We formulate a structural econometric model to analyze the impact of service attributes (warranty length, after-sales service quality) on consumer demand in the U.S.automobile industry. Our results indicate that service attributes play a compensatory role with respect to product quality, i.e., the impact of warranty length and service quality on demand increases when product quality decreases. ...

Valuing Internet retail firms is made very difficult by the fact that the firms will have to raise margins in the future in order to survive. This raises the question: can these firms raise margins? How competitive are Internet retail markets? Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quantit...

This note studies the optimal dynamic decision-making problem for a retailer in a price-sensitive, multiplicative demand framework. Our model incorporates lost sales, holding cost, fixed and variable procurement costs, as well as salvage value. We characterize the structure of the retailer’s (discounted) expected profit-maximizing dynamic inventory policy for both finite and infinite selling ho...

This study proposes a new multi-item inventory model with hybrid cost parameters under a fuzzy-stochastic constraint and permissible delay in payment. The price and marketing expenditure dependent stochastic demand and the demand dependent the unit production cost are considered. Shortages are allowed and partially backordered. The main objective of this paper is to determine selling price, mar...

The authors empirically explore the revenue impact of marketing mix variables and their interactions. The findings include: pharmaceutical direct to consumer advertising (DTC) and detailing (sales force) affect demand synergistically; detailing raises price elasticity; and, detailing has a higher ROI than DTC. Other implications and future research directions are discussed.

I will use multivariable regression analysis to create a demand equation for tobacco consumption in Ohio. My dependent variable will be pack sales per capita in Ohio (gathered from the CDC). The price variable will be represented by average cost per pack of cigarettes in Ohio (CDC data) and income will be measured using per capita disposable income in Ohio (gathered from Economagic). This paper...

We consider a dynamic pricing model in which the instantaneous rate of the demand arrival process is dependent on not only the current price charged by the concerned firm, but also the present state of the world. While reflecting the current economic condition, the state evolves in a Markovian fashion. This model represents the real-life situation in which the sales season is relatively long co...

Increasingly detailed consumer information makes sophisticated price discrimination possible. At fine levels of aggregation, demand may not obey standard regularity conditions. We propose a new randomized sales mechanism for such environments. Bidders can “buy-it-now” at a posted price, or “take-a-chance” in an auction where the top d > 1 bidders are equally likely to win. The randomized alloca...

Almost all research into the operations and behavior of salespeople has focused on sales at the retail level. But in many supply chains, manufacturers use a sales force to promote sales and improve coordination with retailers. In this note, we add an important piece to the science of sales operations by investigating the impact of two primary tasks performed by wholesale-salespersons: (1) enhan...