Pricing Model and Algorithm for Online Speciality Store with Consideration of Sale Association

An online speciality store is a kind of small retail shop on the Internet that specializes in some merchandise of the same brand or with the similar function. Putting low prices on some special items is a special pricing strategy in online speciality store, which will increase the flow of the Web site and accelerate the sales of other products. The phenomenon that there is positive sale association among different items is called as size effect in this paper. A multi-objective model was built and a particle swarm optimization algorithm was proposed to solve this holistic pricing problem. Maximum of the gross profits and sales was the objective of the model. Simulation results reveal that the model can help online speciality store get more gross profits and more sales.

[1]  Peter C. Fishburn,et al.  Dynamic behavior of differential pricing and quality of service options for the Internet , 1998, ICE '98.

[2]  Yang Zhilian.  Overview of particle swarm optimization , 2003 .

[3]  Michael J. Shaw,et al.  Introduction to Special Issue on Electronic Commerce , 1997 .

[4]  Russell C. Eberhart,et al.  A new optimizer using particle swarm theory , 1995, MHS'95. Proceedings of the Sixth International Symposium on Micro Machine and Human Science.

[5]  Michael J. Shaw,et al.  Characteristics of electronic markets , 1997, Decis. Support Syst..

[6]  T. S. Raghu,et al.  Marketing on the Internet - who can benefit from an online marketing approach? , 2000, Decis. Support Syst..

[7]  James Kennedy,et al.  The particle swarm: social adaptation of knowledge , 1997, Proceedings of 1997 IEEE International Conference on Evolutionary Computation (ICEC '97).

[8]  Jeffrey O. Kephart,et al.  Price dynamics and quality in information markets , 2000, Decis. Support Syst..

[9]  Jae Kyu Lee,et al.  Knowledge assisted dynamic pricing for large-scale retailers , 2000, Decis. Support Syst..

[10]  Michael J. Shaw,et al.  Research opportunities in electronic commerce , 1997, Decis. Support Syst..

[11]  Jae-Cheol Kim,et al.  Pricing strategies in B2C electronic commerce: analytical and empirical approaches , 2005, Decis. Support Syst..

[12]  Craig A. Knoblock,et al.  Semantic Query Optimization for Query Plans of Heterogeneous Multidatabase Systems , 2000, IEEE Trans. Knowl. Data Eng..

[13]  Naoki Abe,et al.  A Web marketing system with automatic pricing , 2000, Comput. Networks.

[14]  James Kennedy,et al.  Particle swarm optimization , 2002, Proceedings of ICNN'95 - International Conference on Neural Networks.