Abstract
In this study, we investigate inventory allocation and pricing strategies for retailers by incorporating demand information into the issue of inventory allocation during the presale period. In a presale system, retailers offer presale goods at a price lower than the retail price. By offering products at a discount, retailers may attract additional demand. In addition, this system enables retailers to reduce the uncertainty of market demand and establish a strategy for inventory allocation based on the results of presales. A Bayesian approach was employed to analyze and update demand information, and inventory allocation was formulated as a newsvendor problem to determine the optimal policy that maximizes retailer profit. A numerical analysis was conducted to validate the effectiveness of the proposed strategy. Results suggest that the proposed strategies can support retailers by more accurately predicting demand and achieving higher profits with less inventory. Furthermore, retailers can experience greater benefits from risk-averse customers than from risk-neutral customers.
Highlights
Presale includes a regular price and a presale price discounted from a regular price and offers a different price to the customer based on the sales period [2]
Presale service is an effective strategy for aligning inventory with demand, and this service attracts customers from competing companies
An analysis of two different selling strategies determined that presale services were more profitable for retailers
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. E-commerce offers retailers the advantage of strategically utilizing the period of time before regular sales, which typically includes pre-order and presale. Large e-commerce companies in China, such as JD, Taobao, TianMao, and Gome, have launched presale services Such services allow customers to reserve products at a presale price before a regular sales date. While customers clearly benefit from the presale system, retailers can gain an advantage They can reduce demand uncertainty by obtaining market demand information in advance. Retailers can utilize presale volume information to optimize the inventory of presale items and reduce discrepancies between sales expectations and actual market demand.
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