Affiliations: [a] Department of Management Science, School of Management, Xiamen University, China | [b] Department of Computer Science, University of Manchester, UK | [c] Manchester Business School, University of Manchester, Manchester, UK and EBTIC, Khalifa University, Abu Dhabi | [d] Department of Computer Science and Digital Technology, Northumbria University, UK
Correspondence:
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Correspondence to: Di Xu, Department of Management Science, School of Management, Xiamen University, 361005, China. E-mail: dxu@xmu.edu.cn.
Abstract: With the emergence of customisation services, business-to-business price negotiation plays an increasingly important role in economic and management science. Negotiation pricing aims to provide different customers with products/services that perfectly meet their requirements, with the “right" price. In general, pricing managers are responsible for identifying the “right" negotiation price with the goal of maintaining good customer relationship, while maximising profits for companies. However, efficiently and effectively determining the “right" negotiation price boundary is not a simple task; it is often complicated, time-consuming and costly to reach a consensus as the task needs to take a wide variety of pricing factors into consideration, ranging from operation costs, customers’ needs to negotiation behaviours. This paper proposes a systematic fuzzy system (FS) approach, for the first time, to provide negotiation price boundary by learning from available historical records, with a goal to release the burden of pricing managers. In addition, when the number of involved influencing factors increases, conventional FS approach easily suffers from the curse of dimensionality. To combat this problem, a novel method, simplified FS with single input and single output modules (SFS-SISOM), is also introduced in this paper to handle high-dimensional negotiation pricing problems. The utility and applicability of this research is illustrated by three experimental datasets that vary from both data dimensionality and the number of training records. The experimental results obtained from two approaches have been compared and analysed based on different aspects, including interpretability, accuracy, generality and applicability.
Keywords: Negotiation pricing, decision support system, fuzzy systems, curse of dimensionality
