Title: A two-period pricing model for perishable items

Authors: Xing Wang; Bofeng Yu; Shuzhi Zhao

Addresses: School of Management, Jilin University, Changchun 130022, China; School of Transportation, Jilin University, Changchun 130022, China ' School of Economics and Management, Tongji University, Shanghai 200092, China ' School of Transportation, Jilin University, Changchun 130022, China

Abstract: This paper presents a two-period pricing model for perishable items via an advance selling strategy deployed within electronic businesses. This model is proposed by classifying consumers based on their shopping habits: strategic consumers and conventional consumers. The model was developed both with and without a consumer order cancellation variable. Numerical computation and sensitivity analysis were conducted to test and justify the theoretical model. The results demonstrate that the ratio of potential consumers in an advance selling period to that in regular selling period is the main factor affecting pricing decisions. Consumers' perception of price fairness and order cancellation have effect on sellers' total revenue. The best revenue and price is obtained by adjusting the length of the advance selling period.

Keywords: revenue maximisation; pricing model; perishable items; advance selling strategy; electronic commerce.

DOI: 10.1504/IJSTM.2018.090354

International Journal of Services Technology and Management, 2018 Vol.24 No.1/2/3, pp.30 - 42

Received: 17 Nov 2016
Accepted: 25 Apr 2017
Published online: 13 Mar 2018 *

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