Adaptation of e-commerce retailing to enhance customer satisfaction within a dynamical system under transfer of risk

Abstract

Dynamic pricing in the newsboy problem within the context of dual-channel retailing significantly impacts inventory management strategies, allowing retailers to optimize pricing decisions based on real-time demand fluctuations across multiple sales channels. By dynamically adjusting prices, retailers can better balance inventory levels between online and offline channels, maximizing profit margins while minimizing stockouts or excess inventory. Effective implementation requires careful consideration of consumer behavior, competitive dynamics, and channel-specific constraints to achieve desired outcomes and maintain customer satisfaction. This study explores the application of the Black-Scholes equation in solving the newsboy problem with dynamic pricing, investigating its effectiveness in optimizing inventory management decisions. It delves into the concept of risk transfer within this framework, examining how it impacts decision-making processes. Additionally, the study evaluates the incorporation of green considerations at the product level, analyzing its implications for sustainability and market positioning. Furthermore, it scrutinizes the pros and cons of online marketing strategies, highlighting their impact on brand visibility, customer engagement, and market reach. Finally, the paper explores the concept of dual-channel retailing, assessing its role in enhancing customer experience and optimizing sales channels. Sales effort initiatives and consideration of green level of the product provide a 34.75% enhance profit compare to the traditional retailing system without sales effort and green level of the products.