Optimal pricing in the presence of advance booking strategies for complementary supply chains (original) (raw)
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Journal of Industrial and Management Optimization, 2015
Supply chain members coordinate with each other in order to obtain more profit. The major mechanisms for coordination among supply chain echelons are pricing, inventory management, and ordering decisions. Regarding to these mechanisms, supply chain participants have conflicts of interest. This paper concerns coordination of enterprise decisions including pricing, advertising, ordering, and inventory decisions in a multi-echelon supply chain consisting of multiple suppliers, one manufacturer, and multiple retailers. In the current study, a novel inventory model is presented for both the manufacturer, and the retailers who are able to determine the number of orders for each product. Moreover, each supply chain member has equal power and make their decisions simultaneously. The proposed model considers the relationships among three echelon supply chain members based on a non-cooperative Nash game with pricing and inventory decisions. An iterative solution algorithm is proposed to find Nash equilibrium point of the game. Several numerical examples are presented to study the application of the model as well as the effectiveness of the algorithm. Finally, a comprehensive sensitivity analysis is performed and some important managerial insights are highlighted.
Analysis of pricing decision for substitutable and complementary products with a common retailer
Pacific Science Review A: Natural Science and Engineering, 2016
In this paper, a competition of selling two substitutable products and one complementary product has been studied in two-echelon supply chain systems in which one of these three products is produced by one manufacturer separately, and all produced items are sold through a common retailer in the market. The demand of each product depends linearly on prices of these three products as per their nature. In this study, four different decision scenarios are developed mathematically under the game theory framework to maximize the profit function of each participant of the supply chain, and a number of pricing strategies are subsequently worked out for manufacturers and retailer. Finally, the model under different scenarios is illustrated with numerical data to study the feasibility of the model exploring the managerial insights, as well. Different marketing policies are predicted for maximum individual and system profits.
International Journal of Production Economics, 2018
Increasing attention to sustainable development issues and competition between different supply chains are forcing the stakeholders to use different incentives to capture more market share. Collecting channels are one of the effective topics in the reverse competitive chains. Because of the importance of this issue, we consider two collecting reverse supply chains consist of a retailer and a manufacturer who compete together by proposing more rewards to the customers. One of these chains tries to facilitate the collecting process and obtain more market share by using the direct and traditional channels advantages. The other one uses only the traditional channel. Hence, the return rate of each channel not only depends on the self-reward but also is function of the cross-rewards suggested to the customer by the competitors in the other channels. The competitive environment in our model consists of internal and external competitions. Competition between two channels of one chain infers to internal competition, external competition that points out to competition among two supply chains. We apply three game theory structures to obtain the optimal channels rewards: Nash, Nash-Stackelberg-first supply chain, and Nash-Stackelberg-second supply chain. Finally, we comparing the results of decision variables and profit function of members under three structures through numerical analysis. Our numerical investigations show that e-channel because of less costly than traditional channel proposes more appropriate reward to customers, so this channel could obtain a more substantial share of the market. Moreover, the results reveal that highest return rate occurred under Nash scenario while Nash-Stackelberg-first supply chain and Nash-Stackelberg-second supply chain are the most economic scenarios for the first and the second supply chains, respectively.
Analysis of online dual channel supply chain20191230 26384 1yv83a
With the fast growth of e-commerce, not only many manufacturers have engaged in direct online sales, but also retailers enter the e-commercial market to increase their sales. In addition, due to the computer literacy penetration, more consumers are willing to make purchases online for convenience and time saving. In practice, manufacturers may have two web-based selling channel options, selling products through e-retailers or selling products directly to customers through their own websites. In this paper, we consider an online dual-channel supply chain consisting of one manufacturer and one e-retailer, in which customers can purchase products from either the e-retailer channel or the manufacturer's website channel. Such a two-channel system not only creates unprecedented opportunities, but also adds new competition between the manufacturer and e-retailer channels. This paper focuses on the strategies of the manufacturer and the e-retailer under two price decision models, pricing uniformly by the manufacturer or pricing separately. We also consider the effect of the national advertising, which can stimulate potential purchase behaviour to some degree. It is assumed that the demand is simultaneously influenced by price and logistics service level. We find that the logistics level is proportional to the e-retail price under four different models. In addition, the logistics service level positively influences the national advertising expenditure of the manufacturer. Using numerical analysis, we find that when the manufacturer decides to invest in the national advertising and both players of supply chain set price separately, both the supply chain and customers can achieve a win-win situation if the e-retailer improves its bargaining power.
