Research On Dynamic Pricing For Non-instantaneous Deteriorating Items

With the development of economy globalization, market competition andsupply chain operations, pricing is particularly important in enterprise decision.Non-instantaneous deteriorating items exist widely in true life, and just deterio-rate after the fresh product time. Technological advances make dynamic pricingpossible, which enables decision maker to adapt strategies flexibly to seek higheryields than static pricing. Thus, applying dynamic pricing to non-instantaneousdeteriorating items has very important theoretical and practical significance.This paper takes a deep research on dynamic pricing for non-instantaneousdeteriorating items with price-dependent demand and price-and stock-dependentdemand respectively. In view of the feature that the items have a span of nodeterioration, the decrease of inventory level solely results from customer demandearly in the sales period, but due to both demand and deterioration afterwards.Dynamic pricing models are formulated with diferent demands to maximize theenterprise’s profits. The optimal dynamic pricing strategies are obtained by usingPontryagin’s maximum principle. Numerical examples are given to analyze theefect of main parameters on the optimal strategies and illustrate the efectivenessof the proposed method.