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  • Past Event.
Apr 5

Dr. Nicholas Petruzzi, Penn State

This event is part of the Decision Sciences Seminar Series series.

Delivery Method: In Person
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Location:

Gerri C. LeBow Hall
722
3220 Market Street
Philadelphia, PA 19104

Registration Option:

General

Registration for this event has passed.

Professor Petruzzi’s research explores the economic implications of uncertainty within the primary focus areas of operations and supply chain management, pricing, and stochastic inventory theory. His work appears in various academic field journals including Operations Research, Management Science, Manufacturing & Service Operations Management, Production and Operations Management, Naval Research Logistics, IIE Transactions, Decision Sciences, European Journal of Operations Research, and International Journal of Production Economics.

Abstract: We study optimal retail pricing for a stylized distribution channel in which a single product is sold to a market characterized by bargain-hunting consumers, where bargain hunting is a notion that refers to the propensity of some consumers to extract psychological benefit from the purchase of a given item that is posted at a discounted price. In particular, we derive a price and discount dependent retail demand function from first principles by developing a consumer utility function that incorporates both economic and psychological utility effects associated with a posted selling price that is explicitly discounted from a posted list price. Within that context, we analytically explore the retailer’s trade-off between posting a selling price without an accompanied list price and posting a selling price that is coupled with, and explicitly discounted from, a higher list price, and we determine the retailer’s optimal one-point versus two-point pricing strategy accordingly. We then analyze the effects of wholesale pricing, manufacturer suggested retail pricing, and demand uncertainty on the optimal strategy and corresponding split of channel profits.

Audience

Faculty
PhD

Disciplines

Decision Sciences and MIS
Have Questions?

Oben Ceryan

(215) 895-2815

Gerri C. LeBow Hall 738