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The Sorting Process as a Tool for Promoting the Demand of Heterogeneous Customers

Author

Listed:
  • Tchai Tavor

    (Department of Economics, The Max Stern Academic College of Emek Yezreel, Jezreel Valley 999080, Israel)

  • Limor Dina Gonen

    (Department of Economics and Business Administration, Ariel University, Ariel 999080, Israel)

  • Uriel Spiegel

    (Department of Management, Bar-Ilan University, Israel and Zefat College, Ramat Gan 999080, Israel)

Abstract

The present study concerns product diversification. The products differ in size, shape, flavor, fat content, etc., so that the producer can more specifically modify the particular product to the unique requirements of nonhomogeneous customers. The mathematical model assumes diversified demands of nonhomogeneous consumers for an initial unsorted item. The sorting process generates a better match between customer requirements and the actual supply of sorted products. Thus, the implementation of sorting costs allows for an increase in customer demands by adopting product characteristics that are closer to customer needs and tastes. The study also considers the pricing policy for diversified products in order to determine if price discrimination is preferable for attaining the manufacturer’s goal of profit maximization.

Suggested Citation

  • Tchai Tavor & Limor Dina Gonen & Uriel Spiegel, 2021. "The Sorting Process as a Tool for Promoting the Demand of Heterogeneous Customers," Mathematics, MDPI, vol. 9(2), pages 1-18, January.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:2:p:152-:d:478859
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    References listed on IDEAS

    as
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