Optimal Product Line Pricing for Two Customer Segments with an Extension to Multi-Segment Case

Udatta S. Palekar, Govind Daruka, Manmeet Singh

Abstract

In this paper we consider the problem of determining optimal prices for a product line. Items are distinguished by a single attribute which we call quality and which is proportional to the cost of the item. Demand for an item is dependent on the price differential between the item and the next item with higher cost. Customers can be grouped into two segments based on the lowest features acceptable and the maximum acceptable price. We develop an algorithm to determine the optimal pricing to maximize profit. We also consider assortment decisions to add or drop items based on regularity conditions and optimality considerations.

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Paper Citation


in Harvard Style

S. Palekar U., Daruka G. and Singh M. (2014). Optimal Product Line Pricing for Two Customer Segments with an Extension to Multi-Segment Case . In Proceedings of the 3rd International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES, ISBN 978-989-758-017-8, pages 311-316. DOI: 10.5220/0004924303110316


in Bibtex Style

@conference{icores14,
author={Udatta S. Palekar and Govind Daruka and Manmeet Singh},
title={Optimal Product Line Pricing for Two Customer Segments with an Extension to Multi-Segment Case},
booktitle={Proceedings of the 3rd International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,},
year={2014},
pages={311-316},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0004924303110316},
isbn={978-989-758-017-8},
}


in EndNote Style

TY - CONF
JO - Proceedings of the 3rd International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES,
TI - Optimal Product Line Pricing for Two Customer Segments with an Extension to Multi-Segment Case
SN - 978-989-758-017-8
AU - S. Palekar U.
AU - Daruka G.
AU - Singh M.
PY - 2014
SP - 311
EP - 316
DO - 10.5220/0004924303110316