Dynamic Pricing of Perishable Products under Consumer Factor
Yanming Ge, Jianxin Zhang
.
DOI: 10.4236/jssm.2011.44049   PDF    HTML     5,199 Downloads   9,058 Views   Citations

Abstract

With effect of consumer factor considered, a model for dynamic pricing of perishable products is proposed. By this model, we obtained a property of the value function: marginal value is a decreasing function of the capacity and an increasing function of the consumer factor. Basing on this property, we proposed the following pricing strategy: according to the regions that the perishable products are sold, we adopt the appropriate consumer factor and then use the routine pricing strategy. This strategy not only maximizes the retailer’s revenue but also improves its service level. Lastly, a constructive example is discussed.

Share and Cite:

Y. Ge and J. Zhang, "Dynamic Pricing of Perishable Products under Consumer Factor," Journal of Service Science and Management, Vol. 4 No. 4, 2011, pp. 440-444. doi: 10.4236/jssm.2011.44049.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] S. Nahmias, “Perishable Inventory Theory: A Review,” Operations Research, Vol. 30, No. 4, 1980, pp. 680-708. doi:10.1287/opre.30.4.680
[2] G. Gallego and G. Van Ryzin, “Optimal Dynamic Pricing of Inventories with Stochastic Demand over Finite Horizons,” Management Science, Vol. 40, No. 8, 1994, pp. 999-1018. doi:10.1287/mnsc.40.8.999
[3] Britan and V. S. Mondschiin, “Periodic Pricing of Seasonal Products in Retailing,” Management Science, Vol. 43, No. 1, 1997, pp. 64-79.
[4] W. Zhao and Y. S. Zheng, “Optimal Dynamic Pricing for Perishable Assets with Non-Homogeneous Demand,” Management Science, Vol. 46, No. 3, 2000, pp. 375-388.
[5] G. Das Varma and N. Vettas, “Optimal Dynamic Pricing with Inventories,” Economics Letters, Vol. 72, 2001, pp. 335-340. doi:10.1016/S0165-1765(01)00439-6
[6] Y. Feng and G. Gallego, “Perishable Asset Revenue Management with Markovian Time Dependent Demand Intensities,” Management Science, Vol. 46, No. 7, 2000, pp. 941-956. doi:10.1287/mnsc.46.7.941.12035
[7] D. Zhang and W. L. Cooper, “Pricing Substitutable Flights in Airline Revenue Management,” European Journal of Operations Research, Vol. 197, No. 3, 2009, pp. 848-861. doi:10.1016/j.ejor.2006.10.067
[8] L. Dong, P. Kouvelis and Z. Tian, “Dynamic pricing and inventory control of substitute products”, Manufacturing Service Operations Management, Vol. 11, No. 2, 2009, pp. 317-339. doi:10.1287/msom.1080.0221
[9] Y. Akcay, H. P. Natarajan and S. H. Xu, “Joint Dynamic Pricing of Multiple Perishable Products Under Consumer Choice,” Management Science, Vol. 56, No. 8, 2010, pp. 1345-1361. doi:10.1287/mnsc.1100.1178

Copyright © 2024 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.