Publication:
Customers know best: pricing policies for products withheterogeneous quality

dc.contributor.coauthorAkcay, Yalçın
dc.contributor.departmentDepartment of Industrial Engineering
dc.contributor.kuauthorKaraesmen, Fikri
dc.contributor.schoolcollegeinstituteCollege of Engineering
dc.date.accessioned2024-11-09T23:20:54Z
dc.date.issued2021
dc.description.abstractThis article studies the pricing problem of a seller given an initial inventory of products with heterogeneous quality, facing uncertain customer arrivals over a finite selling season. We consider various regimes depending on whether the seller inspects the inventory to assess the quality levels of the products, and whether customers examine the inventory themselves and pick their specific item of choice among the available products. We formulate the problem under each regime as a stochastic optimization model which maximizes the seller's expected profits, capturing the salient problem features such as stochastic customer arrivals, customers' choice behavior, and uncertain product qualities. As obtaining closed-form solutions or structural properties for the optimal prices is quite difficult, we explore the full information solution to the problem as an upper bound, as well as solution approaches that approximate some key problem characteristics. Finally, we substantiate our results through an extensive numerical study, focusing on the performance of the proposed pricing policies and approximations.
dc.description.indexedbyWOS
dc.description.indexedbyScopus
dc.description.openaccessNO
dc.description.publisherscopeInternational
dc.description.sponsoredbyTubitakEuN/A
dc.identifier.doi10.1111/deci.12544
dc.identifier.eissn1540-5915
dc.identifier.issn0011-7315
dc.identifier.quartileQ2
dc.identifier.scopus2-s2.0-85113731279
dc.identifier.urihttps://doi.org/10.1111/deci.12544
dc.identifier.urihttps://hdl.handle.net/20.500.14288/10796
dc.identifier.wos687485400001
dc.keywordsDynamic pricing
dc.keywordsRevenue management
dc.keywordsRandom product quality demand
dc.keywordsModels
dc.language.isoeng
dc.publisherWiley
dc.relation.ispartofDecision Sciences
dc.subjectManagement
dc.titleCustomers know best: pricing policies for products withheterogeneous quality
dc.typeJournal Article
dspace.entity.typePublication
local.contributor.kuauthorKaraesmen, Fikri
local.publication.orgunit1College of Engineering
local.publication.orgunit2Department of Industrial Engineering
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