Based on revenue management, dynamic pricing model of deteriorating items is studied. Firstly, the feasibility of the application of revenue management in dynamic pricing of deteriorating items and the character of the time to deterioration is represented. To gain maximum expected revenue, dynamic pricing model of deteriorating items is proposed. Then optimal solution is drawn by dynamic programming recursions. Finally, items deterioration is influential to the optimal solution by a numerical example. Items deterioration will reduce expected revenue and inventory. The higher the deteriorating rate, the low the expected revenue and inventory. When the items are deteriorating, price may not decrease with the elapse of time.
Study on Dynamic Pricing Model of Deteriorating Items Based on Revenue Management
First International Conference on Transportation Engineering ; 2007 ; Southwest Jiaotong University, Chengdu, China
2007-07-09
Conference paper
Electronic Resource
English
Study on Dynamic Pricing Model of Deteriorating Items Based on Revenue Management
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