Journal ArticleDOI
A joint dynamic pricing and advertising model of perishable products
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TLDR
By solving the dynamic optimization problem on the basis of Pontryagin’s maximum principle, the analytical solutions of the optimal joint dynamic pricing and advertising policy are obtained.Abstract:
Advertising and dynamic pricing play key roles in maximizing profit of a firm. In this paper a joint dynamic pricing and advertising problem for perishable products is investigated, where the time-varying demand rate is decreasing in sales price and increasing in goodwill. A dynamic optimization model is proposed to maximize total profit by setting a joint pricing and advertising policy under the constraint of a limited advertising capacity. By solving the dynamic optimization problem on the basis of Pontryagin’s maximum principle, the analytical solutions of the optimal joint dynamic pricing and advertising policy are obtained. Additionally, to highlight the advantage of the joint dynamic strategy, the case of the optimal advertising with static pricing policy is considered. Numerical examples are presented to illustrate the validness of the theoretical results, and some managerial implications for the pricing and advertising of the perishable products are provided.read more
Citations
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Journal ArticleDOI
Joint pricing and advertising strategy with reference price effect
TL;DR: In this article, a joint pricing and advertising problem for a monopolistic firm with consideration of reference price effect is investigated, where consumer demand rate is price-sensitivity and depends on the gap between the sales price and the reference price in consumers' mind.
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Mapping the Ethicality of Algorithmic Pricing: A Review of Dynamic and Personalized Pricing
TL;DR: In this paper, the authors provide an overview and discussion of the ethical challenges germane to algorithmic pricing, and perform a systematic interpretative review of 315 related articles on dynamic and personalized pricing as well as pricing algorithms.
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Dynamic vs. static pricing in a supply chain with advertising
TL;DR: The results show that if the manufacturer prices dynamically, the manufacturer itself will be better off; however, the double marginalization will be aggravated, which is adverse to supply chain efficiency.
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Modeling the impact of product quality on dynamic pricing and advertising policies
TL;DR: This article investigates the interplay between price, advertising, and quality in an optimal control model, and shows that quality develops monotonically in time and converges to a unique steady state.
Journal ArticleDOI
Inventory and marketing policy in a supply chain of a perishable product
TL;DR: In this article, the authors investigate a two-echelon supply chain comprising a manufacturer and a retailer, who are engaged in a Stackelberg game in which they set the terms of a wholesale price contract for a perishable product.
References
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Book ChapterDOI
Optimal advertising policy under dynamic conditions
Marc Nerlove,Kenneth J. Arrow +1 more
TL;DR: In this paper, the Dorfman-Steiner model is extended to the situation in which present advertising expenditures affect the future demand for the product, and the model is used to predict future demand.
Journal ArticleDOI
A survey of the maximum principles for optimal control problems with state constraints
TL;DR: The relations between the different sets of optimality conditions arising in Pontryagin's maximum principle are shown and the application of these maximum principle conditions is demonstrated by solving some illustrative examples.
Posted ContentDOI
The economic analysis of advertising
TL;DR: A comprehensive survey of the economic analysis of advertising can be found in this article, with a focus on positive and normative theories of monopoly advertising, price and non-price advertising, theories of advertising and product quality, and theories that explore the potential role for advertising in deterring entry.
Book ChapterDOI
Optimal Advertising and Optimal Quality
Robert Dorfman,Peter O. Steiner +1 more
TL;DR: In this article, the equilibrium conditions for a firm marking decision with respect to price, quality, and advertising expenditure were established. And they were generalized to optimal advertising and optimal quality with fixed prices.
Journal ArticleDOI
Survey of Literature on Continuously Deteriorating Inventory Models
TL;DR: A complete and up-to-date survey of published inventory literature for the deteriorating (decaying) inventory models and a classification scheme is presented along with suggestions for future research.