Research On Dynamic Pricing Strategy For Seasonal Products Supply With Radio-Frequency Identification

With the rapid development of information technology and businesscompetition, the life cycle of product is shorter than ever, and the speed ofreplacement is also speed up. More and more products have the characteristic ofperishability. The seasonal goods always have quite short life cycle and the salvagevalue is quite small if it cannot be sold out in the life cycle. At the same time, theconsumer is sensitive to the value perception of seasonal goods, and the retails willhave to face more risks. Therefore, the management of seasonal products is verydifficult and complex.With the rise of Radio-Frequency Identification (RFID) technology being usedin supply chain management, it’s characteristics of on-time information update andautomatics give a great impact on supply chain management. In traditional supplychain management, due to products error placement and products wastage, the supplychain will suffer some damages to the profit. RFID can monitor the inventoryprecisely and improve the situation of products wastage. However, RFID is a big costfor the application and hard to decide whether to use or not. Furthermore, the impactsfor seasonal product’s supply chain and retail’s pricing strategy from RFID have todetect.This study based on the formers’ shoulders, adopting quantitative model andexperiments design, using newsvendor’s model, optimization method, dynamicprogramming and supply chain contract theory etc. to explore the problem.Firstly, the paper introduces current application of RFID technology in seasonalproducts supply chain management. Elaborate the RFID technology and the principle of RFID technology implementation, and expound the application of RFIDtechnology in seasonal supply chain in order to fully understand RFID system.Secondly, based on the classic newsvendor’s theory and optimization method,considering the seasonal products supply chain with RFID and without RFID, andbuild centralized and decentralized decision model for RFID, research centralizedand decentralized modes of RFID technology investment decision and analysis theimpact on supply chain of the unit cost of RFID technology and improvement rate ofproducts wastage. On this basis, numerical examples are carried out to relevantdiscuss.Thirdly, under stochastic demand, based on RFID technology, build seasonalproducts’ pricing and purchasing model to research the optimal price path andoptimal initial order quantity. Through numerical examples discuss the impact onprice, order quantity and revenue from the factors, such as retail’s unit cost of RFID,product’s value decrease rate, consumer’s keep price etc. On this basis, numericalexamples are carried out to relevant discuss.Finally, it concluded and evaluated the research, and proposed further research.