search query: @author Banker, R. D. / total: 19
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| Author: | Banker, R. D. Hansen, S. C. |
| Title: | The Adequacy of Full-Cost-Based Pricing Heuristics |
| Journal: | Journal of Management Accounting Research
2002 : VOL. 14:1, p. 33-58 |
| Index terms: | COSTS PRICING HEURISTIC METHODS ANALYTICAL REVIEW |
| Language: | eng |
| Abstract: | The authors investigate the performance of a full-cost heuristic in a service setting. In the authors' model, a service firm determines the amount of capacity, a price, and a price discount each period. Based upon the price, a stochastic number of customers will place service orders. If too many orders arrive in a period, the firm will offer a price discount to those customers willing to back order and accept service the next period. Even though the model is fairly simple, the optimal pricing, price discount, and capacity rules are complex and require extensive calculations. The authors examine how closely three distinct heuristics approximate the optimal performance. The best-performing heuristic is a full-cost pricing rule based upon a constrained version of the firm's optimization program. |
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