Dynamic Pricing with Reservation Price Altered by Selling Price and Product Obsolescence

• Main Authors: Mei-ching Liu, 呂玫青
• Other Authors: Fu-Shiang Tseng
• Format: Others
• Language: en_US
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/8uqa86

碩士 === 國立中央大學 === 工業管理研究所 === 97 === There are a lot of available marketing tools to managers, and pricing has been the effective one. Pricing is one of the most important but also most difficult tasks that firms have to make. Nowadays, customers’ preference and purchasing behavior may change over time due to product obsolescence, especially for fashion goods. Obsolescence is related to products which are subject to rapid change in taste, fashion, style, environment, or rapidly evolving technology. As the result, the value of product in customers’ mind gradually drops. In this study, we propose a reservation price distribution which can be altered by the selling price and take into account product obsolescence. We developed three models to show how the prices change under markdown environment, and we try to determine the appropriate pricing strategy to maximize the total expected profit. Furthermore, we find some observations from the sensitivity analysis then illustrate the customers’ purchasing behavior and phenomena in the market. We observe the of the product affect by fashion A0, the product characteristics α, selling channel k and the degree of decay d helps us understand more about the relationship between customers, markets and pricing.