Static and Dynamic Pricing of Excess Capacity in a Make-to-Order Environment

• 成果类型: Article
• 署名作者: Hall, Joseph M.; Kopalle, Praveen K.; Pyke, David F.
• 署名单位: Dartmouth College; University of San Diego
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/j.1937-5956.2009.01044.x
• 发表日期: 2009
• 页码: 411-425
• 关键词: Pricing; revenue management; make-to-order; Queueing; dynamic control

摘要

We consider a make-to-order manufacturer that serves two customer classes: core customers who pay a fixed negotiated price, and fill-in'' customers who make submittal decisions based on the current price set by the firm. Using a Markovian queueing model, we determine how much the firm can gain by explicitly accounting for the status of its production facility in making pricing decisions. Specifically, we examine three pricing policies: (1) static, state-independent pricing, (2) constant pricing up to a cutoff state, and (3) general state-dependent pricing. We determine properties of each policy, and illustrate numerically the financial gains that the firm can achieve by following each policy as compared with simpler policies. Our main result is that constant pricing up to a cutoff state can dramatically outperform a state-independent policy, while at the same time achieving most of the increase in revenue achievable from general state-dependent pricing. Thus, we find that constant pricing up to a cutoff state presents an attractive tradeoff between ease of implementation and revenue gain. When the costs of policy design and implementation are taken into account, this simple heuristic may actually out-perform general state-dependent pricing in some settings.