Risk-Averse Optimization of Coordinated Dynamic Pricing and Working Capital Management in Omnichannel Retailing: A Conditional Value-at-Risk Approach

Milad BabaieFard, Mehdi Aghabeigi and Mohammadreza Feylizadeh

Journal of Applied Mathematics, 2026, vol. 2026, 1-26

Abstract: The rise of omnichannel retailing lets customers engage retailers through multiple routes, including physical stores, online ordering, and hybrid fulfillment. Although this shift creates opportunities to grow sales and improve customer experience, it sharply increases the complexity of pricing, inventory, and financing decisions. When firms treat these domains in isolation, the result is often operational misalignment, higher costs, liquidity shortages, and lower profitability. This study develops an integrated model that jointly optimizes pricing, inventory, and financing decisions in an omnichannel retail system operating under uncertainty and risk. We formulate a multiperiod mathematical programming model spanning three principal sales channels that simultaneously determines selling prices, order quantities, inventory levels, sales volumes, and cash flows. A scenario-based representation captures demand and environmental uncertainty, and the conditional value-at-risk (CVaR) criterion is embedded in the objective, so the model maximizes expected profit while explicitly controlling losses under adverse scenarios. Because it combines continuous and binary variables with nonlinear relationships, the model is solved using a particle swarm optimization (PSO) metaheuristic. Numerical results show a sound balance between profitability and risk control, with dynamic channel-level pricing, economic batch ordering, efficient inventory allocation, and a sustained positive cash position as principal outcomes. Scenario analysis indicates stable performance under demand uncertainty and market volatility. Sensitivity analysis reveals that the risk-aversion coefficient, initial capital, demand rate, interest rate, and cost strongly influence performance. These findings show that omnichannel success depends not only on higher sales but also on coordinating marketing, operations, and finance, aiding risk-aware managerial decisions.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnljam:7297922

DOI: 10.1155/jama/7297922

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