Optimal pricing model for electronic products

Electronic commerce encompasses all electronically conducted business activities, operations, and transaction processing. With the development of electronic commerce via Internet, during the past decade, many companies have changed the way they connect to and deal with their customers and partners. In this paper we introduce a Geometric Programming (GP) based model to analyze the pricing method and the service quality for E-business companies. The proposed method of this paper considers electronic products which are all kinds of products to be sold via web supermarkets. Therefore, they can cover pure digital and also non-digital products. The model proposed in this research work, deals with non-digital goods, which are supplied through web. The resulted non-linear model is directly solved by using Geometric Programming (GP) and a closed form of solution is presented. We assume that the demand is influenced by price, marketing and service expenditures. We also assume that the cost of production is affected by demand. We analyze the solution in different cases, in order to study the behavior of the model and for each case numerical examples are used to demonstrate the implementation of our analysis. The sensitivity analysis is also presented at the end to analyze the behavior of the model.