Research Reports from the Department of Operations

Document Type

Report

Publication Date

10-1-1983

Abstract

This paper provides a stochastic (diffusion) sales response model to advertising. Using this model, optimum advertising policies are found by solution of a stochastic control problem with reflection boundaries. Analytical and numerical (computer generated) results are obtained, and interpreted to yield greater insights on the stochastic effects of advertising and the sales process on firms' profitability.

Keywords

Stochastic processes, Operations research, Advertising--Mathematical models, Sales management--Mathematical models, Stochastic processes, Diffusion--Mathematics, Profit--Mathematical models, Stochastic control theory, Decision making--Mathematical models, Business forecasting--Mathematical models

Publication Title

Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University

Issue

Technical memorandum no. 533

Rights

This work is in the public domain and may be freely downloaded for personal or academic use

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