TY - JOUR
T1 - Optimal Dual-Channel Dynamic Pricing of Perishable Items under Different Attenuation Coefficients of Demands
AU - Lou, Zhenkai
AU - Hou, Fujun
AU - Lou, Xuming
N1 - Publisher Copyright:
© 2020, Systems Engineering Society of China and Springer-Verlag GmbH Germany.
PY - 2021/2
Y1 - 2021/2
N2 - This paper discusses optimal dual-channel dynamic pricing of a retailer who sells perishable products in a finite horizon. The type of product which is equipped with different attenuation coefficients of demands on different sales channels is considered. Novel demand functions for the two channels are proposed according to attenuation coefficients of demands, and then a decision model is constructed, which can be handled stage-by-stage. It is shown that the sales price and the sales quantity of the channel which possesses more market shares are both higher than the ones of the other channel at each sales stage. More importantly, by analyzing the reasonability of the obtained solution, a necessary and sufficient condition is proposed to guarantee that both of the two channels will not stop selling through the entire period. We also propose an approach by the elimination method to deal with cases in which some channel stops selling. Further, we demonstrate that the channel which possesses more market shares is the optimal option when only one channel runs. Finally, numerical examples are presented to investigate the change of sales prices of the two channels under different market potential demands.
AB - This paper discusses optimal dual-channel dynamic pricing of a retailer who sells perishable products in a finite horizon. The type of product which is equipped with different attenuation coefficients of demands on different sales channels is considered. Novel demand functions for the two channels are proposed according to attenuation coefficients of demands, and then a decision model is constructed, which can be handled stage-by-stage. It is shown that the sales price and the sales quantity of the channel which possesses more market shares are both higher than the ones of the other channel at each sales stage. More importantly, by analyzing the reasonability of the obtained solution, a necessary and sufficient condition is proposed to guarantee that both of the two channels will not stop selling through the entire period. We also propose an approach by the elimination method to deal with cases in which some channel stops selling. Further, we demonstrate that the channel which possesses more market shares is the optimal option when only one channel runs. Finally, numerical examples are presented to investigate the change of sales prices of the two channels under different market potential demands.
KW - Dual-channel pricing
KW - attenuation coefficients of demands
KW - multi-stage pricing
KW - stop selling
UR - http://www.scopus.com/inward/record.url?scp=85092096433&partnerID=8YFLogxK
U2 - 10.1007/s11518-020-5466-0
DO - 10.1007/s11518-020-5466-0
M3 - Article
AN - SCOPUS:85092096433
SN - 1004-3756
VL - 30
SP - 44
EP - 58
JO - Journal of Systems Science and Systems Engineering
JF - Journal of Systems Science and Systems Engineering
IS - 1
ER -