A Dynamic Model of Product Quality and Pricing Decisions on Sales Response

1993 ◽  
Vol 24 (5) ◽  
pp. 893-908 ◽  
Author(s):  
Ram Narasimhan ◽  
Soumen Ghosh ◽  
David Mendez
Keyword(s):  
Product Quality ◽  
Dynamic Model ◽  
Pricing Decisions ◽  
Sales Response

Meet-the-competition clauses and the strategic disclosure of product quality

2016 ◽  
Vol 16 (4) ◽  
Author(s):  
Cristián Troncoso-Valverde
Keyword(s):  
Product Quality ◽  
Strategic Disclosure ◽  
Pricing Decisions ◽  
Monopoly Pricing ◽  
Disclosure Of Information ◽  
Quality Of Products ◽  
States Of Nature

Abstract I examine the implications of meet-the-competition clauses (MCCs) for the strategic disclosure of product quality in a duopoly in which sellers can adopt these clauses before setting their prices. I show that MCCs generate incentives for the disclosure of product quality because these clauses facilitate monopoly pricing in states of nature in which the quality of products is the same. This suggests that MCCs may encourage the disclosure of information because sellers can use them to coordinate their pricing decisions based on the information revealed through disclosure.

scholarly journals Competitive Pricing of Innovative Products with Consumers’ Social Learning

2020 ◽  
Vol 12 (9) ◽  
pp. 3806
Author(s):  
Lu Xiao ◽  
Hang Zhang ◽  
Yong Qin
Keyword(s):  
Social Learning ◽  
Product Quality ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Pricing Decisions ◽  
Duopoly Model ◽  
Innovative Products ◽  
Valuation Uncertainty ◽  
Competitive Pricing ◽  
Over Time

Consumers often face valuation uncertainty when innovative products are introduced into market, and they may update the valuation about product quality based on historical sales information over time. Based on this background, this study constructed a two-period duopoly model of innovative products and investigated the effect of consumers’ social learning on enterprises’ pricing strategies and profits. Optimal pricing decisions for competitive enterprises with and without consumers’ social learning were obtained. It was found that consumers’ social learning will intensify competition between enterprises, which will lower their prices and profits. The stronger the learning intensity of consumers, the greater the profit loss for enterprises.

A Dynamic Model of Brand Choice When Price and Advertising Signal Product Quality

2008 ◽  
Vol 27 (6) ◽  
pp. 1111-1125 ◽  
Author(s):  
Tülin Erdem ◽  
Michael P. Keane ◽  
Baohong Sun
Keyword(s):  
Product Quality ◽  
Dynamic Model ◽  
Brand Choice

scholarly journals Managing strategies of product quality and price based on trust under different power structures

2021 ◽  
Author(s):  
Xiao Fu ◽  
Shuchun Liu ◽  
Wendi Shen ◽  
Guanghua Han
Keyword(s):  
Supply Chain ◽  
Numerical Analysis ◽  
Product Quality ◽  
Stackelberg Game ◽  
Order Quantity ◽  
Power Structures ◽  
Trust Value ◽  
Pricing Decisions ◽  
Bertrand Game ◽  
Theoretical And Numerical Analysis

This paper investigates the quality and pricing decisions in a supply chain consists of one retailer and two manufacturers. The retailer updates the trust value to manufacturers based on the historical information of product quality to determine the actual order quantity. We propose four game models by considering two situations, i.e., manufacturer-dominant scenario and retailer-dominant scenario.  Based on theoretical and numerical analysis， we obtain a series of valuable management insights. For example, when a manufacturer with unreliable product quality is the leader and competes with another reliable manufacturer, the retailer’s profit would eventually surpass that of two stronger manufacturers. When the retailer is the leader, the retailer’s profit is often greater when two manufacturers engage in the Stackelberg game rather than that in Bertrand game, and the manufacturer with unreliable product quality can make profit no less than that of another manufacturer with reliable quality.

Decision strategies in reward-based crowdfunding: the role of crowdfunding platforms

2019 ◽  
Vol 14 (3) ◽  
pp. 569-589
Author(s):  
Gongbing Bi ◽  
Qinghua Xiang ◽  
Botao Geng ◽  
Qiong Xia
Keyword(s):  
Product Quality ◽  
Opportunity Cost ◽  
Unit Cost ◽  
Difficulty Level ◽  
Quality Level ◽  
Optimal Price ◽  
Unimodal Function ◽  
Content Type ◽  
Pricing Decisions ◽  
Basic Model

