscountedprofitoverthefinitehorizon.Theauthorscharacterizethestructureoftheoptimalcombinedpricingandinventorystrategyforthismodel.Moreover,theauthorsdemonstratehowtheprofit-to-gofunction,orderuptolevel,reorderpointandoptimalpricechangewithrespecttostateandtime.
