Optimal Pricing-Inventory Decision Of Retailer With Considering The Length Of Advance Period

More than 700 million Internet users have attracted a large number of retailers to sell their products in online market.With the fiercer online channel competition,retailers have introduced a variety of promotions in order to reach the goal of attracting more consumers.As a new sales model,advance selling has become a major way to promote new products.Compared with the traditional single-phase sales,advance selling will be extended to two phases of sales.In recent years,advance selling has become the primary tools for selling new products.The length of advance period is the duration of the retailer’s advance selling activity.The length of advance period is a necessary consideration for the retailer to decide the advance selling strategy,which has a significant impact on the retailer’s optimal pricing and inventory decision-making.The impact of the length of advance period on consumer valuation and market demand can be divided into discrete and continuous effects.The former applies to pre-sale time-sensitive products with low sensitivity.Only when the length of advance period exceeds a certain threshold will change the market demand and consumer valuation.The latter for the pre-sale time-sensitive products,that is,with the length of advance period changes,market demand and consumer valuations will change at any time.In this paper,we study the optimal pricing and inventory decision-making of retailers with considering the length of advance period.Including the retailer’s advance selling strategy selection and inventory decision-making,as well as the retailer’s optimal pricing mechanism selection.The results show that when the probability of high consumers’ valuation is low,the retailer should adopt premium advance selling strategy.When consumers valuation has a high probability of being high,retailers should adopt discount advance selling strategy.The dual influence of the length of advance period determines the critical condition for the retailer advance selling strategy.By comparing the optimal total profits of retailers with price commitment mechanism and dynamic pricing mechanism under the two forms of influence,it is found that price commitment mechanism is always superior to dynaImic pricing mechanism.In addition,through the case study,we verify the validity of the model.