Dynamic pricing and the direct-to-customer model in the automotive industry

被引:63
作者
Biller S. [1 ]
Chan L.M.A. [2 ]
Simchi-Levi D. [3 ]
Swann J. [4 ]
机构
[1] General Motors, Research and Development Center, Warren, MI
[2] Grado Department of Industrial and Systems Engineering, Virginia Tech., Blacksburg, VA
[3] Department of Civil and Environmental Engineering, Engineering Systems Division, MIT, Cambridge, MA
[4] School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, GA
基金
加拿大自然科学与工程研究理事会; 美国国家科学基金会;
关键词
Supply Chain; Business Model; Greedy Algorithm; Production Capacity; Price Change;
D O I
10.1007/s10660-005-6161-4
中图分类号
学科分类号
摘要
The Internet is changing the automotive industry as the traditional manufacturer and dealer structure faces increased threats from third party e-tailers. Dynamic pricing together with the Direct-to-Customer business model can be used by manufacturers to respond to these challenges. Indeed, by coordinating production and inventory decisions with dynamic pricing, the automotive industry can increase profits and improve supply chain performance. To illustrate these benefits, we discuss a strategy that incorporates pricing, production scheduling, and inventory control under production capacity limits in a multi-period horizon. We show that under concave revenue curves, a greedy algorithm provides the optimal solution, and we describe extensions to the model such as multiple products sharing production capacity. Using computational analysis, we quantify the profit potential and sales variability due to dynamic pricing, and we suggest that it is possible to achieve significant benefit with few price changes. © 2005 Springer Science + Business Media, Inc.
引用
收藏
页码:309 / 334
页数:25
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