Dynamic Pricing For Perishable Product Based On Customers' Purchase Behavior

The core of revenue management is that a company sells the suitable product to the right customer at the appropriate time and price to obtain the optimal revenue.Dynamic pricing is one of the main content in revenue management research,which plays a very important role in revenue management and related research fields.The perishable product widely exists in some service industries such as civil aviation,car rental,hotel,railway,media,tourism and other industries such as retail,manufacturing,gas and power industry.Because the inventory in these industries cannot be timely replenished within a limited time and the value of the product will drop to zero beyond a certain time epoch,dynamic pricing strategy is generally applicable to these industries.In the dynamic pricing research of perishable product,customer behavior is the important cause making the pricing problem complex.As the development of economy and the popularity of information technology continue,customer's purchase behavior appears diversification.Traditional revenue management research assumes that a customer is myopic,that is,a customer chooses the product as soon as the product price is below his/her valuation.But the behavioral intention behind customer's purchase decision-making is seldom studied.Due to the customer's reaction for the price does not always depend on the price and product,a lot of seemingly unrelated factors may also affect customer's purchase behavior.Therefore,ignoring the study of customer's purchase behavior will influence the effect of dynamic pricing strategy,and makes it difficult to achieve the target that maximizes expected revenue for dynamic pricing strategy.It is urgently needed to study dynamic pricing involving customer's behavior,which is also a research focus.Starting from the customer's behavior,this paper researches the dynamic pricing problems in revenue management deeply.The research content is the extension of traditional dynamic pricing theory and dynamic pricing model.It mainly includes the following contents:1.For the dynamic pricing problem of multiple grade perishable products,customers can be divided into two categories: the first kind of customers only buy the product with a fixed grade,the second kind of customers choose among products with different grades at a certain probability value.On this basis,we establish a dynamic pricing model of multiple grade perishable products based on customer's choice behavior by employing dynamic programming method,and obtain the properties of revenue function and optimal price strategy.Finally,a numerical example verifies the effectiveness of the optimal price strategy.The results show that the greater the arrival rate of the first kind of customers is,the higher the optimal price of each product is;the greater the arrival rate of the second kind of customers is,the lower the optimal price of each product is.The optimal price of each product is nonincreasing as the inventory levels of all products increase,and the optimal price of each product is nondecreasing as the remaining time increases.The optimal price of the product with higher quality grade is greater than that of lower quality product.2.Taking the same type of perishable products sold by competitive companies as the study subject,we research the dynamic pricing problem for risk-averse competitive companies based on customer's choice behavior.With the assumption that the competitive companies have complete information,we establish dynamic pricing models for risk-averse competitive companies in the cases of the additive utility and atemporal utility by using Markov decision process theory and game theory.Then we prove the existence of the equilibrium prices.Furthermore,we discuss dynamic pricing problem for risk-averse competitive companies under the incomplete information case.Numerical experiment shows that the equilibrium price of each company's product decreases with its own inventory level and risk aversion coefficient if every competitive company is risk-averse,and the equilibrium price of each company's product increases with the inventory levels and risk aversion coefficients of other competitive companies.3.Customer inertia is a far-reaching concept,which is referred to the intrinsic tendency to restrain customers from making any purchase.From the perspective of a risk-neutral company,we study dynamic pricing problems of a single perishable product when inertial customer's arrival follows homogeneous Poisson process and nonhomogeneous Poisson process,respectively.By employing dynamic programming method,we establish dynamic pricing models of a single perishable product in the above two cases and present the properties of the optimal price strategy.The results show that the optimal price is increasing with the remaining time,and is decreasing with the inventory levels.Furthermore,customer inertia depth and breadth have negative effects on the optimal price.4.Considering a risk-averse company,we study the dynamic pricing problem of a single perishable product in the presence of customer inertia.By using dynamic programming method and Markov decision process theory,we establish dynamic pricing models of a single perishable product based on customer inertia in the cases of the additive utility and atemporal utility.Then we discuss the properties of the optimal price strategy.Results show that the optimal price is increasing with the remaining time,and is decreasing with the inventory level,company's risk aversion coefficient,customer inertia depth and breadth in the cases of the additive utility and atemporal utility.5.Based on the dynamic pricing research of a single perishable product,we continue to research the dynamic pricing problem of substitutable products sold by a risk-neutral company in the presence of customer inertia.By using dynamic programming method,we establish a dynamic pricing model of substitutable products based on customer inertia.Moreover,we study how the customer inertia affects the optimal price of each product.Numerical experiments show that the customer inertia has a negative effect on the optimal price of each product,namely,the optimal price of each product decreases with the depth and breadth of customer inertia.