Heuristics for Multi-period Competitive Pricing Strategies for Manufacturing Companies

In this thesis, dynamic competition between two manufacturing companies is analyzed over four quarters in which a competitor and the company are allowed to cut price by 10%, 20%, 30% or do nothing. The competitor cuts the prices based on different profiles such as random, safe or conservative and aggressive. The competitive interaction between companies is based on Sweezy's economic model in which the competitor al-ways has the first move and the response is instantaneous. There are various heuristics developed such as ¿¿¿Beat'em¿¿¿, ¿¿¿Finish'em¿¿¿, ¿¿¿Match'em¿¿¿ and ¿¿¿Forget'em¿¿¿ to achieve maximum profit by price cuts over a year. The performance measure is total profit, which depends on revenue and total cost. The total cost consists of procurement cost, inventory carrying cost, labor cost, machine cost, utility cost and overhead cost. The methodology involves determining demand for our company for a given competitor's price based on log linear equation having cross elasticity of demand as coefficients. For every quantity demanded, a cellular manufacturing system is developed and simulation is performed to obtain the revenue and cost. The heuristics are evaluated on the basis of total profit over a year and it is observed that ¿¿¿Finish¿¿¿em¿¿¿ performs better than the other heuristics.

Name thesis:degree_name

Master of Science (MS)

Level thesis:degree_level

masters

Discipline thesis:degree_discipline

Industrial and Systems Engineering (Engineering and Technology)

Grantor dc:publisher

Ohio University

Year dc:date

2013

Author dc:creator

• Pulugurta, Saikishore

Contributors dc:contributor

• Suer, Gursel

• Economics
• Industrial Engineering
• Manufacturing
• competition
• heuristics

Statement dc:rights

• unrestricted
• This thesis or dissertation is protected by copyright: all rights reserved. It may not be copied or redistributed beyond the terms of applicable copyright laws.

Language dc:language

English

Repository record dc:identifier

http://rave.ohiolink.edu/etdc/view?acc_num=ohiou1357585830

OAI identifier oai:identifier

oai:etd.ohiolink.edu:ohiou1357585830