Purpose The purpose of this paper is to investigate the influence of the crowdfunding platforms on reward-based crowdfunding projects. This study offers guidance for the creator on how to choose among platforms and how to make optimal product and pricing decisions. Design/methodology/approach Usually, crowdfunding platforms are able to help creators to lower unit costs and charge platform fees in return. In this paper, the reduction of the unit cost and the platform fee are selected for determining the competitive strength (CS) of a platform. Then, the CS affecting the creators and the backers of the projects is analyzed. Findings In the basic model, when the product quality level is exogenous, the optimal price increases in the product quality level and decreases in the difficulty level of the project, while the corresponding expected profit is a unimodal function of the product quality level and the difficulty level. In the endogenous case, the optimal price is exactly twice the unit cost. With the influence of platforms, platforms with higher CS tend to help the creator to lower the prices and to achieve higher profitability. Moreover, platforms with higher CS usually help the creator to offer higher quality products and to charge higher prices. Research limitations/implications The opportunity cost is zero in this paper. In reality, backers arrive at the project in different order. Usually, earlier backers bare more opportunity cost and risk. Originality/value To the best of authors’ knowledge, this paper is the first one to offer suggestions for creators on how to choose among crowdfunding platforms. The study provides theoretical guidance on product and pricing decisions on an analytical side.

scholarly journals Handling Constraints and Raw Material Variability in Rotomolding through Data-Driven Model Predictive Control

Processes ◽  
2019 ◽  
Vol 7 (9) ◽  
pp. 610 ◽  
Author(s):  
Abhinav Garg ◽  
Hassan A. Abdulhussain ◽  
Prashant Mhaskar ◽  
Michael R. Thompson
Keyword(s):  
Model Predictive Control ◽  
Product Quality ◽  
Dynamic Model ◽  
Predictive Control ◽  
Raw Material ◽  
Data Driven ◽  
Rotational Molding ◽  
Molding Process ◽  
Internal Mold ◽  
Raw Material Variability

This work addresses the problems of uniquely specifying and robustly achieving user-specified product quality in a complex industrial batch process, which has been demonstrated using a lab-scale uni-axial rotational molding process. In particular, a data-driven modeling and control framework is developed that is able to reject raw material variation and achieve product quality which is specified through constraints on quality variables. To this end, a subspace state-space model of the rotational molding process is first identified from historical data generated in the lab. This dynamic model predicts the evolution of the internal mold temperature for a given set of input move trajectory (heater and compressed air profiles). Further, this dynamic model is augmented with a linear least-squares based quality model, which relates its terminal (states) prediction with key quality variables. For the lab-scale process, the chosen quality variables are sinkhole area, ultrasonic spectra amplitude, impact energy and shear viscosity. The complete model is then deployed within a model-based control scheme that facilitates specifying on-spec products via limits on the quality variables. Further, this framework is demonstrated to be capable of rejecting raw material variability to achieve the desired specifications. To replicate raw material variability observed in practice, in this work, the raw material is obtained by blending the matrix resin with a resin of slightly different viscosity at varying weight fractions. Results obtained from experimental studies demonstrate the capability of the proposed model predictive control (MPC) in meeting process specifications and rejecting raw material variability.

scholarly journals Quality and Pricing Decisions in a Two-Echelon Supply Chain with Nash Bargaining Fairness Concerns

2018 ◽  
Vol 2018 ◽  
pp. 1-19 ◽  
Author(s):  
Ji-cai Li ◽  
Ji-hong Lu ◽  
Qi-liang Wang ◽  
Changwen Li
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Bargaining Power ◽  
Reference Points ◽  
Nash Bargaining ◽  
Quality Level ◽  
Pricing Strategies ◽  
Pricing Decisions ◽  
Decision Structure ◽  
Fairness Concern

Product quality and pricing, as the important competitive tools, play a key role in attracting consumers. In a supply chain, the decisions on product quality and pricing are usually interlinked and would influence the cooperation relation between the members, especially when they are fairness-concerned and have different bargaining power. However, linking the quality and pricing decisions to the decision-makers’ behavioral factors such as fairness concern draws a little attention in the literature of supply chain management. This paper incorporates the members’ fairness preference and bargaining power into the product quality and pricing decisions in a two-echelon supply chain, where the supplier offers core components with a certain quality level to the downstream manufacturer, who subsequently sells the final products in the end market. Both the supplier and the manufacturer are assumed to be fairness-concerned by adopting Nash bargaining solutions as their fairness reference points. We use game-theoretic models to analyze the equilibrium product quality and pricing strategies under the setting of integrated and decentralized supply chain, respectively. Detailed comparisons and sensitivity analysis are further conducted to examine the impacts of members’ strengths of fairness concern, bargaining power, and decision structure on their equilibrium product quality and pricing strategies and corresponding payoffs.

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