Abstract Online retail pharmacies usually price their products differently from traditional drugstores. Based on real-time consumer behaviors, this paper proposes a dynamic bundle pricing strategy to maximize the pharmacy’s profit. Given free shipping thresholds and consumer budgets, we propose a mixed-integer nonlinear programming model and a heuristic to sequentially price customized bundles. We further conduct a numerical study using the data from a leading e-pharmacy in China. Our computational results indicate that the proposed model not only improves the e-pharmacy’s profit by attracting more customers but noticeably contributes to consumer surplus. Through sensitivity analysis, our model is proved to be robust under various scenarios.

    Highlights We study a dynamic bundle pricing strategy to maximize the e-pharmacy’s profit. We develop a mathematical model and a heuristic to price customized bundles. We conduct a numerical study using the data from a leading e-pharmacy in China. Our model improves the e-pharmacy’s profit and increases consumer surplus.


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    Title :

    Interactive bundle pricing strategy for online pharmacies


    Contributors:
    Li, Jianbin (author) / Liu, Lang (author) / Luo, Xiaomeng (author) / Zhu, Stuart X. (author)


    Publication date :

    2023-07-09




    Type of media :

    Article (Journal)


    Type of material :

    Electronic Resource


    Language :

    English




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