Pricing and capacity planning for product-line expansion and reduction
研究企业在引入或淘汰产品时，如何制定定价和产能决策，发现需求不确定性相似且负相关时，新产品引入可能降低现有产品价格，为战略定价提供新视角。
We investigate optimal pricing and capacity planning decisions for product-line settings such as introducing a new product or dropping an existing one. We consider a two-product, two-period model with stochastic demands, where price and capacity decisions are made at the outset. Investment in capacity must be traded-off against the possibility of buying at higher spot market prices due to shortage in capacity or charging a higher price to manage the demand. Prior studies argue that introducing an additional product to the product-line strains capacity, resulting in an increase in the price of an existing product. In contrast, we find that introducing a new product can also result in a drop in price of an existing product, enabling strategic pricing by firms. The necessary condition for this to occur is that the demand uncertainties for the products are of similar magnitude and negatively correlated. Similar insights are obtained for the setting where an existing product is dropped from the product-line. Hence, product-market decisions and contextual factors play a role in capacity planning, capacity cost allocation and pricing.