Browsing by Subject "Bundling (Marketing)"
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Item Open Access Bundle pricing of inventories with stochastic demand(Bilkent University, 2004) Bulut, ZümbülIn this study, we consider the single period pricing of two perishable products which are sold individually and as a bundle. Demands come from a Poisson Process with a price-dependent rate. Assuming that the customers’ reservation prices follow normal distributions, we determine the optimal product prices that maximize the expected revenue. The performances of three bundling strategies (mixed bundling, pure bundling and unbundling) under different conditions such as different reservation price distributions, different demand arrival rates and different starting inventory levels are compared. Our numerical analysis indicate that, when individual product prices are fixed to high values, the expected revenue is a decreasing function of the correlation coefficient, while for low product prices the expected revenue is an increasing function of the correlation coefficient. We observe that, bundling is least effective in case of limited supply. In addition, our numerical studies show that the mixed bundling strategy outperforms the other two, especially when the customer reservation prices are negatively correlated.Item Open Access Optimal bundle formation and pricing of two products with limited stock(Bilkent University, 2005) Öztop, SalihIn this study, we consider the stochastic modeling of a retail firm that sells two types of perishable products in a single period not only as independent items but also as a bundle. Our emphasis is on understanding the bundling practices on the inventory and pricing decisions of the firm. One of the issues we address is to decide on the number of bundles to be formed from the initial product inventory levels and the price of the bundle to maximize the expected profit. Product demands follow a Poisson Process with a price dependent rate. Customer reservation prices are assumed to have a joint distribution. We study the impact of reservation price distributions, initial inventory levels, product prices, demand arrival rates and cost of bundling. We observe that the expected profit decreases as the correlation coefficient increases. With negative correlation, bundling cost has a significant impact on the number of bundles formed. When the product prices are low, the retailer sells individual products as well as the bundle (mixed bundling), when they are high, the retailer sells only bundles (pure bundling). The expected profit and the number of bundles offered decrease as the variance of the reservation price distribution increases. For high starting inventory levels, the retailer reduces bundle price and offers more bundles. The number of bundle sales decreases and the number of individual product sales increases when the arrival rate increases since the need for bundling decreases. Impacts of substitutability and complementarity of products are also investigated. The retailer forms more bundles, or charges higher prices for the bundle or both as the products become more complementary and less substitutable.