Journal article
Product price alignment with seller service rating and consumer satisfaction
Annals of operations research, Vol.320(2), pp.695-725
01/01/2023
DOI: 10.1007/s10479-021-04318-3
Abstract
Empirical studies have shown strong evidence that a seller with a better customer feedback score is able to charge a higher price for his/her product or service. We study the problem faced by the seller of setting the price with the objective of maximizing expected revenue over a finite number of periods. Modeling the problem requires building a system of processes that includes: (1) the customer arrival and formation of customer reservation price; (2) the customer feedback collection and aggregation into a Seller Service Rating (SSR); and (3) determining how much to charge customers. Because of the technical difficulty in finding analytical solutions that fully reflect the closed-loop interconnections between these processes, we develop a simulation–optimization approach to solve the problem. We present a computational study and report on results of numerical experiments providing interesting insights on how the retailer could startegically align the price he charges with his service quality performance.
Details
- Title: Subtitle
- Product price alignment with seller service rating and consumer satisfaction
- Creators
- Renato de Matta - University of IowaTimothy J. Lowe - University of Iowa
- Resource Type
- Journal article
- Publication Details
- Annals of operations research, Vol.320(2), pp.695-725
- Publisher
- Springer US
- DOI
- 10.1007/s10479-021-04318-3
- ISSN
- 0254-5330
- eISSN
- 1572-9338
- Language
- English
- Date published
- 01/01/2023
- Academic Unit
- Business Analytics
- Record Identifier
- 9984380509102771
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