scholarly journals Optimal pricing and inventory strategies for introducing a new product based on demand substitution effects

2020 ◽  
Vol 16 (2) ◽  
pp. 725-739
Author(s):  
Zhijie Sasha Dong ◽  
◽  
Wei Chen ◽  
Qing Zhao ◽  
Jingquan Li ◽  
...  
Keyword(s):  
New Product ◽  
Substitution Effects ◽  
Optimal Pricing ◽  
Demand Substitution ◽  
On Demand

Strategic Remanufacturing under Competition

2019 ◽  
Vol 16 (1) ◽  
pp. 85-107
Author(s):  
Zhongwen Ma ◽  
Ashutosh Prasad ◽  
Suresh P. Sethi
Keyword(s):  
Utility Maximization ◽  
New Products ◽  
New Product ◽  
Substitution Effects ◽  
Symmetric Equilibrium ◽  
Lower Margin ◽  
Demand Functions ◽  
Customer Preferences ◽  
Representative Consumer ◽  
The One

Abstract We investigate firms’ remanufacturing strategies for the case of a duopoly. On the one hand, remanufactured products cannibalize sales of new products of the same firm thereby hurting its profits. On the other hand, they can be part of a profitable marketing strategy that targets different customer preferences by providing a larger number of alternatives to customers. This paper studies the tradeoff between these effects and how it is influenced by competition. We develop a model where demand functions for new and remanufactured products of each firm are derived from utility maximization by a representative consumer. This allows us to capture preference and substitution effects between all offered products in the market. We discuss how equilibrium strategies are affected by factors such as competition, substitutability, production cost as well as remanufacturing cost. For example, when competitive intensity between new and new products, and remanufactured and remanufactured products, is (high), both (neither) firms offer remanufactured products in a symmetric equilibrium. If substitution between new and remanufactured products of the same firm is low, but the remanufactured product has a lower margin than the new product, firms can be worse off from remanufacturing.

scholarly journals Optimal Pricing Decision of Fashion Apparel considering Experiential Service and Design Enhancement

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-11 ◽  
Author(s):  
Qi Xu ◽  
Lili Zhou ◽  
Qi Chen
Keyword(s):  
Substitution Effects ◽  
Optimal Pricing ◽  
Selling Price ◽  
Market Demand ◽  
Complementarity Effect ◽  
Deterioration Rate ◽  
Pricing Decision ◽  
Proposed Model ◽  
Total Profit ◽  
Fashion Apparel

Fashionable clothing is susceptible to seasonality, fashion popularity, and other factors. The decline in the fashion level for fashion apparel will cause its market value to continuously decrease, reducing market demand and creating a backlog of apparel inventory. Under such a circumstance, the apparel retailer chooses to maintain the fashion of the goods by providing experiential services or enhancing product design capabilities. This paper focuses on the discussions on the issue of whether experience service and design efforts are complements or substitutes. The major objective is to simultaneously determine the experience service investment and the optimal selling price to maximize the total profit. First, a Cobb–Douglas utility function is used to derive a demand function that depends on the price and fashion level. Four kinds of inventory models are further established to obtain optimal pricing and inventory ordering strategies. Second, an algorithm is presented to search for the optimal solutions of the proposed model. Finally, a numerical example is provided to perform a sensitivity analysis of the key parameters and to discuss specific managerial insights. The numerical examples show that both the experiential services and the enhanced fashion design can effectively reduce the apparel company’s inventory and increase profits. When the two strategies are combined, they will produce complementary or substitution effects, which depend on the deterioration rate of the fashion level of the apparel. If the deterioration rate is less than a critical value, the interaction of experiential services and design investment has a complementarity effect.

Study on Discrimination Pricing Model of Closed-Loop Supply Chain with Product Remanufacturing

2012 ◽  
Vol 452-453 ◽  
pp. 663-668 ◽  
Author(s):  
Hong Wei Jiang
Keyword(s):  
Supply Chain ◽  
Environmental Protection ◽  
Closed Loop ◽  
New Product ◽  
Coordination Mechanism ◽  
Optimal Pricing ◽  
Pricing Model ◽  
Supply Chain System ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions

With awareness of environmental protection strengthens and constraints of regulations and laws to environmental protection increasing, more and more enterprises focus on the closed-loop supply chain management. Considering difference between new product and remanufactured product, this paper constructs closed-loop supply chain system with manufacturers recycling used products directly from the consumers based on game theory. The optimal pricing decisions and the optimal profit of centralized and decentralized closed-loop supply chain are obtained. It is found that the efficiency of decentralized closed-loop supply chain decreases by 25%. At last, the coordination mechanism is designed to solve the profit conflict in the decentralized closed-loop supply chain by the two-part tariff contract.

Research on Coordination in the Closed-Loop Supply Chain with Remanufacturing

2012 ◽  
Vol 220-223 ◽  
pp. 319-322
Author(s):  
Hong Wei Jiang
Keyword(s):  
Game Theory ◽  
Supply Chain ◽  
Closed Loop ◽  
New Product ◽  
Profit Sharing ◽  
Coordination Mechanism ◽  
Optimal Pricing ◽  
Supply Chain System ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions

Based on game theory, this paper constructs closed-loop supply chain system with retailer recycling used products from the consumers incorporating difference between new product and remanufactured product. The optimal pricing decisions and the optimal profits of centralized coordinated and decentralized closed-loop supply chain are obtained. It is found that the efficiency of decentralized closed-loop supply chain decreases by 25%. Finally, the coordination mechanism is designed to solve the profit conflict in the decentralized closed-loop supply chain by the profit sharing contract.

Pricing Strategy Dynamic Simulation Modelling within the High-Tech Sector

2011 ◽  
Vol 495 ◽  
pp. 167-170 ◽  
Author(s):  
Marina C. Terzi ◽  
Damianos P. Sakas ◽  
Ioannis Seimenis
Keyword(s):  
New Product Development ◽  
New Product ◽  
Simulation Modelling ◽  
Pricing Strategy ◽  
High Tech ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
High Tech Sector ◽  
Optimal Pricing Strategy ◽  
Dynamic Simulation Modelling

New Product Development (NPD) in the high-tech sector is a rapid paced concept that requires constant efforts and great market awareness. Pricing has received little attention from companies, even if systematic pricing monitoring may lead to serious conclusions regarding the proper allocation of resources and the segmentation of the marketplace. The purpose of the present study is to develop the concept of pricing strategies simulation modelling for the development of new high-tech products. The Pricing Simulation Model successfully represents the process that companies should carefully consider so as to employ the optimal pricing strategy.

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