IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v75y2023ics0969698923001868.html
   My bibliography  Save this article

Is the system reliability profitable for retailing and consumer service of a dynamical system under cross-price elasticity of demand?

Author

Listed:
  • Sarkar, Biswajit
  • Seok, Hyesung
  • Jana, Tapas Kumar
  • Dey, Bikash Koli

Abstract

Retailing strategy is one of the most crucial factors for industries. A proper retailing strategy can help to enhance consumer service and increase the industry's profit. An improved approach to retailing is suggested in this research to deliver superior customer service while maximizing profits in a dynamic system. The study analyzes a retailing strategy for a demand with cross-price elasticity upon the retail price. A product's cross-price elasticity and the system reliability are critical factors in retailing. Understanding the cross-price elasticity of demand between products helps retailers to make pricing decisions that maximize profits by maintaining demand. Imperfect products are produced due to an imperfect production system. The imperfect ones must be adjusted with some costs to make them perfect for better retailing. The system failure rate is crucial for retailing under cross-price elasticity of demand patterns. Production system reliability, cross-price elasticity of demand, and consumer service are all essential factors that can impact a company's success in the market. The production rate is considered time- and system failure rate-dependent. Contradictory to the literature, a dynamical system is proposed for improved retail management, which is solved using the Euler-Lagrange theory. Finally, one can achieve the expected maximum profit for this retail system with optimum selling prices for different products by reducing the system failure rate. Some numerical illustrations with graphical representations are provided to validate the current study. Numerical examples show that applying cross-price elasticity of demand for more than two identical products provides 35% more profit for the retail industry than a single type of product.

