This paper describes an experimentation methodology to measure how demand varies with price and the results of its application at a toy retailer. The same product is assigned different price-points in different store panels and the resulting sales are used to estimate a demand curve. We use a variant of the k-median problem to form store panels that control for differences between stores and pr...

The conflict between the manufacturer and the retailer except the double marginalization is an important issue in order to coordinate the dual-channel supply chain. In the general case of the non-linear stochastic demand which also is affected by the sales effort of the retailer, this paper designs a new buy-back contract to coordinate the dual-channel supply chain. On the base of developing th...

Temporary price reductions (sales) are common for many goods and naturally result in large increase in the quantity sold. In previous work we found that the data support the hypothesis that these increases are, at least partly, due to dynamic consumer behavior: at low prices consumers stockpile for future consumption. In this paper we quantify the magnitude of the effect and derive the quantita...

Essays in Revenue Management and Dynamic Pricing Soheil Yousef Sibdari Doctor of Philosophy in Industrial and Systems Engineering Virginia Polytechnic Institute and State University Dr. Kyle Y. Lin, Chair In this dissertation, I study two topics in the context of revenue management. The first topic involves building a mathematical model to analyze the competition between many retailers who can ...

We review recent evidence on price rigidity from themacroeconomics literature and discuss how this evidence is used to inform macroeconomic modeling. Sluggish price adjustment is a leading explanation for the large effects of demand shocks on output and, in particular, the effects of monetary policy on output. A recent influx of data on individual prices has greatly deepenedmacroeconomists’ und...

In this paper, we consider the pricing decision of a retailer who experiences peak demand for a product during a given time interval and wishes to stabilize the demand by adjusting the sales price. The stabilization of demand brings about desirable outcomes such as a reduction in the need for capacity investment and improves the production efficiency in the supply chain. We establish a continuo...

Many aspects of the classical price-setting newsvendor problem have been studied in the literature and most of the results pertain to the case where the price-demand relationship and demand distribution are explicitly provided. However, in practice, one needs to model and estimate these from historical sales data. Furthermore, many other drivers besides price must be included in the demand resp...

Empirical product prices often show certain price endings, i.e., values after the digit, more often than others. The question arises whether price endings non-linearly affect the purchase decisions of consumers and whether firms consider these reactions in pricing. This study is the first that provides a holistic market perspective of consumer demand and firms’ pricing to answer this question. ...

We present a new model for revenue management of product sales that incorporates both dynamic pricing and a price guarantee. The guarantee provides customers with compensation if, prior to a fixed future date, the price of the product drops below a level specified at the time of purchase. We consider the problem of simultaneously determining optimal dynamic price and guarantee policies for item...

We developed an inventory model for decaying items with selling price dependent demand in inflationary environment. Deterioration rate is taken as two parameter Weibull distribution. Shortages in inventory are allowed with partial backlogging. Backlogging rate is taken as exponential decreasing function of time. Profit maximization technique is used in this study.