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| Research on Multiple Products Pricing and Assortment under Consumer Returns |
| GUO Xiaolong，CHENG Yuxing，HUANG Ganquan，YU Yugang |
| University of Science and Technology of China, Hefei, China |
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Abstract This study considers the sales problem of an online retailer making joint pricing and refund rate decisions for multiple substitute products that may be returned by consumers during a certain sales season. The nested logit model is adopted in this study to describe and analyze the consumer’s purchase and return behaviors, and the optimal solution of this sales problem is proved to exist and be unique. The results show that, within a certain scale, the more products sold on the market by the retailer at the same time, the higher optimal price and refund rate of each product, and although the profitability of a single product will be weakened, the retailer will obtain more total profits finally. Furthermore, considering the problem that the retailer’s number of products could not be increased infinitely due to various limitations in practice, this study introduces the optimal strategy for products assortment, which provides some theoretical guidance for firms to make relevant decisions.
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Received: 08 December 2020
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