Pricing and determining the optimal discount time of perishable goods with time and price dependent demand
Received: 1 June 2015
Accepted: 26 May 2016
In the eyes of consumers, the value of perishable goods generally declines during the good’s lifetime. In this situation a mechanism to encourage purchases, such as discounts or reduction in price policy can be effective. In this paper, we determine the discount time and the prices for a perishable product with a one period lifetime. Product demand is dependent on price and time. Demand function is different after discount time to an increase in costumer. After modeling, we show that the profit function is concave and optimal price and the discount time is unique. Due to the complexity of the model, using a heuristic algorithm, the near optimal price and the near optimal discount time are calculated.
Mathematics Subject Classification: 45G / 65K
Key words: Pricing / perishable product / price discount / demand function
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