Markdown Optimization via Approximate Dynamic Programming

DOI

10.1080/18756891.2013.754181How to use a DOI?

Keywords

Approximate Dynamic Programming, Multinomial logit model, Cross-price elasticity, Markdown optimization, Pricing

Abstract

We consider the markdown optimization problem faced by the leading apparel retail chain. Because of substitution among products the markdown policy of one product affects the sales of other products. Therefore, markdown policies for product groups having a significant crossprice elasticity among each other should be jointly determined. Since the state space of the problem is very huge, we use Approximate Dynamic Programming. Finally, we provide insights on the behavior of how each product price affects the markdown policy.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - JOUR
AU  - Özlem Coşgun
AU  - Ufuk Kula
AU  - Cengiz Kahraman
PY  - 2013
DA  - 2013/01/02
TI  - Markdown Optimization via Approximate Dynamic Programming
JO  - International Journal of Computational Intelligence Systems
SP  - 64
EP  - 78
VL  - 6
IS  - 1
SN  - 1875-6883
UR  - https://doi.org/10.1080/18756891.2013.754181
DO  - 10.1080/18756891.2013.754181
ID  - Coşgun2013
ER  -