The Pricing Strategy of Manufacturer for Complementary Product in the Online Selling system with Return Policy

Document Type : Research Paper

Authors

1 tehran university

2 university

Abstract

In online selling system, when customers decide to buy a product, considering that the product is not available and they cannot visit or touch, it is possible for them to cancel online purchasing. In this paper, the effect of pricing strategy for complementary products in online purchasing under the return policy is investigated. In this study, two demand functions are supposed and pricing strategy and return policy have been investigated. The scenario includes situation in which customer's demands are sensitive to the product selling and refund prices. The products’ return policy is sensitive to the refund amount of the product and the amount of another product return. In order to maximize the total profit, the optimal price and refund amount of products are derived. At the end a numerical example is explained to show the effect of sensitivity of decision variables with respect to parameters

Keywords

References

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Journal of Modeling in Engineering
Volume 15, Issue 50
June 2017
Pages 323-334

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History

  • Receive Date: 05 January 2016
  • Revise Date: 05 March 2016
  • Accept Date: 17 April 2016

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