Demand Learning Through Repetitive Sales Interactions
نویسندگان
چکیده
Knowing customers’ preferences enhances a firm’s ability to design and offer the right menu of products. Learning is not free, and companies must allocate valuable resources if they really want to know their customers better. In this paper, we investigate this trade-off between the value and cost of learning. We use an axiomatic approach to develop a learning model and investigate how pricing policies can be used to speed up the learning process while maximizing the firm’s financial performance.
منابع مشابه
An EMQ inventory model for defective products involving rework and sales team’s initiatives-dependent demand
This paper investigates the issue of an economic manufacturing quantity model for defective products involving imperfect production processes and rework. We consider that the demand is sensitive to promotional efforts/sales teams’ initiatives as well as the setup cost can be reduced through further investment. It also assumes that fixed quantity multiple installments of the finished batch are d...
متن کاملSocial Learning and Peer Effects in Consumption: Evidence from Movie Sales
Using box-office data for all movies released between 1982 and 2000, I quantify how much the consumption decisions of individuals depend on information they receive from their peers, when quality is ex ante uncertain. In the presence of social learning, we should see different box-office sales dynamics depending on whether opening weekend demand is higher or lower than expected. I use a unique ...
متن کاملStyle goods pricing with demand learning
For many industries (e.g., apparel retailing) managing demand through price adjustments is often the only tool left to companies once the replenishment decisions are made. A significant amount of demand uncertainty can be resolved using the early sales information. In this study, a Bayesian approach is used to summarize sales information and pricing history in an efficient way which then feeds ...
متن کاملClosing the Gap: A Learning Algorithm for the Lost-Sales Inventory System with Lead Times
Introduction The periodic-review inventory control problem with lost-sales and positive lead times is one of the most fundamental yet notoriously difficult problems in the theory of inventory management (see Zipkin (2000)). The model assumes that unmet demand at the end of each period is lost, rather than being backlogged and carried over to the next period. For example, in many retail applicat...
متن کاملNber Working Paper Series Social Learning and Peer Effects in Consumption: Evidence from Movie Sales
Using box-office data for all movies released between 1982 and 2000, I test the implications of a simple model of social learning in which the consumption decisions of individuals depend on information they receive from their peers. The model predicts different box office sales dynamics depending on whether opening weekend demand is higher or lower than expected. I use a unique feature of the m...
متن کامل