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Joint Ordering and Pricing Decisions for New Repeat-Purchase Products
Joint Authors
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2015, Issue 2015 (31 Dec. 2015), pp.1-8, 8 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2015-07-09
Country of Publication
Egypt
No. of Pages
8
Main Subjects
Abstract EN
This paper studies ordering and pricing problems for new repeat-purchase products.
We incorporate the repeat-purchase rate and price effects into the Bass model to characterize the demand pattern.
We consider two decision models: (1) two-stage decision model, in which the sales division chooses a price to maximize the gross profit and the purchasing division determines an optimal ordering decision to minimize the total cost under a given demand subsequently, and (2) joint decision model, in which the firm makes ordering and pricing decisions simultaneously to maximize the profit.
We combine the generalized Bass model with dynamic lot sizing model to formulate the joint decision model.
We apply both models to a specific imported food provided by an online fresh produce retailer in Central China, solve them by Gaussian Random-Walk and Wagner-Whitin based algorithms, and observe three results.
First, joint pricing and ordering decisions bring more significant profits than making pricing and ordering decisions sequentially.
Second, a great initiative in adoption significantly increases price premium and profit.
Finally, the optimal price shows a U-shape (i.e., decreases first and increases later) relationship and the profit increases gradually with the repeat-purchase rate when it is still not very high.
American Psychological Association (APA)
Wu, Xiang& Zhang, Jinlong. 2015. Joint Ordering and Pricing Decisions for New Repeat-Purchase Products. Discrete Dynamics in Nature and Society،Vol. 2015, no. 2015, pp.1-8.
https://search.emarefa.net/detail/BIM-1060517
Modern Language Association (MLA)
Wu, Xiang& Zhang, Jinlong. Joint Ordering and Pricing Decisions for New Repeat-Purchase Products. Discrete Dynamics in Nature and Society No. 2015 (2015), pp.1-8.
https://search.emarefa.net/detail/BIM-1060517
American Medical Association (AMA)
Wu, Xiang& Zhang, Jinlong. Joint Ordering and Pricing Decisions for New Repeat-Purchase Products. Discrete Dynamics in Nature and Society. 2015. Vol. 2015, no. 2015, pp.1-8.
https://search.emarefa.net/detail/BIM-1060517
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1060517