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Pricing and allocation of retail space with one radio frequency identification enabled supplier and one non-RFID enabled supplier

Author

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  • Joseph G. Szmerekovsky
  • Vera Tilson
  • Jiang Zhang

Abstract

We consider a retailer with one radio frequency identification (RFID) enabled supplier and one non-RFID enabled supplier. Assuming vendor managed inventory, we address the problem of allocation and pricing of the retail shelf-space. Using a Stackelberg game where the retailer leads, we observe that the RFID technology provides a competitive advantage for the RFID enabled supplier. Further, high product substitutability, high demand uncertainty, low tag prices, and low restocking costs favour the RFID enabled supplier. As shelf-space is capacitated with large fixed costs and its demand varies over time, shelf-space management addresses many of the same challenges as revenue management.

Suggested Citation

  • Joseph G. Szmerekovsky & Vera Tilson & Jiang Zhang, 2009. "Pricing and allocation of retail space with one radio frequency identification enabled supplier and one non-RFID enabled supplier," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 3(1), pages 37-55.
    • Handle: RePEc:ids:ijrevm:v:3:y:2009:i:1:p:37-55
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    Cited by:

    1. Chang, Seokcheol & Klabjan, Diego & Vossen, Thomas, 2010. "Optimal radio frequency identification deployment in a supply chain network," International Journal of Production Economics, Elsevier, vol. 125(1), pages 71-83, May.

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