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Two-Period Pricing Decision on Perishable Products Considering Difference of Customer Behavior and Valuation Discount |
MAO Zhaofang,WANG Fangyuan |
Tianjin University, Tianjin, China |
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Abstract Based on the behavior features of the strategic customers, this study builds newsvendor model to make comparative analysis among the retailer’s three pricing strategies influenced by valuation discount coefficient and customers’ choice. We conclude the optimal selling price and optimal order quantity by establishing the retailer’s profit model under three strategies. We find that when the ratio of number of customers who enter in the first period and the maximum potential customers who enter in the market in the second period are larger than a certain threshold, and valuation discount coefficient of strategic customer is low, retailer should implement the “high price in-lower discounted price sale” strategy, that is, the retailer should set a high price in the first period and sell the stale products in second period at the lower discounted price to make strategic customer buy in the second period. When valuation discount coefficient of strategic customer is high, retailer should implement “high price in-higher discounted price sale” strategy. While the ratio of number of customers who enter in the first period and the maximum potential customers who enter in the market in the second period are smaller, the retailer’s pricing strategy is affected by the size of ratio of strategic customer and product availability of second period.
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Received: 12 May 2016
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