Suggested Citation

  • Sarkar, Biswajit & Seok, Hyesung & Jana, Tapas Kumar & Dey, Bikash Koli, 2023. "Is the system reliability profitable for retailing and consumer service of a dynamical system under cross-price elasticity of demand?," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:joreco:v:75:y:2023:i:c:s0969698923001868
    DOI: 10.1016/j.jretconser.2023.103439
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698923001868
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2023.103439?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kar, Sumi & Basu, Kajla & Sarkar, Biswajit, 2023. "Advertisement policy for dual-channel within emissions-controlled flexible production system," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    2. Xiaobei Shen & Lina Bao & Yimin Yu, 2018. "Coordinating Inventory and Pricing Decisions with General Price‐Dependent Demands," Production and Operations Management, Production and Operations Management Society, vol. 27(7), pages 1355-1367, July.
    3. Brojeswar Pal & Shib Sankar Sana, 2022. "Game-theoretic analysis in an environment-friendly competitive closed-loop dual-channel supply chain with recycling," Operations Management Research, Springer, vol. 15(3), pages 627-646, December.
    4. Jena, Sarat Kumar & Meena, Purushottam, 2022. "Competitive sustainable processes and pricing decisions in omnichannel closed-up supply chains under different channel power structures," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    5. Biswajit Sarkar & Kripasindhu Chaudhuri & Shib Sankar Sana, 2010. "A stock-dependent inventory model in an imperfect production process," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 3(4), pages 361-378.
    6. Jena, Sarat Kumar & Meena, Purushottam, 2022. "Shopping in the omnichannel supply chain under price competition and product return," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    7. Doucé, Lieve & Willems, Kim & Chaudhuri, Arjun, 2022. "Bargain effectiveness in differentiated store environments: The role of store affect, processing fluency, and store familiarity," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    8. Ballco, Petjon & Gracia, Azucena, 2020. "Do market prices correspond with consumer demands? Combining market valuation and consumer utility for extra virgin olive oil quality attributes in a traditional producing country," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    9. Lin, Chen & Bowman, Douglas, 2022. "The impact of introducing a customer loyalty program on category sales and profitability," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    10. Chen, Cheng-Kang & Lo, Chih-Chung & Weng, Tzu-Chun, 2017. "Optimal production run length and warranty period for an imperfect production system under selling price dependent on warranty period," European Journal of Operational Research, Elsevier, vol. 259(2), pages 401-412.
    11. Marchi, B. & Zanoni, S. & Zavanella, L.E. & Jaber, M.Y., 2019. "Supply chain models with greenhouse gases emissions, energy usage, imperfect process under different coordination decisions," International Journal of Production Economics, Elsevier, vol. 211(C), pages 145-153.
    12. Dormady, Noah C. & Rose, Adam & Roa-Henriquez, Alfredo & Morin, C. Blain, 2022. "The cost-effectiveness of economic resilience," International Journal of Production Economics, Elsevier, vol. 244(C).
    13. Pantano, Eleonora & Viassone, Milena & Boardman, Rosy & Dennis, Charles, 2022. "Inclusive or exclusive? Investigating how retail technology can reduce old consumers’ barriers to shopping," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    14. Ilkyeong Moon & Won Young Yun & Biswajit Sarkar, 2022. "Effects of variable setup cost, reliability, and production costs under controlled carbon emissions in a reliable production system," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 16(4), pages 371-397.
    15. Andruszkiewicz, Jerzy & Lorenc, Józef & Weychan, Agnieszka, 2020. "Seasonal variability of price elasticity of demand of households using zonal tariffs and its impact on hourly load of the power system," Energy, Elsevier, vol. 196(C).
    16. Bartholomew, Darrell E. & Williamson, Mark, 2022. "Retail media networks," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    17. Raj Kumar Bachar & Shaktipada Bhuniya & Santanu Kumar Ghosh & Biswajit Sarkar, 2022. "Controllable Energy Consumption in a Sustainable Smart Manufacturing Model Considering Superior Service, Flexible Demand, and Partial Outsourcing," Mathematics, MDPI, vol. 10(23), pages 1-29, November.
    18. Dehghan-Bonari, Mohamad & Heydari, Jafar, 2022. "How a novel option contract helps a green product to enter a traditional product's retailing channel: A mathematical modeling approach," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    19. Ghobadi, Somayeh Najafi- & Bagherinejad, Jafar & Taleizadeh, Ata Allah, 2021. "A two-generation new product model by considering forward-looking customers: Dynamic pricing and advertising optimization," Journal of Retailing and Consumer Services, Elsevier, vol. 63(C).
    20. Luis A. San-José & Joaquín Sicilia & Manuel González-De-la-Rosa & Jaime Febles-Acosta, 2020. "Best pricing and optimal policy for an inventory system under time-and-price-dependent demand and backordering," Annals of Operations Research, Springer, vol. 286(1), pages 351-369, March.
    21. Chen, Shiuann-Shuoh & Choubey, Bhaskar & Singh, Vinay, 2021. "A neural network based price sensitive recommender model to predict customer choices based on price effect," Journal of Retailing and Consumer Services, Elsevier, vol. 61(C).
    22. Fatemeh Akhyani & Alireza Komeili Birjandi & Reza Sheikh & Shib Sankar Sana, 2022. "New approach based on proximity/remoteness measurement for customer classification," Electronic Commerce Research, Springer, vol. 22(2), pages 267-298, June.
    23. Liddle, Brantley & Smyth, Russell & Zhang, Xibin, 2020. "Time-varying income and price elasticities for energy demand: Evidence from a middle-income panel," Energy Economics, Elsevier, vol. 86(C).
    24. Xu, Senyu & Tang, Huajun & Lin, Zhijun & Lu, Jing, 2022. "Pricing and sales-effort analysis of dual-channel supply chain with channel preference, cross-channel return and free riding behavior based on revenue-sharing contract," International Journal of Production Economics, Elsevier, vol. 249(C).
