Abstract
This paper considers the online retailer's omni-channel retail operations under reference point effects in which consumers can cancel their orders before payment and return the products after payment if the products doesn't meet their expectation. The online retailer's optimal pricing and inventory decisions are derived under the omni-channel strategy by maximizing the total expected utility. The analysis reveals a threshold strategy on the retailer's optimal pricing and inventory decisions and the optimal total expected utility while considering the impact of reference point effects. Moreover, with the increase of the retailer's loss aversion or the optimism level, the order quantity and overall expected utility decrease, while the optimal price presents a threshold type. Finally, the comparison of the utility performance between with and without reference point effects is presented.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: International journal of information and management sciences
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.