A multi-objective mean–variance mathematical programming approach to combined phase-out and clearance pricing strategy for seasonal products: case study of a Jeans retailer

Mahmoud Dehghan Nayeri (mdnayeri@modares.ac.ir), Amir-Nader Haghbin (haghbinamirnader@modares.ac.ir), Abdolkarim Mohammadi-Balani (a_mohammadi@modares.ac.ir) and Karim Bayat
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Mahmoud Dehghan Nayeri: Tarbiat Modares University
Amir-Nader Haghbin: Tarbiat Modares University
Abdolkarim Mohammadi-Balani: Tarbiat Modares University
Karim Bayat: Tarbiat Modares University

Journal of Revenue and Pricing Management, 2020, vol. 19, issue 3, No 6, 210-217

Abstract: Abstract This paper presents a novel multi-objective mean–variance mathematical programming approach to the dynamic pricing problem for seasonal products. The basic pricing scheme is a combination of phase-out pricing that gradually lowers the price over time and clearance pricing in which the end-of-season inventory is sold altogether at a lower price to a wholesaler in order to make room for the next season’s products. The model is then applied to a real-world case of a Jeans retailer in three different risk attitudes. Results show that the retailer should follow an almost fixed non-dynamic pricing strategy in the risk-taking attitudes, and a more flexible dynamic pricing strategy in risk-averse attitudes.

Keywords: Dynamic pricing; Seasonal products; Multi-objective programming; Phase-out pricing; Clearance pricing (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1057/s41272-019-00219-0

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