Optimal dynamic pricing for clearance sales on the spot market
Name
503460007-MIT.pdf
Description
Full printable version
Size
2.74 MB
Format
Adobe PDF
Checksum (MD5)
9ae6a44841551769cd962effa06e61f7
Author(s)
Ileri, Fırat
Advisor(s)
Stanley B. Gershwin.
Date Issued
2009
Publisher
Massachusetts Institute of Technology
Abstract
In this thesis, we develop an optimal dynamic pricing strategy for clearance sales of a textile manufacturing company which allows last-minute cancellations of orders without penalty. This company faces the difficult task of determining the optimal prices to clear the unsold products which result from last-minute order cancellations of its customers. The presented results in this thesis provide the company with a mathematical tool which can be used to optimally and dynamically set prices to maximize the profits in the clearance sales. We assume that buyers are myopic, demand multiple units of products and have independent demand. We also assume that the company has limited information on the valuation of buyers. Using these assumptions, an analytical model and estimations from the historical data are developed and dynamic programming is used to devise an optimal dynamic pricing strategy for the clearance sales of the company.
Description
Thesis (M. Eng.)--Massachusetts Institute of Technology, Dept. of Electrical Engineering and Computer Science, 2009.
Includes bibliographical references (p. 79).
Subjects
Electrical Engineering and Computer Science.
MIT Department
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science
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