Pricing policies in an oligopolistic market: A system dynamics study. A study of the design of pricing policies in a manufacturing firm, with specific reference to the synthetic fibre industry.

摘要

The objective of this thesis is to investigate and describe componentsudof pricing system which influence the dynamic performance of a price leaderudmanufacturing firm in an oligopoly capital intensive industry producing anudidentical intermediate product (s). The synthetic fibre industry is chosen as anudillustrative case upon which the discussion is built. However, this workudcould generally be applied to a wide variety of organizations and situations.udAfter discussing the suitability of system dynamics to the formulationudof long-run pricing strategy, a model of the pricing system is constructedudby using this technique. The behaviour of this system is examined in termsudof feedback loops. That is to illustrate how the characteristics of theseudloops and the interaction among them affect the dynamic behaviour of theudsystem, and how this behaviour can be improved via changing the components ofudthese loops and/or their structures.udThe improved system is simulated under different external disturbances,udcertain parameter changes, and different pricing control policies. Theudsimulation shows that the design of a set of robust pricing policies makes theudsystem insensitive to external disturbance and error in parameters. It alsoudshows that the ability of the firm to attain its growth and profitabilityudobjectives is affected by the chosen control pricing policies.udSome potential applications of the model, particularly, as planning andudtraining tools are highlighted.udIt is concluded that System Dynamics is an appropriate approach to theudformulation of the long-run pricing strategies.