scholarly journals Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-12 ◽  
Author(s):  
Qi Chen ◽  
Qi Xu ◽  
Wenjie Wang
Keyword(s):  
Dynamic Pricing ◽  
Price Policy ◽  
Pricing Strategy ◽  
Sensitivity Analyses ◽  
Pricing Strategies ◽  
System Parameters ◽  
Optimal Dynamic ◽  
Replenishment Cycle ◽  
Fashion Apparel ◽  
Short Product

Fashion apparel, with short product lifecycles and highly volatile demand, requires careful attention during both the initial ordering periods before the selling season and during the selling season, with its decisions regarding price and replenishment. Using Pontryagin’s maximum principle method, this study investigates the problem of the dynamic pricing strategy and replenishment cycle for fashion apparel by considering the effect of fashion level on demand. First, we provide a framework for fashion apparel by formulating a model that includes both price and demand at different fashion levels. We then provide an algorithm to derive the optimal dynamic pricing strategy and replenishment cycle. Numerical examples and sensitivity analyses of the main system parameters are provided to demonstrate the obtained results, which form the basis for managerial insights. It is shown that the apparel retailer has three types of optimal dynamic pricing strategies and that the optimal strategy is independent of the replenishment cycle. The apparel retailer is able to realize the profit advantage of a continuously variable price policy by adjusting the sales price periodically.

Dynamic pricing of perishable food as a sustainable business model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Michael Scholz ◽  
Roman-David Kulko
Keyword(s):  
Willingness To Pay ◽  
Food Waste ◽  
Dynamic Pricing ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Sustainable Business ◽  
Content Type ◽  
Food Retailers ◽  
Static Pricing ◽  
The Impact

PurposeThe purpose of this paper is to (1) investigate the effect of freshness on consumers' willingness to pay, (2) derive static and dynamic pricing strategies and (3) compare the effect of these pricing strategies on a retailer's revenue and food waste. This investigation helps to reveal the potentials of dynamic pricing strategies for building more sustainable business models.Design/methodology/approachThe authors conduct an online experiment to measure consumers' willingness to pay for fresh and three-days’ old strawberries. The impact of freshness on willingness to pay is analysed using univariate tests and regression analysis. Pricing strategies are compared using a Monte Carlo simulation.FindingsThe results of this study show that freshness largely determines consumers' willingness to pay and price sensitivity. This renders dynamic pricing a promising strategy from an economic point of view. The results of the simulation study show that food waste can be reduced by up to 53.6% with a dynamic pricing instead of a static pricing strategy in the case that there are as many consumers as strawberry packages in the inventory. Revenue can be increased by up to 10% compared to a static pricing strategy based on fresh strawberries.Practical implicationsThis study suggests that food retailers can improve their revenue when switching from static to dynamic pricing. Furthermore, in most cases, food retailers can reduce food waste with a dynamic instead of a static-pricing strategy, which might help to improve their image through a more sustainable business model and attract additional consumers.Originality/valueThis study is the first to analyse the possibility of using food freshness to design a dynamic pricing strategy and to analyse the impact of such a pricing strategy on both, a retailer's revenue and a retailer's food waste.

scholarly journals Dynamic Pricing under Cost Reduction in the Presence of Myopic and Strategic Consumers

2019 ◽  
Vol 2019 ◽  
pp. 1-15
Author(s):  
Guangning Liu ◽  
Zhenzhong Guan ◽  
Hua Wang
Keyword(s):  
Dynamic Pricing ◽  
Cost Reduction ◽  
Pricing Strategy ◽  
Future Price ◽  
Purchase Decisions ◽  
Pricing Strategies ◽  
Strategic Consumers ◽  
Technology Advancement ◽  
Significant Cost Reduction ◽  
Strategic Waiting

After release, a product usually suffers cost reductions during its whole lifespan. Compared to the myopic, strategic consumers may have stronger incentive to delay the purchase once they perceive that a significant cost reduction will result in a markdown. The strategic (compared to the myopic) properties influence the seller both quantitatively in terms of proportion of strategic consumers and qualitatively in terms of customer patience. To forecast the reaction of the whole market under cost reduction, it is necessary to acquire the strategic properties. In this paper, we study the impacts of proportion of strategic consumers, customer patience, and cost reduction on dynamic pricing strategy when cost reduction comes from technology advancement. The seller makes pricing strategies when facing unknown future cost, and the buyer makes purchase decisions when facing unknown future price. Our study shows that generally both higher strategic consumer proportion and customer patience contribute to a delay in sales. Further, profit diversion happens under great combination of strategic properties. In addition, with the increase of customer patience, not only strategic but also myopic consumers will buy less. Finally, the strategic properties moderate the pricing strategy in latter stage when there is a cost reduction. This indicates a threshold as combination of strategic properties, upon which seller tends to offer a smaller markdown to discourage strategic waiting, and under which seller tends to offer a greater markdown to divert strategic consumers to the latter period.

scholarly journals Ticket Sales Prediction and Dynamic Pricing Strategies in Public Transport

2020 ◽  
Vol 4 (4) ◽  
pp. 36
Author(s):  
Francesco Branda ◽  
Fabrizio Marozzo ◽  
Domenico Talia
Keyword(s):  
Public Transport ◽  
Dynamic Pricing ◽  
Low Cost ◽  
Important Change ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Long Distance ◽  
Ticket Sales ◽  
Transport Services ◽  
Sales Prediction

