Stochastic Dynamic Pricing Model To Analyze The Benefits And Clearance

The face of increasingly fierce market competition, more and more dynamicpricing theories widely used in many fields. In many industries, managers are facedwith the issue about the sales of seasonal merchandise with in a limited time, theycontinue to dynamically adjust pricing to maximize the gains. With the expansion ofthe scope of application of revenue management, revenue management with dynamicpricing strategy has not only for the sales of perishable goods with inventoryconstraints.This paper attempts to make revenue management an extension from inventoryconstraints to the application of perishable commodities that the number of sale has aminimum volume and the goods provide replenishment, and using stochastic dynamicprogramming method theory, it attempts to explore the revenue model and clearancemodel with uncertainty characterization, and analysis the problem of dynamic pricingand clearance with a minimum sale number of goods. It gives the optimaldecision-making conclusions to help decision-makers formulate a reasonable pricestrategy in an uncertain market environment.When meeting sales, raising revenue isthe purpose; When sales is not meeting, in order to achieve the sales target, clearancethe goods is the purpose. It has a supporting role for the decision makers to providebenefits administration and risk aversion when they face with rapidly changingmarket environment. The paper firstly studies the two-stage newsboy pricing modelwith stock constraint, and then extends to the pricing model and clearance model witha minimum sales constrained about individual consumer and multi-consumers in eachcycle when time is divided into multi-cycle. Using stochastic dynamic programmingmean, it gives the optimal pricing decisions, and analyzes the nature of optimaldecision, then draws relevant conclusions. Issues discussed in this article providesome significant advices in the practical application of dynamic pricing for retailers.