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Revenue Management and Survival Analysis in the Automobile Industry

  • Authors
  • André Jerenz

About this book

Introduction

Today, the automobile industry is faced by increasing price competition while profit margins are shrinking. The used car sector is affected the most, amplified by excess supply in day registrations and the impact of the continuing rebate war in the new car sector.

André Jerenz develops a price-based revenue management framework to support retailers in establishing better and more profitable pricing strategies, including assigning an initial asking price and the adjustment of price over time. For the profit maximization problem of a used car retailer, the author derives different algorithms for determining optimal strategies by applying stochastic control theory. Within the scope of the demand forecasting component, he proposes the adoption of survival analysis for estimating individual price response functions, modeled by parametric and semi-parametric survival functions. Thus, the effects of variables such as the asking price are taken into account. The evaluation of data from a case study in the German used car market reveals a significant potential for an increase in profitability and confirms the proposed price-based revenue management concept.

Keywords

Automobilindustrie Gebrauchtwagenmarkt Management Pricing stochastic control theory strategy used cars market

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-8349-9840-8
  • Copyright Information Betriebswirtschaftlicher Verlag Dr. Th. Gabler | GWV Fachverlage GmbH, Wiesbaden 2008
  • Publisher Name Gabler
  • eBook Packages Business and Economics
  • Print ISBN 978-3-8349-1037-0
  • Online ISBN 978-3-8349-9840-8
  • Buy this book on publisher's site