Optimal pricing model for non-instantaneous deterioration items with price and freshness sensitive demand under the e-commerce environment in China. Issue 2 (27th August 2021)

• Record Type: Journal Article
• Authors: Xu, Weihua; Zhou, Shujun; Zhao, Ketong; Shi, Yixuan; Bingzhen, Sun
• Is Part Of: Kybernetes. Volume 51:Issue 2(2022)
• Page Start: 623
• Page End: 640
• Publication Date: 2021-08-27
• Subjects: Non-instantaneous deterioration -- Pricing -- Freshness function -- Optimization; Cybernetics -- Periodicals; Systems engineering -- Periodicals; 003.505
• DOI: 10.1108/K-05-2020-0261
• Languages: English
• ISSNs: 0368-492X

Abstract

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.