Optimal pricing model for non-instantaneous deterioration items with price and freshness sensitive demand under the e-commerce environment in China
ISSN: 0368-492X
Article publication date: 27 August 2021
Issue publication date: 7 February 2022
Abstract
Purpose
The purpose of this paper is to focus on determining the optimal sales price for non-instantaneous deterioration items according to consideration of freshness and demand.
Design/methodology/approach
In this model, the authors have described the demand function which is dependent on price as well time. The products that the deterioration is considered as non-instantaneous have a determinate shelf life, and their demand rate will decrease over time after the beginning of the selling period. This paper depicts that the total profit of non-instantaneous deterioration items using the dynamic pricing strategy is higher than that using fixed pricing strategy.
Findings
Finally, to illustrate and validate the model, the authors have used some numerical examples. A new freshness function and the model to study pricing policy are developed as well applied to solve managerial decision problems.
Originality/value
This paper complements the lack of the existing theoretical research of pricing for non-instantaneous deterioration items under an e-commerce environment. A new freshness function and the model to study pricing policy are developed as well applied to solve managerial decision problems.
Keywords
Acknowledgements
The authors are very grateful to the Editor-in-Chief Professor Vojko Potočan and the anonymous referees for their thoughtful comments and valuable suggestions. Some remarks directly benefit from the referees’ comments. The work was partly supported by the National Natural Science Foundation of China (72071152, 71571090), the Xi’an Science and Technology Projects (XA2020-RKXYJ-0086), The Project of Guangdong Education Department (2018GWQNCX050), the China Postdoctoral Science Foundation Funded Project (2020M670046ZX).
Citation
Xu, W., Zhou, S., Zhao, K., Shi, Y. and Bingzhen, S. (2022), "Optimal pricing model for non-instantaneous deterioration items with price and freshness sensitive demand under the e-commerce environment in China", Kybernetes, Vol. 51 No. 2, pp. 623-640. https://doi.org/10.1108/K-05-2020-0261
Publisher
:Emerald Publishing Limited
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