Anais da Academia Brasileira de Ciencias, 2016
This paper studying the impact of strategic customer behavior on decentralized supply chain gains and decisions, which includes a supplier, and a monopoly firm as a retailer who sells a single product over a finite two periods of selling season. We consider three types of customers: myopic, strategic and low-value customers. The problem is formulated as a bi-level game where at the second level (e.g. horizontal game), the retailer determines his/her equilibrium pricing strategy in a non-cooperative simultaneous general game with strategic customers who choose equilibrium purchasing strategy to maximize their expected surplus. At the first level (e.g. vertical game), the supplier competes with the retailer as leader and follower in the Stackelberg game. They set the wholesale price and initial stocking capacity to maximize their profits. Finally, a numerical study is presented to demonstrate the impacts of strategic behavior on supply chain gain and decisions; subsequently the effect...
Joint pricing and inventory decisions in competitive retail
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In this paper, we evaluate the joint pricing and inventory decisions for retailers in a competitive market. Specifically we develop a demand models for the optimization of retail sales of perishable products as a differential game, solving the joint inventory and pricing problem over a finite horizon. We examine general pricing policies over the sales horizon for both symmetric and asymmetric firms within the market and discuss the implications of both. We examine specific strategies for the smaller firm, such as service differentiation, when competing with a much larger competitor in an asymmetric duopoly, as well as the role of price leadership as a strategy for the larger firm when the market is highly competitive.
Price, delivery time and retail service sensitive dual channel supply chain
Scientia Iranica, 2019
This study deals with a dual channel supply chain where the selling price of each player, delivery time for direct channel and retail service dependent demand structures are considered for manufacturer and retailer. In the direct channel, the manufacturer sells the products directly to the customers with a maximum mentioned delivery time. The delivery time of the products is adjustable according to customers' demand with an extra delivery charge. In the retail channel, the customers are extra benefited by the retail service and direct connection with the products. Selling price for the direct market is considered as lower than the retail market selling price. The behavior of the model under the integrated system is analyzed. In the decentralized structure, vertical Nash and manufacturer Stackelberg models are also discussed. The sensitivity of the key parameters is examined to test the feasibility of the model. Finally, a numerical example with graphical illustrations is provided to investigate the proposed model.
Research Square (Research Square), 2023
Different factors affect customers' decisions on the selection of a service. Two of the essential factors are the price and the level of service provided by a seller to customers. The seller's credibility is also among the influential factors in selecting and buying a service that is reinforced by advertisements (offline advertisement or sales through an online group buying platform) and the provided service level. Accordingly, this study develops a fuzzy mathematical model to simultaneously determine price, service level, and advertisement level in a dual channel supply chain during two current and future courses according to the cooperative game between the seller and the platform. All parameters of the problem are determined as fuzzy variables. The seller can sell her/his service through individual sales strategy (offline) or mixed strategy, selling her/his service through the platform (online) and offline channels. The aim is to determine the optimal strategy for the seller when deciding to join the group buying platform, which is compared with the individual strategy. By considering the structures of group buying platforms, different refunding policies and revenue sharing policies are developed under six scenarios for the centralized model .The optimal solutions of the problem are then defined using the game theory approach and fuzzy sets theory for each scenario. Ultimately, a numerical example is provided to indicate the effectiveness of theoretical results of models and developing management insights. Besides, performed sensitivity analyses in this article also provide the effect of the change in essential parameters on seller decisions.
Price and profit decisions in manufacturer-led dual-channel supply chain configurations
International Journal of Industrial Engineering Computations, 2020
In the world of digitization, e-commerce practices has become more popular and attracts manufacturers to combine their traditional retail channel with an e-channel. To add some salient features in the existing study, this study develops an optimal pricing and profit decision model for manufacturer-led dual-channel supply chain configurations; namely Vertically Integrated Dual-Supply Chain (VID-SC), Decentralized Dual-channel Supply Chain (DD-SC), Partially Integrate Dual-Supply Chain (PID-SC) and Horizontally Integrated Dual-Supply Chain (HID-SC). The aim of this study is to examine the effect of selected decision parameters namely cooperative advertisement, delivery lead time and free-riding on price and profit of manufacturer-led dual supply chain configurations. A linear programming for profit maximization is developed and backward induction method is used to find the optimum values of price and profit. A numerical analysis is performed to evaluate the effect of selected decision parameters on price and profit. To check the robustness of the outcomes an interaction plot is made to indicate the relationship between the selected decision parameters on optimum price. The best fit values of these decision parameters lead to the optimum price and the profit. The study helps to find the best fit value of the selected decision parameters for their specified dualchannel configuration. As a result, the model contributes as a guideline moreover it is proficient to guide manufacturers and channel members as a decision making practices without actual implementation of any strategy or policy.