Pricing and allocation of retail space with one radio frequency identification enabled supplier and one non-RFID enabled supplier

Joseph G. Szmerekovsky, Vera Tilson and Jiang Zhang

International Journal of Revenue Management, 2009, vol. 3, issue 1, 37-55

Abstract: We consider a retailer with one radio frequency identification (RFID) enabled supplier and one non-RFID enabled supplier. Assuming vendor managed inventory, we address the problem of allocation and pricing of the retail shelf-space. Using a Stackelberg game where the retailer leads, we observe that the RFID technology provides a competitive advantage for the RFID enabled supplier. Further, high product substitutability, high demand uncertainty, low tag prices, and low restocking costs favour the RFID enabled supplier. As shelf-space is capacitated with large fixed costs and its demand varies over time, shelf-space management addresses many of the same challenges as revenue management.

Keywords: RFID; radio frequency identification; revenue management; shelf space pricing; shelf space allocation; technologically different suppliers; VMI; vendor managed inventory; retail space; shelf space management. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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