Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level
Fashion apparel, with short product lifecycles and highly volatile demand, requires careful attention during both the initial ordering periods before the selling season and during the selling season, with its decisions regarding price and replenishment. Using Pontryagin’s maximum principle method, t...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Wiley
2019-01-01
|
| Series: | Complexity |
| Online Access: | http://dx.doi.org/10.1155/2019/9253605 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832555863445864448 |
|---|---|
| author | Qi Chen Qi Xu Wenjie Wang |
| author_facet | Qi Chen Qi Xu Wenjie Wang |
| author_sort | Qi Chen |
| collection | DOAJ |
| description | Fashion apparel, with short product lifecycles and highly volatile demand, requires careful attention during both the initial ordering periods before the selling season and during the selling season, with its decisions regarding price and replenishment. Using Pontryagin’s maximum principle method, this study investigates the problem of the dynamic pricing strategy and replenishment cycle for fashion apparel by considering the effect of fashion level on demand. First, we provide a framework for fashion apparel by formulating a model that includes both price and demand at different fashion levels. We then provide an algorithm to derive the optimal dynamic pricing strategy and replenishment cycle. Numerical examples and sensitivity analyses of the main system parameters are provided to demonstrate the obtained results, which form the basis for managerial insights. It is shown that the apparel retailer has three types of optimal dynamic pricing strategies and that the optimal strategy is independent of the replenishment cycle. The apparel retailer is able to realize the profit advantage of a continuously variable price policy by adjusting the sales price periodically. |
| format | Article |
| id | doaj-art-6cf5db791bf544a8b842b12fc141bf3d |
| institution | Kabale University |
| issn | 1076-2787 1099-0526 |
| language | English |
| publishDate | 2019-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Complexity |
| spelling | doaj-art-6cf5db791bf544a8b842b12fc141bf3d2025-02-03T05:46:54ZengWileyComplexity1076-27871099-05262019-01-01201910.1155/2019/92536059253605Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion LevelQi Chen0Qi Xu1Wenjie Wang2Glorious Sun School of Business and Management, Donghua University, Shanghai, 200051, ChinaGlorious Sun School of Business and Management, Donghua University, Shanghai, 200051, ChinaGlorious Sun School of Business and Management, Donghua University, Shanghai, 200051, ChinaFashion apparel, with short product lifecycles and highly volatile demand, requires careful attention during both the initial ordering periods before the selling season and during the selling season, with its decisions regarding price and replenishment. Using Pontryagin’s maximum principle method, this study investigates the problem of the dynamic pricing strategy and replenishment cycle for fashion apparel by considering the effect of fashion level on demand. First, we provide a framework for fashion apparel by formulating a model that includes both price and demand at different fashion levels. We then provide an algorithm to derive the optimal dynamic pricing strategy and replenishment cycle. Numerical examples and sensitivity analyses of the main system parameters are provided to demonstrate the obtained results, which form the basis for managerial insights. It is shown that the apparel retailer has three types of optimal dynamic pricing strategies and that the optimal strategy is independent of the replenishment cycle. The apparel retailer is able to realize the profit advantage of a continuously variable price policy by adjusting the sales price periodically.http://dx.doi.org/10.1155/2019/9253605 |
| spellingShingle | Qi Chen Qi Xu Wenjie Wang Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level Complexity |
| title | Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level |
| title_full | Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level |
| title_fullStr | Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level |
| title_full_unstemmed | Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level |
| title_short | Optimal Policies for the Pricing and Replenishment of Fashion Apparel considering the Effect of Fashion Level |
| title_sort | optimal policies for the pricing and replenishment of fashion apparel considering the effect of fashion level |
| url | http://dx.doi.org/10.1155/2019/9253605 |
| work_keys_str_mv | AT qichen optimalpoliciesforthepricingandreplenishmentoffashionapparelconsideringtheeffectoffashionlevel AT qixu optimalpoliciesforthepricingandreplenishmentoffashionapparelconsideringtheeffectoffashionlevel AT wenjiewang optimalpoliciesforthepricingandreplenishmentoffashionapparelconsideringtheeffectoffashionlevel |