An efficient method for joint product line selection and pricing with fixed costs

Jungju Park; Jeonghoon Mo

doi:10.1007/s11590-018-1356-5

An efficient method for joint product line selection and pricing with fixed costs

Jungju Park, Jeonghoon Mo

Department of Industrial Engineering

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

In this paper, we propose an exact solution approach to solve a joint product line selection and pricing problem with a fixed cost factor. We adopt the multinomial logit model to estimate the sales of each marketed product, and suppose that the introduction of each product to the market incurs some constant fixed costs. Utilizing an implicit function form of the optimal price, we transform the original problem into the one with the decision variables for the product introduction only. The efficiency of the proposed transformation approach is demonstrated through simulations. We further discuss its applicability to generalized problems.

Original language	English
Pages (from-to)	367-378
Number of pages	12
Journal	Optimization Letters
Volume	13
Issue number	2
DOIs	https://doi.org/10.1007/s11590-018-1356-5
Publication status	Published - 2019 Mar 8

Bibliographical note

Funding Information:
This work was supported by the National Research Foundation of Korea (NRF) grant funded by the Korean Government (MSIP) (No. NRF-2015R1A2A2A04007359).

Funding Information:
Acknowledgements This work was supported by the National Research Foundation of Korea (NRF) grant funded by the Korean Government (MSIP) (No. NRF-2015R1A2A2A04007359).

Publisher Copyright:
© 2018, Springer-Verlag GmbH Germany, part of Springer Nature.

All Science Journal Classification (ASJC) codes

Control and Optimization

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10.1007/s11590-018-1356-5

Cite this

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An efficient method for joint product line selection and pricing with fixed costs

Abstract

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