Summary
Summary of Chapter 15_Smart pricing_325239-M-6_Supply Chain Planning and Design
- Course
- Institution
- Book
Summary of lecture 15 & lecture
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Summary of Chapter 10_Coordinated product and supply chain design_325239-M-6_Supply Chain Planning and Design
-
Summary of Chapter 7_Network planning and distribution strategies_325239-M-6_Supply Chain Planning and Design
-
Summary of Chapter 16_Information technology and business process_325239-M-6
Seller
Follow
SmartStudyNotes
Content preview
Chapter 15: Smart pricing1. Introduction
Some examples:
− IBM is investigating software that will allow it to adjust prices according to demand
− Nikon Coolpix Digital Camera sold for about $600
• Manufacturer provides a rebate of $100 independently of where the camera is
purchased
− Boise Cascade Office Products sells many products on-line
• Prices for the 12,000 items ordered most frequently on-line might change as often
as daily
2. Price & demand
− Demand for a product will typically go up as the product’s price goes down
− Certain products more or less sensitive to price changes
− To find the best price, a manager needs to be able to characterize the relationship
between pricing and demand for each product
, 3. Markdowns
− Assumption in example: demand is deterministic based on price
− Realistically:
• Demand is random
• At the end of a selling season, there may be remaining inventory
− Firms frequently employ a markdown or sale to dispose excess inventory
− Reservation price: maximum price that a customer is willing to pay for the product.
− Each of these customers has a maximum price that he or she is willing to pay for the
product this is known as the reservation price.
• When the p=$1,200, D=400, 400 customers have a reservation price at or above
$1,200.
− The lower the price, the more customers with a reservation price at or above that price
− Low reservation price customers seen as:
• Less desirable or profitable,
• Useful to get rid of the excess inventory
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller SmartStudyNotes. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.63. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
78462 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now