    25. Khorshidvand, Behrooz & Soleimani, Hamed & Sibdari, Soheil & Seyyed Esfahani, Mir Mehdi, 2021. "Revenue management in a multi-level multi-channel supply chain considering pricing, greening, and advertising decisions," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    26. Dai, Anshu & Wang, Xin & Li, Yu & Li, Ting & He, Shuguang, 2023. "Design of a performance-based warranty policy with replacement–repair strategy and cumulative cost threshold," International Journal of Production Economics, Elsevier, vol. 255(C).
    27. Kim, Gwang & Moon, Ilkyeong, 2021. "Integrated planning for product selection, shelf-space allocation, and replenishment decision with elasticity and positioning effects," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    28. Sana, Shib Sankar, 2020. "Price competition between green and non green products under corporate social responsible firm," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Young, Aiden & Sima, Herbert & Luo, Na & Wu, Sihong & Gong, Yu & Qian, Xiaoyan, 2024. "Ugly produce and food waste management: An analysis based on a social cognitive perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    2. Taheri, Babak & Yousaf, Anish & Gannon, Martin & Mishra, Abhishek, 2024. "e-commerce website customer engagement: Delineating the role of UTAUT, vividness, and compulsion," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    3. Muñoz-Villamizar, Andrés & Piatti, Matias & Mejía-Argueta, Christopher & Pirabe, Luis Felipe & Namdar, Jafar & Gomez, Juan Felipe, 2024. "Navigating retail inflation in Brazil: A machine learning and web scraping approach to the basic food basket," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    4. Chauhan, Ruchi & Majumder, Arunava & Kumar, Varun, 2023. "The impact of adopting customization policy and sustainability for improving consumer service in a dual-channel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Davoudi, Zahra & Seifbarghy, Mehdi & Sarkar, Mitali & Sarkar, Biswajit, 2023. "Effect of bargaining on pricing and retailing under a green supply chain management," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    2. Sarkar, Biswajit & Kar, Sumi & Basu, Kajla & Seo, Yong Won, 2023. "Is the online-offline buy-online-pickup-in-store retail strategy best among other product delivery strategies under variable lead time?," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    3. Chauhan, Ruchi & Majumder, Arunava & Kumar, Varun, 2023. "The impact of adopting customization policy and sustainability for improving consumer service in a dual-channel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    4. Sohani, Sahar & Barman, Tuli & Sarkar, Biswajit & Gunasekaran, Angappa & Pareek, Sarla, 2024. "Retail management policy through firefly algorithm under uncertainty using Dempster-Shafer theory for production firm," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    5. Sarkar, Biswajit & Dey, Bikash Koli, 2023. "Is online-to-offline customer care support essential for consumer service?," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    6. Dey, Bikash Koli & Seok, Hyesung, 2024. "Synergic effect of carbon regulation policies and multi-period credit financing in global retailing with reworking," Journal of Retailing and Consumer Services, Elsevier, vol. 79(C).
    7. Sarkar, Mitali & Dey, Bikash Koli & Ganguly, Baishakhi & Saxena, Neha & Yadav, Dharmendra & Sarkar, Biswajit, 2023. "The impact of information sharing and bullwhip effects on improving consumer services in dual-channel retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    8. Taleizadeh, Ata Allah & Moshtagh, Mohammad Sadegh & Vahedi-Nouri, Behdin & Sarkar, Biswajit, 2023. "New products or remanufactured products: Which is consumer-friendly under a closed-loop multi-level supply chain?," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    9. Hota, Soumya Kanti & Sarkar, Biswajit & Ghosh, Santanu Kumar & Cheikhrouhou, Naoufel & Treviño-Garza, Gerardo, 2024. "What should be the best retail strategy to deal with an unequal shipment from an unreliable manufacturer?," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    10. Dey, Bikash Koli & Sarkar, Mitali & Chaudhuri, Kripasindhu & Sarkar, Biswajit, 2023. "Do you think that the home delivery is good for retailing?," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    11. Mishra, Mowmita & Ghosh, Santanu Kumar & Sarkar, Biswajit & Sarkar, Mitali & Hota, Soumya Kanti, 2024. "Risk management for barter exchange policy under retail industry," Journal of Retailing and Consumer Services, Elsevier, vol. 77(C).
    12. Jena, Sarat Kumar & Meena, Purushottam, 2022. "Competitive sustainable processes and pricing decisions in omnichannel closed-up supply chains under different channel power structures," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    13. Saha, Subrata & Sarkar, Biswajit & Sarkar, Mitali, 2023. "Application of improved meta-heuristic algorithms for green preservation technology management to optimize dynamical investments and replenishment strategies," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 209(C), pages 426-450.
    14. Kar, Sumi & Basu, Kajla & Sarkar, Biswajit, 2023. "Advertisement policy for dual-channel within emissions-controlled flexible production system," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    15. Vandana & Shiv Raj Singh & Mitali Sarkar & Biswajit Sarkar, 2023. "Effect of Learning and Forgetting on Inventory Model under Carbon Emission and Agile Manufacturing," Mathematics, MDPI, vol. 11(2), pages 1-20, January.
    16. Bimal Kumar Sett & Bikash Koli Dey & Biswajit Sarkar, 2020. "Autonomated Inspection Policy for Smart Factory—An Improved Approach," Mathematics, MDPI, vol. 8(10), pages 1-19, October.
    17. Dehghan-Bonari, Mohamad & Heydari, Jafar, 2022. "How a novel option contract helps a green product to enter a traditional product's retailing channel: A mathematical modeling approach," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    18. He, Peng & He, Yong & Zhou, Li, 2023. "Channel strategies for dual-channel firms to counter strategic consumers," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    19. Rekha Guchhait & Biswajit Sarkar, 2023. "Increasing Growth of Renewable Energy: A State of Art," Energies, MDPI, vol. 16(6), pages 1-29, March.
    20. Wakhid Ahmad Jauhari & I Nyoman Pujawan & Mokh Suef, 2023. "Sustainable inventory management with hybrid production system and investment to reduce defects," Annals of Operations Research, Springer, vol. 324(1), pages 543-572, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:75:y:2023:i:c:s0969698923001868. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.