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Abstract The fashion features of fashion apparel continue to decrease in the sales period. Under such a circumstance, the apparel retailer tries to keep fashion by providing service efforts, such as experience service. In this study, we consider two situations that the clothes sell at fixed prices and sell at discounted prices during its selling period. Then, the optimal pricing and ordering decision are discussed. Further, the solve algorithm of models is designed using the Newton iteration method. Finally, the influence of discount factor and service effort parameter on retailer’s benefit is discussed. The research results show that for no-discount situation, the total profit of the retailer increases first and then decreases with the increase of service efforts that considered as exogenous variables. For discount situation, the retailer not only can increase the profitability by providing services, but also decrease prices appropriately to forward the discounts time point and shorten sales cycles. When the marginal benefit of the experience service effort is small, the retailer should reduce the input of the experience service effort; on the contrary, the apparel retailer has the motivation to improve the experience service.
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Received: 02 April 2018
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