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A simulation-based approach to price optimisation of the mixed bundling problem with capacity constraints

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  • Mayer, Stefan
  • Klein, Robert
  • Seiermann, Stephanie

Abstract

In this paper, we analyse a service provider’s mixed bundling problem for services such as sporting events or holiday packages. Pursuing the objective of maximising total revenue, the service provider has to determine static prices for each single product at the beginning of the selling period. Additionally, an optimal package price has to be chosen for the bundle that comprises one unit of each single product. Because of capacity constraints, the availability of products can change over time such that consumers are forced to switch from their preferred subset of products to an alternative following dynamic substitution.

Suggested Citation

  • Mayer, Stefan & Klein, Robert & Seiermann, Stephanie, 2013. "A simulation-based approach to price optimisation of the mixed bundling problem with capacity constraints," International Journal of Production Economics, Elsevier, vol. 145(2), pages 584-598.
    • Handle: RePEc:eee:proeco:v:145:y:2013:i:2:p:584-598
    DOI: 10.1016/j.ijpe.2013.05.014
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    2. Chen, Ting & Shan, Feifei & Yang, Feng & Xu, Fengmei, 2023. "Online retailer bundling strategy in a dual-channel supply chain," International Journal of Production Economics, Elsevier, vol. 259(C).
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    4. Li, Jianbin & Liu, Lang & Luo, Xiaomeng & Zhu, Stuart X., 2023. "Interactive bundle pricing strategy for online pharmacies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    5. Xu, Yueying Hazel & Wong, IpKin Anthony & Tan, Xiuchang Sherry, 2016. "Exploring event bundling: The strategy and its impacts," Tourism Management, Elsevier, vol. 52(C), pages 455-467.
    6. Ata Allah Taleizadeh & Masoumeh Sadat Babaei & Seyed Taghi Akhavan Niaki & Mahsa Noori-daryan, 2020. "Bundle pricing and inventory decisions on complementary products," Operational Research, Springer, vol. 20(2), pages 517-541, June.
    7. Mayer, Stefan & Steinhardt, Claudius, 2016. "Optimal product line pricing in the presence of budget-constrained consumers," European Journal of Operational Research, Elsevier, vol. 248(1), pages 219-233.
    8. Pan, Fei & Pan, Shenle & Zhou, Wei & Fan, Tijun, 2022. "Perishable product bundling with logistics uncertainty: Solution based on physical internet," International Journal of Production Economics, Elsevier, vol. 244(C).
    9. Moon, Ilkyeong & Park, Kun Soo & Hao, Jing & Kim, Dongwook, 2017. "Joint decisions on product line selection, purchasing, and pricing," European Journal of Operational Research, Elsevier, vol. 262(1), pages 207-216.
    10. Haiyan Shan & Chen Zhang & Guo Wei, 2020. "Bundling or Unbundling? Pricing Strategy for Complementary Products in a Green Supply Chain," Sustainability, MDPI, vol. 12(4), pages 1-25, February.
    11. Vamosiu, Adriana, 2018. "Compatibility and bundling of stand and No stand-alone use complements," International Journal of Production Economics, Elsevier, vol. 201(C), pages 62-74.

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