Pricing Strategies of Logistics Distribution Services for Perishable Commodities

The problem of pricing distribution services is challenging due to the loss in value of product during its distribution process. Four logistics service pricing strategies are constructed in this study, including fixed pricing model, fixed pricing model with time constraints, dynamic pricing model, and dynamic pricing model with time constraints in combination with factors, such as the distribution time, customer satisfaction, optimal pricing, etc. By analyzing the relationship between optimal pricing and key parameters (such as the value of the decay index, the satisfaction of consumers, dispatch time, and the storage cost of the commodity), it is found that the larger the value of the attenuation coefficient, the easier the perishable goods become spoilage, which leads to lower distribution prices and impacts consumer satisfaction. Moreover, the analysis of the average profit of the logistics service providers in these four pricing models shows that the average profit in the dynamic pricing model with time constraints is better. Finally, a numerical experiment is given to support the findings.

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OPTIMAL PRICING AND PRODUCTION POLICIES OF A MAKE-TO-STOCK SYSTEM WITH FLUCTUATING DEMAND

Probability in the Engineering and Informational Sciences ◽

10.1017/s026996480900014x ◽

2009 ◽

Vol 23 (2) ◽

pp. 205-230 ◽

Cited By ~ 26

Author(s):

Jean-Philippe Gayon ◽

Işılay Talay-Değirmenci ◽

Fikri Karaesmen ◽

E. Lerzan Örmeci

Keyword(s):

Dynamic Pricing ◽

Numerical Study ◽

Optimal Pricing ◽

Pricing Strategies ◽

Pricing Policy ◽

Stock Level ◽

Production Inventory ◽

Static Pricing ◽

Make To Stock ◽

Production Inventory System

We study the effects of different pricing strategies available to a production–inventory system with capacitated supply, which operates in a fluctuating demand environment. The demand depends on the environment and on the offered price. For such systems, three plausible pricing strategies are investigated: static pricing, for which only one price is used at all times, environment-dependent pricing, for which price changes with the environment, and dynamic pricing, for which price depends on both the current environment and the stock level. The objective is to find an optimal replenishment and pricing policy under each of these strategies. This article presents some structural properties of optimal replenishment policies and a numerical study that compares the performances of these three pricing strategies.

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Toward a Profitable ISP Business in a Competitive Environment

Social and Economic Transformation in the Digital Era ◽

10.4018/978-1-59140-158-2.ch012 ◽

2011 ◽

pp. 182-200

Author(s):

Ioanna D. Constantiou ◽

Jörn Altmann

Keyword(s):

Service Quality ◽

Dynamic Pricing ◽

Service Providers ◽

Revenue Sharing ◽

Competitive Environment ◽

Internet Service Providers ◽

Pricing Strategies ◽

Internet Service ◽

Flat Rate ◽

Pricing Schemes

The market of Internet service providers (ISPs) is highly competitive. Although many different pricing schemes could be deployed in this market, two types are mainly offered: flat rate pricing and per-minute pricing. These pricing schemes are criticised for limiting ISPs’ revenues and for not addressing customer’s requirements on service quality. We focus on the ISPs’ business relationships and on their pricing strategies in order to analyse revenue sharing mechanisms. We argue that the introduction of incentive pricing schemes, such as dynamic pricing, may enable provision of service quality by improving revenue sharing among ISPs.

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Dynamic Pricing for Resource Consumption in Cloud Service

Wireless Communications and Mobile Computing ◽

10.1155/2018/4263831 ◽

2018 ◽

Vol 2018 ◽

pp. 1-11

Author(s):

Bin Cao ◽

Kai Wang ◽

Jinting Xu ◽

Chenyu Hou ◽

Jing Fan ◽

...

