Interactive bundle pricing strategy for online pharmacies
Online retail pharmacies usually price their products differently from traditional drugstores. Based on real-time consumer behaviors, this paper proposes a dynamic bundle pricing strategy to maximize the pharmacy’s profit. Given free shipping thresholds and consumer budgets, we propose a mixed-integ...
Saved in:
| Published in: | Transportation research. Part E, Logistics and transportation review Vol. 177; p. 103223 |
|---|---|
| Main Authors: | , , , |
| Format: | Journal Article |
| Language: | English |
| Published: |
Elsevier Ltd
01.09.2023
|
| Subjects: | |
| ISSN: | 1366-5545, 1878-5794 |
| Online Access: | Get full text |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | Online retail pharmacies usually price their products differently from traditional drugstores. Based on real-time consumer behaviors, this paper proposes a dynamic bundle pricing strategy to maximize the pharmacy’s profit. Given free shipping thresholds and consumer budgets, we propose a mixed-integer nonlinear programming model and a heuristic to sequentially price customized bundles. We further conduct a numerical study using the data from a leading e-pharmacy in China. Our computational results indicate that the proposed model not only improves the e-pharmacy’s profit by attracting more customers but noticeably contributes to consumer surplus. Through sensitivity analysis, our model is proved to be robust under various scenarios.
•We study a dynamic bundle pricing strategy to maximize the e-pharmacy’s profit.•We develop a mathematical model and a heuristic to price customized bundles.•We conduct a numerical study using the data from a leading e-pharmacy in China.•Our model improves the e-pharmacy’s profit and increases consumer surplus. |
|---|---|
| ISSN: | 1366-5545 1878-5794 |
| DOI: | 10.1016/j.tre.2023.103223 |