Joint dynamic pricing and preservation technology investment for an integrated supply chain with reference price effects

2018 ◽  
Vol 69 (6) ◽  
pp. 811-824 ◽  
Author(s):  
Chung-Yuan Dye ◽  
Chih-Te Yang ◽  
Chi-Chuan Wu
Keyword(s):  
Supply Chain ◽  
Dynamic Pricing ◽  
Reference Price ◽  
Technology Investment ◽  
Preservation Technology ◽  
Price Effects ◽  
Preservation Technology Investment ◽  
Integrated Supply Chain

Optimal dynamic pricing, preservation technology investment and periodic ordering policies for agricultural products

2019 ◽  
Vol 53 (3) ◽  
pp. 731-747 ◽  
Author(s):  
Jing Lu ◽  
Jianxiong Zhang ◽  
Xinyun Jia ◽  
Guowei Zhu
Keyword(s):  
Inventory Management ◽  
Dynamic Pricing ◽  
Optimal Strategies ◽  
Solution Procedure ◽  
Agricultural Products ◽  
Pricing Policy ◽  
Technology Investment ◽  
Deterioration Rate ◽  
Preservation Technology ◽  
Preservation Technology Investment

This paper focuses on the inventory management of agricultural products, a specific type of perishable items carrying the deterioration property. In practice, the deterioration rate of agricultural products is varying with time and can be slowed downviainvesting in the preservation technology. This objective of this paper is to maximize the firm’s total profit per unit time by simultaneously determining dynamic pricing, replenishment cycle length, replenishment quantity and preservation technology investment. We first derive pricing policy by solving a dynamic optimization problem and then propose a solution procedure to obtain the optimal strategies that maximize profit. Furthermore, numerical examples and sensitivity analysis are conducted to gain more managerial insights. We find that the firm should take a penetration pricing policy. In addition, if the shelf life of products is very long, the firm should not take preservation technology investment. When the unit holding cost is relatively small or the unit purchasing cost is relatively large, the firm should increase preservation technology investment.

scholarly journals Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

2021 ◽  
Vol 16 (5) ◽  
pp. 1492-1516
Author(s):  
Wenhua Hou ◽  
Yuwen Zeng
Keyword(s):  
Supply Chain ◽  
Discount Rate ◽  
Reference Price ◽  
Stackelberg Game ◽  
Lower Boundary ◽  
Retail Price ◽  
Reference Points ◽  
Price Effects ◽  
Retail Prices ◽  
Online Book

(1) Background: A binding recommended retail price has been used in several markets in a variety of forms, and the book market is a typical example. Publishers sell books to online retailers at a unit wholesale discount computed on the cover price. Retailers are then allowed to set the retail price. Therefore, if consumers regard the cover prices as reference points, then they may be more likely to purchase books if retail prices are lower than the cover prices. (2) Methods: We develop a Stackelberg game model for a book supply chain to investigates how reference price effects affect retailers and publisher’s pricing strategies. (3) Results: The results show that retailers will sell printed books at a discount only when the publisher’s wholesale discount rate is not high. Further, as the intensity of the reference price effects increases, (a) the lower boundary of the wholesale discount rate rises, (b) publishers’ profits increase and (c) retailers’ profits increase relative to the level of consumers’ e-books acceptance. (4) Conclusions: This result is related to the fact that the online retailer, such as Amazon and JD.com, like to invoke reference price effects in consumers’ minds by highlighting the printed book’s discount rate.

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