Keyword(s):

Dynamic Pricing ◽

Service Providers ◽

Cloud Service ◽

Resource Consumption ◽

Pricing Model ◽

Cloud Resource ◽

The One ◽

The Cost ◽

Demand Service ◽

Cloud Resources

This paper studies dynamic pricing for cloud service where different resources are consumed by different users. The traditional cloud resource pricing models can be divided into two categories: on-demand service and reserved service. The former only takes the using time into account and is unfair for the users with long using time and little concurrency. The latter charges the same price to all the users and does not consider the resource consumption of users. Therefore, in this paper, we propose a flexible dynamic pricing model for cloud resources, which not only takes into account the occupying time and resource consumption of different users but also considers the maximal concurrency of resource consumption. As a result, on the one hand, this dynamic pricing model can help users save the cost of cloud resources. On the other hand, the profits of service providers are guaranteed. The key of the pricing model is how to efficiently calculate the maximal concurrency of resource consumption since the cost of providers is dynamically varied based on the maximal concurrency. To support this function in real time, we propose a data structure based on the classical B+ tree and the implementation for its corresponding basic operations like insertion, deletion, split, and query. Finally, the experiment results show that we can complete the dynamic pricing query on 10 million cloud resource usage records within 0.2 seconds on average.

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Dynamic Pricing of a Web Service in an Advance Selling Environment

Mathematical Problems in Engineering ◽

10.1155/2015/783149 ◽

2015 ◽

Vol 2015 ◽

pp. 1-21 ◽

Cited By ~ 1

Author(s):

Ehram Safari ◽

Masoud Babakhani ◽

Seyed Jafar Sadjadi ◽

Kamran Shahanaghi ◽

Khadijeh Naboureh

Keyword(s):

Web Service ◽

Dynamic Pricing ◽

Service Providers ◽

Pricing Strategies ◽

State Variables ◽

Pricing Policy ◽

Service Levels ◽

Time Optimal ◽

Reservation System ◽

The Web

Consider a web service with different quality of service levels where users may purchase their required web service through a reservation system. The service provider adjusts prices of web service classes over a prespecified time horizon to manage demand and maximize profit. Users may cancel their services as long as they pay a penalty. One of the important challenges for service providers is capacity limitation of the resources employed in offering the web service. Thus, taking this important proposition into account makes pricing strategies considered by the provider has more credit. Another important factor in determining pricing strategies discussed in the present paper is the market influence which can increase or decrease the price that the provider offers. This paper develops a continuous time optimal control model for identifying pricing strategies for the web service classes. We study the optimality condition of the considered model based on maximum principal and propose an algorithm to obtain the optimal pricing policy. Moreover, we perform numerical analyses to evaluate the effect of some parameters on control and state variables and objective function. In addition, we compare the proposed algorithm with genetic algorithm (GA) and simulated annealing (SA) available in Matlab.

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Dynamic Optimal Pricing of Ridesharing Platforms under Network Externalities with Stochastic Demand

Complexity ◽

10.1155/2021/6442797 ◽

2021 ◽

Vol 2021 ◽

pp. 1-16

Author(s):

Wenjie Wang ◽

Lei Xie

Keyword(s):

Social Welfare ◽

Dynamic Pricing ◽

Network Externalities ◽

Stochastic Demand ◽

Optimal Pricing ◽

Pricing Strategies ◽

Declining Demand ◽

Negative Effect ◽

Demand Scenario ◽

Uncertain Supply

Ridesharing two-sided platforms link the stochastic demand side and the self-scheduling capacity supply side where there are network externalities. The main purpose of this paper is to establish the optimal pricing model of ridesharing platforms to dynamically coordinate uncertain supply and stochastic demand with network externalities in order to maximize platforms’ revenue and social welfare. We propose dynamic pricing strategies under two demand scenarios that minimize order loss in the surge demand period and maximize social welfare in the declining demand period. The numerical simulation results show that dynamic pricing strategies could stimulate the supply to reduce delayed orders in the surge demand scenario and adjust the demand to maximize social welfare under declining demand scenario. Additionally, we further find that the direct network externalities positively influence the platforms’ revenue, and the indirect network externalities have a negative effect on social welfare in the declining demand scenario, and a higher wage ratio cannot enhance the platforms’ revenue.

