Pricing for Complementary and Substitute Products Simultaneously in the Package-Sale and Separate-Sale Considering Disruption Risk
Subject Areas :
1 - Assistant Professor of Industrial Engineering, Mazandaran University of Science and Technology
Keywords: Pricing, Complementary Product, Substitute Products, Package Sale, Disruption Risk,
Abstract :
In this paper, we present a model for pricing substitute and complementary products (four products) simultaneously, where the seller offers the products in two ways: separately and as a package to the final customer, and we compare the resulting profit. In the package sale, two complementary products are offered together in one package, and each of these packages can replace one another, but when sold separately, each item is sold individually. The demand function for each product is a linear function of its own price and the prices of other products. There is also the possibility of disruption risk for the order, in such a way that in the event of a disruption risk, only a certain percentage of the order can be fulfilled. To demonstrate the credibility of the model, a numerical example has been used and a sensitivity analysis has been performed on the important parameters of the model.
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