We develop a framework to model the shopping and consumption decisions of forward-looking consumers. Assuming that the consumer’s future utility for each product alternative can be characterized by a standard random utility model, we use dynamic programming to determine the optimal consumption...

We consider a dynamic inventory (production) model with general order (production) costs and excess demand that can be backordered or refused by the firm. A unit backordered incurs a backorder cost, a unit refused incurs a lost sales charge. Endogenizing the sales decision is necessary in the...