Optimal Advertising with Stochastic Demand

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George E. Monahan;
  • Journal: Management Science,volume 29,issue 1 January,pages106-117
  • Related identifiers: doi: 10.1287/mnsc.29.1.106
  • Subject: optimal advertising, Markov decision process

A stochastic, sequential model is developed to determine optimal advertising expenditures as a function of product maturity and past advertising. Random demand for the product depends upon an aggregate measure of current and past advertising called "goodwill," and the p... View more
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