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Risk pooling through physical probabilistic selling

Author
Zhang, Y.; Hua, G.; Cheng, T.C.E.; Zhang, J.; Fernandez, V.
Type of activity
Journal article
Journal
International journal of production economics
Date of publication
2020-01
Volume
219
First page
295
Last page
311
DOI
10.1016/j.ijpe.2019.04.014
Repository
http://hdl.handle.net/2117/171254 Open in new window
URL
https://www.sciencedirect.com/science/article/pii/S0925527319301379 Open in new window
Abstract
This paper investigates the impacts of a new type of probabilistic selling () where the retailer orders specific products and package some as a discounted physical probabilistic product (PPP) rather than merely a virtual choice. We call this strategy as physical probabilistic selling (). The price gap between the specific products and the probabilistic product results in demand reshape, i.e., some customers who originally buy specific products will switch to buying the probabilistic product, wh...
Keywords
Demand reshape, Probabilistic selling, Risk pooling, Supply shortage
Group of research
GRO - Grup de recerca en organització

Participants