In the Research Paper, "Personalized Dynamic Pricing of Limited Inventories

question 30

Essay

In the research paper, "Personalized Dynamic Pricing of Limited Inventories" by Aydin and Ziya, published in Operations Research, Vol. 57, No. 6, pp. 1523-1531 (2007), the authors state that research "suggests that personalized pricing is more acceptable to consumers when it is framed as offering tailored discounts from a fixed price." Survey summaries found that "90% of customers found . . . personalized pricing unacceptable," but "only 64% of the same customers stated that they would be bothered if other customers got better discount offers than they did." What economic insight are these customers missing about the benefits of price discrimination in any form?

Grasp how the size of the sample and the population standard deviation influence the margin of error in confidence intervals.

Know how to construct confidence intervals for population means and proportions using sample data.

Understand the direct relationship between the margin of error, sample size, and confidence levels.

Appreciate the probabilistic nature of confidence intervals and how they may not always contain the true population parameter.

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Definitions:

Total Control

A management approach where every aspect of a project, process, or organization is under direct control with no external influences.

Gainsharing Plans

Performance-based compensation programs that share the financial benefits of efficiency improvements, increased productivity, or cost savings with employees.

Organizational Resources

Assets, both tangible and intangible, that an organization utilizes to operate and achieve its objectives.

Sales Incentives

Financial or non-financial rewards offered to sales personnel to motivate them to increase sales performance.