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

Abstract

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.