Dynamic pricing with "BOGO' promotion in revenue management

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We consider a dynamic pricing problem when a seller, facing uncertain demands, sells a single product in a finite horizon. The seller actively adopts dynamic pricing and quantity discount schemes. The proposed model is based on the assumption that each customer has random reservation prices and the purchase size depends on the posted price and discount. We particularly focus on the widely adopted promotional schemes buy one get one free' and 50% off' and study the optimal strategic choices of the seller. Analytical results together with numerical experiments are presented to help us obtain managerial insights. Additional numerical results for a generalised model are provided so as to examine the effectiveness of promotional schemes.
Publisher
TAYLOR & FRANCIS LTD
Issue Date
2016-09
Language
English
Article Type
Article
Citation

INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH, v.54, no.17, pp.5283 - 5302

ISSN
0020-7543
DOI
10.1080/00207543.2016.1173250
URI
http://hdl.handle.net/10203/212933
Appears in Collection
IE-Journal Papers(저널논문)
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