Market Segmentation, Advanced Demand Information and Supply Chain Performance

Fangruo Chen

Working Papers from Columbia - Graduate School of Business

Abstract: A monopolist firm sells a single product to a market where the customers may be enticed to accept a delay in when their orders are shipped. The enticement is a discounted price for the product. The market consists of several segments with different degrees of aversion to delays. The firm offers a price schedule under which the customers each self-select the price they pay and when their orders are to be shipped. When a customer agrees to wait, the firm gains advanced demand information which can be used to reduce its supply chain costs. This article explores the costs and benefits of this pricing strategy.

Keywords: MONOPOLIES; PRICING; PRODUCTION (search for similar items in EconPapers)
JEL-codes: L10 L11 (search for similar items in EconPapers)
Pages: 29 pages
Date: 1999
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:colubu:99-2

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