Dynamic Pricing and Auction - Department of Industrial Engineering ...

Selecting a pricing method• Markup pricing◦ Unit price = unit cost / (1 – markup on sales)• Target return pricing◦ Unit cost + [(desired return*invested capital)/unit sales]• Perceived value pricing◦ Service, warranty, reliability etc.• Value pricing◦ Quality Vs. Price• Going rate pricing◦ Competitor’s price• Sealed-bid pricing/ Auctions