Aspects of price determination using goal programming approaches

Abstract

The use of goal programming in various real-world areas - including resource allocation, engineering, agriculture and other applications - has increased a lot in the past few years. The aim of this dissertation is to investigate goal programming approaches in determining prices. Various aspects of price determination - such as cosls, existing prices, competitors' prices, volume change due to price change and other aspects are incorporated in the model in order to suggest reasonable and realistic prices. Taking just these factors into account will not completely solve the problem, as there are usually certain goals that the decision maker would like to achieve. For example, the decision maker would probably like to attain an acceptable pre-specified minimum profit level without adjusting current prices too much whilst keeping prices competitive to insure that customers are not lost in the process of change. In this study, a goal programming model is developed for the determining of products' prices with consideration of these goals. The model makes provision for the change in demand due to the change in prices.