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Dynamic Pricing for Airline Revenue Management under Passenger Mental Accounting

Mathematical Problems in Engineering ◽

10.1155/2015/836434 ◽

2015 ◽

Vol 2015 ◽

pp. 1-8 ◽

Cited By ~ 2

Author(s):

Yusheng Hu ◽

Jinlin Li ◽

Lun Ran

Keyword(s):

Decision Making ◽

Dynamic Pricing ◽

Mental Accounting ◽

Dynamic Programming Method ◽

Optimal Pricing ◽

Decision Making Process ◽

Pricing Strategies ◽

Human Decision ◽

Pricing Problems ◽

Positive Effect

Mental accounting is a far-reaching concept, which is often used to explain various kinds of irrational behaviors in human decision making process. This paper investigates dynamic pricing problems for single-flight and multiple flights settings, respectively, where passengers may be affected by mental accounting. We analyze dynamic pricing problems by means of the dynamic programming method and obtain the optimal pricing strategies. Further, we analytically show that the passenger mental accounting depth has a positive effect on the flight’s expected revenue for the single flight and numerically illustrate that the passenger mental accounting depth has a positive effect on the optimal prices for the multiple flights.

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Advances in Pricing Strategies and Tactics

The Oxford Handbook of Managerial Economics ◽

10.1093/oxfordhb/9780199782956.013.0010 ◽

2013 ◽

pp. 202-235

Author(s):

Praveen K. Kopalle ◽

Robert Hansen

Keyword(s):

Conjoint Analysis ◽

Price Discrimination ◽

Dynamic Pricing ◽

Recent Literature ◽

Structural Models ◽

Stackelberg Games ◽

Optimal Pricing ◽

Pricing Strategies ◽

Research And Practice ◽

Dynamic Structural Models

There has been much interest in pricing strategies and tactics both in the research and practice domains. This chapter examines the recent literature on pricing with a focus on blending an economics approach with that of marketing. It begins with a brief discussion of the fundamental principles of optimal pricing, which serves as the foundation for the more advanced pricing methods. The chapter provides an in-depth discussion in the areas of second degree price discrimination, bundling strategies, revenue management, pricing using conjoint analysis, dynamic pricing, price psychology, personalized pricing, competitive considerations in pricing (Nash and Stackelberg games), dynamic structural models in pricing, and pricing in two-sided markets. The end of the chapter provides brief concluding remarks.

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Investigating logistics service quality in omni-channel retailing

International Journal of Physical Distribution & Logistics Management ◽

10.1108/ijpdlm-06-2016-0161 ◽

2017 ◽

Vol 47 (4) ◽

pp. 263-296 ◽

Cited By ~ 59

Author(s):

Monique Murfield ◽

Christopher A. Boone ◽

Paige Rutner ◽

Rodney Thomas

Keyword(s):

Service Quality ◽

Consumer Satisfaction ◽

Service Providers ◽

Three Dimensions ◽

Consumer Loyalty ◽

Content Type ◽

Logistics Service ◽

Logistics Service Quality ◽

The Impact ◽

The Relationship

Purpose The purpose of this paper is to investigate the impact of logistics service quality (LSQ) on consumer satisfaction and loyalty in an omni-channel retail environment. Design/methodology/approach An empirical, survey-based approach is used to collect data from consumers about experiences with two different omni-channel retail scenarios: buy-online-pickup-in-store (BOPS), and buy-in-store-ship-direct (BSSD). Participants responded to questions regarding the LSQ, consumer satisfaction, and consumer loyalty relative to their actual experience in one of these situations. Findings Results suggest that omni-channel consumers are truly unique, and all three dimensions of LSQ (condition, availability, and timeliness) are distinct in their impact on satisfaction and loyalty. Results suggest that in the BOPS sample, consumer satisfaction partially mediates the relationship between condition and loyalty and fully mediates the relationship between timeliness and loyalty. In the BSSD model, consumer satisfaction partially mediates the relationship between timeliness and consumer loyalty. Research limitations/implications This research studies LSQ in two different omni-channel scenarios; additional research is needed to explore other omni-channel scenarios and extend the findings to be more generalizable. Practical implications Managers should recognize that for omni-channel consumers, timeliness is the essential driver of satisfaction and loyalty. Retailers need to account for this reality and dedicate substantial resources to meet delivery requirements in a timely manner. Logistics service providers need to emphasize speed and reliability of their delivery processes for omni-channel consumers. Originality/value This research is the first attempt at conceptualizing LSQ in an omni-channel supply chain, and testing the impact of LSQ on consumer satisfaction and loyalty.

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