Pricing Decisions with Product Return and Consumer Fit Uncertainty

Aditya Nugroho, Chung Chi Hsieh

研究成果: Conference contribution

摘要

When firms introduce new products to the market, consumers usually have product fit uncertainty towards these new products and may not fully understand their characteristics before purchasing them. It is thus prevalent that firms offer product returns in order to mitigate consumers' valuation risk. The objective of this study is to develop a two-period model with product return and investigate how consumers' fit uncertainty and product knowledge affect the firm's decisions and profit. The firm sells new products in the first period and refurbishes the returned products and sells them, along with the new products, in the second period. We find that when more consumers find product fit or when more consumers understand product characteristics, the quantity of returned products will be reduced, the selling prices of the products will be lowered, and the firm's profit will be increased. On the other hand, when consumers have higher product valuation in the second period, the quantity of returned products will be reduced, the first-period selling price of the product will be lowered and the firm's profit will be lowered.

原文English
主出版物標題2019 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2019
發行者IEEE Computer Society
頁面185-188
頁數4
ISBN(電子)9781728138046
DOIs
出版狀態Published - 2019 十二月
事件2019 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2019 - Macao, Macao
持續時間: 2019 十二月 152019 十二月 18

出版系列

名字IEEE International Conference on Industrial Engineering and Engineering Management
ISSN(列印)2157-3611
ISSN(電子)2157-362X

Conference

Conference2019 IEEE International Conference on Industrial Engineering and Engineering Management, IEEM 2019
國家/地區Macao
城市Macao
期間19-12-1519-12-18

All Science Journal Classification (ASJC) codes

  • 商業、管理和會計(雜項)
  • 工業與製造工程
  • 安全、風險、可靠性和品質

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