Eliminating the Inconvenience of Carrying: Optimal Pricing of Delivery Service for Retailers

Xiaolong Guo (), Ben Li (), Yan Liu () and Liang Liang ()
Additional contact information
Xiaolong Guo: School of Management, University of Science and Technology of China, Hefei 230026, China
Ben Li: School of Management, University of Science and Technology of China, Hefei 230026, China
Yan Liu: School of Management, University of Science and Technology of China, Hefei 230026, China
Liang Liang: School of Management, Hefei University of Technology, Hefei 230009, China

Service Science, 2017, vol. 9, issue 3, 181-191

Abstract: Delivery service becomes one of the most important issues that significantly influence customer purchase behavior, especially for retailers in tourist attractions. This paper builds a model to investigate the strategy optimization of delivery service for such retailers. Meanwhile, the retailer optimizes the retail price to maximize the expected profit in different types of delivery service scenarios. Our results indicate that, given the perceived value of a delivery service, the optimal strategy is to provide free delivery service when its cost is relatively low, but to not provide delivery service when the cost is relatively high.

Keywords: delivery service; tourism retailing; pricing; decision analysis (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1287/serv.2017.0173 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:9:y:2017:i:3:p:181-191

Access Statistics for this article

More articles in Service Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().