Determine the Optimal Vendor Profit for Complementary and Substitutable Products by Pricing, Discount and Bundle Pricing Policy

Document Type : Research Paper

Authors

1 University of Kurdistan

2 Tarbiat Modares University

Abstract

In recent years, the important concept of pricing policy including the complementary and replacement of goods in the supply chain has been considered by many authors. In this paper, the effectiveness of complementary and substitute products on seller benefits are investigated. Moreover, Complementary and substitute the product sales simultaneously was modeled with a seller for the first time. Since the product prices have an effect on each other, therefore, The sales in the three states, retail, package sales with no rebate and discount were examined. According to the above-mentioned, the seller's profit in the three scenarios, choice between retail and package selling, selecting between retail and package selling with discount and package selling with discount were evaluated. Pricing and package sales with no rebate and discount policy are tools that seller use to maximize profits. Propositions and algorithms for solving the model were proposed. Offering global optimal solutions to the problem of different modes are the strengths of this study. Finally, a numerical example was used to show the models effect. Numerical example shows that package sales with discount have more profits rather than other states.

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Journal of Industrial Engineering Research in Production Systems
Volume 2, Issue 4 - Serial Number 4
Fall & winter 2015
March 2015
Pages 99-113

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