Research Dynamic Pricing Of Products Sold On Account In Their Declining Period Of Life

Technology updating and diversified demand from consumers shortened the product lifecycles. It also means that the recession of the product appears in advance. When the productin the recession, a large of new products listed and acquired limited market share. Ifenterprises can take reasonable way of sales in the effective time to attract potential customers,expand the scale of sales, it can reduce the inventory risk, increase profits inevitably. Thecredit sale become the preferred strategy. But as a risky way of sales, how to determine therisk compensation, that is, to determine the price of credit sale. It can achieve efficientmanagement of credit risk by virtue of credit risk assessment and credit pricing objectively. Inaddition, it is the fact that the product in recession will be eliminated by the marketirreversibly. In order to stimulate demand and increase profits, most companies will choose topromotion sales model. Thus the decreasing point and reduction of price undoubtedly becomethe most concern.In this article, pricing decision converted the initial prices how to develop and how toadjust the later, and the revenue management theory be used in the study of dynamicdifferential pricing products in recession sold on credit. Firstly, it construct the differentialpricing model of credit sale, using Logistic regression analysis method to measure defaultprobability and default loss rate of recover, and adjust the transfer list which evaluated thecompany level by moody,then obtained credit grades transition probability. By measure andestimate the three parameters, it got the expression of the compensation rate. It make the riskon credit in the form of risk premium compensation rate added to the price, so thatenterprises can according to the customer’s credit rating to develop a different price,finished the determination of the initial price. Secondly, on the basis of analyzing the changetrend of the price recession product price, it used the theory of maximum concave envelope toscreen reasonable credit price out, and simplify the solving process demand rate in thenonhomogeneous poisson process (density). Based on Hamilton Jacobi equation, it enablecompanies make the best price adjusting strategy accordingly by solving the first-orderdifferential equation derived the optimal threshold price change time, Finally, it build profitevaluation model and verify the total profit of implementation of dynamic pricing will begreater than a single pricing through simulation examples.