Advance selling with double marketing efforts in a newsvendor framework

Cheng, Yongsheng; Li, Hongyan; Thorstenson, Anders

doi:10.1016/j.cie.2018.03.006

Cited by 30 publications

(24 citation statements)

References 30 publications

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“…He showed that the customer population compositions may affect the optimal results. Advanced selling has been also explored in literature for the anticipated impact on profits (Cheng et al, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

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Newsvendor revisited: risk premiums of loss aversion

Alkhaledi

Alrawabdeh

Dalalah

2018

Production & Manufacturing Research

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The classical newsvendor model in economics and decision theory treats losses and gains equally likely. However, decision makers are usually loss-averse as probable losses have more impact on humans than probable gains. This study presents a new variant of the newsvendor problem of loss-averse decision makers. The optimal order quantity is found by maximizing the expected utility of bounded functions. The implications of loss aversion on the certainty equivalents and risk premiums were also analyzed. Two case studies of exponential utility and normal demand were considered. A new elegant form of the optimal order quantity is established. The results show that when exponential loss aversion exists, the newsvendor optimal quantity serves as a lower(upper) bound on the optimal quantities. Moreover, high loss aversion entails higher RP. Similar findings hold by increasing the overage/underage costs and the demand standard deviation. Possible future extensions are demonstrated at the end of the paper.

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Section: Literature Reviewmentioning

confidence: 99%

“…The optimal order quantity is a one that minimizes the two cost components. There are wide applications of the newsvendors in single-day sales, In China for instance, the revenue of the Single Day promotions have risen rapidly from ¥0.1 billion in 2009 to ¥168.2 billion in 2017 (Cheng, Hongyan, & Thorstenson, 2018).…”

Section: Introductionmentioning

confidence: 99%

Newsvendor revisited: risk premiums of loss aversion

Alkhaledi

Alrawabdeh

Dalalah

2018

Production & Manufacturing Research

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“…e term "presale" refers to the sales strategy behavior in which sellers begin to accept orders before the products officially enter the market [1]. Presales can improve the understanding of the product market potential of retailers, reduce inventory risks and costs caused by demand uncertainty [2], and attract consumers to buy in advance and increase consumption [3].…”

Section: Introductionmentioning

confidence: 99%

“…Presales ensure that consumers, especially brand-loyal fans and technology product enthusiasts, do not have to worry about new products going out of stock when they officially go on sale; they guarantee the timely availability of new products, providing these customers with psychological security and satisfaction [1]. At the same time, when presales include some promotion strategies, such as presale discounts, gifts, and free refunds and exchanges, consumers can obtain more utility from the new product presale strategy [3].…”

Section: Introductionmentioning

confidence: 99%

“…For enterprises, presales can be a natural extension of the normal selling season and help retailers expand the wider consumer base of goods sold during the peak season [3]. Additionally, enterprises can obtain some funds and market demand response through presales and update the inventory plan and capacity decisions of new products in a timely manner according to demand information [2] to reduce inventory risk [5] and better control operations [6].…”

Section: Introductionmentioning

confidence: 99%

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Pricing Strategy for New Products with Presales

Feng

Yang

et al. 2019

Mathematical Problems in Engineering

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An increasing number of firms and retailers use presale strategies to induce customers to purchase before new products enter the market to increase their market share. Presales have gradually become a hot issue in business and academic circles. Based on a skimming pricing strategy and a penetration pricing strategy, this paper uses the different choice behaviors of two types of consumers to investigate the pricing strategy of preselling new products. The results show that if the proportion of fashion consumers is relatively low and their willingness to buy in the spot channel is below the threshold, the retailer should focus on traditional consumers by using a skimming pricing strategy; otherwise, the retailer should switch to a penetration pricing strategy. Moreover, we find that to gain more profits, the retailer should introduce a presale channel using either a penetration pricing or skimming pricing strategy. The introduction of a presale channel may not only reduce inventory risk and cost and enhance the market share and profitability of the enterprise but also help consumers avoid the risk of shortage and enhance their sense of security.

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Online advance selling or not: Pricing strategy of new product entry in a supply chain

Zhang

Xue

2020

Manage Decis Econ

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Considering consumers' strategic behavior and loss averseness of the deposit, this paper establishes a two‐period Stackelberg game model in a supply chain system, in which a manufacturer cooperates with an e‐retailer to perform advance selling to consumers. The optimal pricing decisions are obtained, and the impacts of the e‐retailer's advance selling activities on the profits of both parties are discussed. Studies have shown that advance selling activities always benefit the manufacturer, but they can hurt the e‐retailer. Within some specific conditions, the advance selling model can achieve Pareto improvement to both parties and benefit the performance of the supply chain.

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Advance selling with double marketing efforts in a newsvendor framework

Cited by 30 publications

References 30 publications

Newsvendor revisited: risk premiums of loss aversion

Newsvendor revisited: risk premiums of loss aversion

Pricing Strategy for New Products with Presales

Online advance selling or not: Pricing strategy of new product entry in a supply chain

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