Abstract
As post-season clearance sales become more prevalent, more customers postpone their purchases and wait for the clearance price. This form of strategic waiting can reduce retailers’ revenue. As a way to mitigate the negative effect of strategic waiting, we analyze two sales mechanisms in this chapter. The first sales mechanism deals with the way inventory information is conveyed to customers. Specifically, we consider two types of inventory display formats under which the retailer can either display all (DA) available units to the customers or display one (DO) unit at a time so that customers have perfect (imperfect) information about the actual inventory level under the DA (DO) display format. The second sales mechanism involves an additional purchasing option that allows each customer to make a “non-withdrawable reservation.” Specifically, if a customer reserves an item during the season and the reserved item remains unsold at the end of the season, then this customer is obligated to purchase the reserved item at the clearance price. In this chapter, we analyze the implications of these two sales mechanisms on the customers’ strategic purchasing behavior, the retailer’s optimal pricing and ordering decisions, and the retailer’s expected profit.
| Original language | English (US) |
|---|---|
| Title of host publication | International Series in Operations Research and Management Science |
| Publisher | Springer New York LLC |
| Pages | 353-370 |
| Number of pages | 18 |
| Volume | 131 |
| DOIs | |
| State | Published - 2009 |
Publication series
| Name | International Series in Operations Research and Management Science |
|---|---|
| Volume | 131 |
| ISSN (Print) | 08848289 |
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ASJC Scopus subject areas
- Management Science and Operations Research
- Strategy and Management
- Applied Mathematics
- Computer Science Applications
- Software
Cite this
Mitigating the adverse impact of strategic waiting in dynamic pricing settings : A study of two sales mechanisms. / Aviv, Yossi; Tang, Christopher S.; Yin, Rui.
International Series in Operations Research and Management Science. Vol. 131 Springer New York LLC, 2009. p. 353-370 (International Series in Operations Research and Management Science; Vol. 131).Research output: Chapter in Book/Report/Conference proceeding › Chapter
}
TY - CHAP
T1 - Mitigating the adverse impact of strategic waiting in dynamic pricing settings
T2 - A study of two sales mechanisms
AU - Aviv, Yossi
AU - Tang, Christopher S.
AU - Yin, Rui
PY - 2009
Y1 - 2009
N2 - As post-season clearance sales become more prevalent, more customers postpone their purchases and wait for the clearance price. This form of strategic waiting can reduce retailers’ revenue. As a way to mitigate the negative effect of strategic waiting, we analyze two sales mechanisms in this chapter. The first sales mechanism deals with the way inventory information is conveyed to customers. Specifically, we consider two types of inventory display formats under which the retailer can either display all (DA) available units to the customers or display one (DO) unit at a time so that customers have perfect (imperfect) information about the actual inventory level under the DA (DO) display format. The second sales mechanism involves an additional purchasing option that allows each customer to make a “non-withdrawable reservation.” Specifically, if a customer reserves an item during the season and the reserved item remains unsold at the end of the season, then this customer is obligated to purchase the reserved item at the clearance price. In this chapter, we analyze the implications of these two sales mechanisms on the customers’ strategic purchasing behavior, the retailer’s optimal pricing and ordering decisions, and the retailer’s expected profit.
AB - As post-season clearance sales become more prevalent, more customers postpone their purchases and wait for the clearance price. This form of strategic waiting can reduce retailers’ revenue. As a way to mitigate the negative effect of strategic waiting, we analyze two sales mechanisms in this chapter. The first sales mechanism deals with the way inventory information is conveyed to customers. Specifically, we consider two types of inventory display formats under which the retailer can either display all (DA) available units to the customers or display one (DO) unit at a time so that customers have perfect (imperfect) information about the actual inventory level under the DA (DO) display format. The second sales mechanism involves an additional purchasing option that allows each customer to make a “non-withdrawable reservation.” Specifically, if a customer reserves an item during the season and the reserved item remains unsold at the end of the season, then this customer is obligated to purchase the reserved item at the clearance price. In this chapter, we analyze the implications of these two sales mechanisms on the customers’ strategic purchasing behavior, the retailer’s optimal pricing and ordering decisions, and the retailer’s expected profit.
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U2 - 10.1007/978-0-387-98026-3_13
DO - 10.1007/978-0-387-98026-3_13
M3 - Chapter
AN - SCOPUS:84874768523
VL - 131
T3 - International Series in Operations Research and Management Science
SP - 353
EP - 370
BT - International Series in Operations Research and Management Science
PB - Springer New York LLC
ER -