In recent years, the demand for collective mobility services registered significant growth. In particular, the long-distance coach market underwent an important change in Europe, since FlixBus adopted a dynamic pricing strategy, providing low-cost transport services and an efficient and fast information system. This paper presents a methodology, called DA4PT (Data Analytics for Public Transport), for discovering the factors that influence travelers in booking and purchasing bus tickets. Starting from a set of 3.23 million user-generated event logs of a bus ticketing platform, the methodology shows the correlation rules between booking factors and purchase of tickets. Such rules are then used to train machine learning models for predicting whether a user will buy or not a ticket. The rules are also used to define various dynamic pricing strategies with the purpose of increasing the number of tickets sales on the platform and the related amount of revenues. The methodology reaches an accuracy of 95% in forecasting the purchase of a ticket and a low variance in results. Exploiting a dynamic pricing strategy, DA4PT is able to increase the number of purchased tickets by 6% and the total revenue by 9% by showing the effectiveness of the proposed approach.

scholarly journals Pelatihan Pendidikan Entrepreneurship Bagi Siswa-Siswi SMAK Frateran: Penentuan Strategi Harga Jual

2021 ◽  
Vol 3 (2) ◽  
Author(s):  
Lenny Gunawan ◽  
Agustiono Agustiono ◽  
Charly Hongdiyanto ◽  
Wendra Hartono
Keyword(s):  
Community Service ◽  
Dynamic Pricing ◽  
Service Industry ◽  
Value Added ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Low Order

The purpose of this community service to Frateran Highschool is to increase their understanding towards Determining Pricing Strategy within their businesses. This training is on live discussion via zoom regarding the previous experiences in determining pricing strategy among lecturers, facilitators, and students as participants. These activities were conducted in an hour meeting session on 17th September 2021, as community service from Ciputra lecturers’ activity to SMAK. Frateran Surabaya. The class was attended by 12 out of 15 students registered, grade XII within Entrepreneurship Subject. The pricing strategies matrix consists of 3x3 quadrants, which then divided into 1. Fixed menu Pricing, and 2. Dynamic Pricing. Students also learned about value added within a product, thus lead them into positioning and differentiation for the businesses. The explanation also given by using examples for each method: Traveloka, Gofood, Grabfood (promotional posters & vouchers) to balance out peak and low order times, Ovo (program features in application) increasing customers convenience in adding values, Starbucks (personnel contribution service and behind the scenes operational video). The conclusion, the activity was able to increase students’ understanding of fixed and dynamic pricing strategy, value added within products/services, and finally positioning and differentiation within service industry.

Exploring the value and innovative pricing strategy of digital archives

2014 ◽  
Vol 32 (1) ◽  
pp. 96-105
Author(s):  
Ping Wang ◽  
In-Lin Hu ◽  
Chen-Chi Chang
Keyword(s):  
Business Models ◽  
Digital Preservation ◽  
Price Policy ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Digital Archives ◽  
Information Goods ◽  
Research Issues ◽  
Content Type ◽  
Set Up

Purpose – The research issues of digital preservation have apparently moved from how to set up the digital archives to on-going business models. The aim of this paper is to investigate the key factors for digital archives' success. This paper provides a business model for the sustainability of digital archives. Design/methodology/approach – Both pricing strategies and business models related to digital archives are very important. From the point of archive preservation, how to preserve digital archives permanently and make them accessible are the most important research issues. This paper, based on a review of the academic literature, adopts the innovative pricing approach to develop the business models and pricing strategy. Findings – The research defines the different needs at start-up versus the on-going operations for digital preservation. Considering digital archives as information goods, this study adopts the TRIZ method to establish a pricing strategy for digital preservation. It discusses the pricing strategy for digital preservation using an innovative method of creative problem-solving theory from the perspectives of the archives institutes, materials providers and consumers. Originality/value – This study recommends the pricing strategies for the digital preservation programs and the government's price policy based on the TRIZ analysis method.

scholarly journals A Joint Dynamic Pricing, Advertising, and Production Model with Inventory-Level-Dependent Goodwill

2020 ◽  
Vol 2020 ◽  
pp. 1-15
Author(s):  
Yongzhao Wang ◽  
Liqun Wei ◽  
Jianxiong Zhang
Keyword(s):  
Dynamic Pricing ◽  
Production Model ◽  
Inventory Level ◽  
System Parameters ◽  
Decision Making Problem ◽  
Demand Rate ◽  
Building Factors ◽  
Optimal Dynamic ◽  
The Impact ◽  
Production Decision

Inventory level has a significant impact on the goodwill of products to customers, which seldom becomes the focus of previous studies. In this paper, joint dynamic pricing, advertising, and production decision-making problem is investigated, where the demand rate depends on sales price and goodwill. The inventory and backlog as well as advertisement are considered as goodwill-building factors. The optimal dynamic pricing, advertising, and production policies are derived by using Pontryagin’s maximum principle. Numerical examples are provided to demonstrate the obtained results, and sensitivity analysis of main system parameters is carried out to obtain some managerial insights. We find that when the initial goodwill is relatively high, the firm’s profit first decreases and then increases with respect to the impact intensity of inventory on goodwill; otherwise, the firm always benefits from a higher impact intensity of inventory on goodwill. Furthermore, the optimal production and advertising policies are complementary caused by the feature of inventory-dependent goodwill.

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