Knowledge Assisted Expert Pricing System for Durable Products in Electronic Commerce

For durable products pricing, we have to consider not only products cost in every period, but also the effect of customer expectation on price in every period. Customer expectation on price is scientific, which makes pricing harder. To solve this problem, we adopted multi-period two stages pricing. In two stages, we selected cost-plus model and customer-expectation model respectively, and integrated them for one pricing period. The principle to set two stages is maximizing the gross profit of an on-line marketing site. We described the concrete pricing algorithms, and reported on preliminary performance evaluation of experiments we conducted using simulated data. The results of experimentation verify that our methods are practical in terms of computational efficiency and are better than multi-period one stage pricing.