Dynamic Pricing in Supply Chains: Bringing the Perishable Approach to Dynamic Car Pricing - Article Example
Car manufacturing and retail industry experience challenges in determining the market demand and the relative cost of acquiring the appropriate cars on demand. However, this is due to the effects of Internet and E-commerce- Commerce that has created a direct link between the manufacturing company and the consumers bypassing the Supply Chain Retailers. The essay analyzes the vibrant pricing in Supply Chains with regard to perishable approach to the dynamics in Car Pricing.
Effects of the internet significantly affect pricing in the automotive industry. Unlike in the past, the classic car dealers and manufacturers face competition and increased threats from the third party E-retailers. However, there is a significant change in car pricing since the customers are able to communicate directly with the manufacturers concerning a variety of car models and the corresponding procurement rates.
Through coordination between the automotive industry and the Supply Chain, the automobile industry can reschedule production and management of car inventory. This would allow the Supply Chain stores to make cars within the consumable limits. The aspects of consumer choice are key factors in overcoming the dynamics caused by the effects of the internet and E-marketing since customers are able to view cars through the internet; thus rendering the outdated car models unnecessary to the company. This creates substantial losses, which the automotive manufacturing companies do not wish to bare. Hence it creates a perception that the car industry is dynamic and perishable.
Automotive industry is not able to quantify the profit potential and the sales variability as a result of the dynamics in the car pricing. However, the automotive industry would be able to achieve significant benefits only if there are few changes in car prices. Effects of in car prices caused by varying consumer preference, the influence of the internet and e-commerce has shifted the supply chain management criteria in a marvelous way. However, the vibrant change is a revolution that the manufacturers and retailers have to adapt and put up with accordingly since it is the latest technological advancement in the commercial sector.