Analyzing multiple pricing decisions for substitutes under stochastic demand: An experiment

2021 ◽  
Author(s):  
Nur Ayvaz‐Çavdaroğlu ◽  
Mürüvvet Büyükboyacı
Keyword(s):  
Stochastic Demand ◽  
Pricing Decisions

PRICING AND INVENTORY DECISIONS WITH UNCERTAIN SUPPLY AND STOCHASTIC DEMAND

2013 ◽  
Vol 30 (06) ◽  
pp. 1350030 ◽  
Author(s):  
CHIRAG SURTI ◽  
ELKAFI HASSINI ◽  
PRAKASH ABAD
Keyword(s):  
Supply And Demand ◽  
Stochastic Demand ◽  
Supply Uncertainty ◽  
Unified Framework ◽  
Pricing Decisions ◽  
Conduct Sensitivity Analysis ◽  
General Distributions ◽  
Uncertain Supply ◽  
Shed Light

We consider a retailer, facing uncertain supply and price-sensitive stochastic demand, who has to make stocking and pricing decisions for a given selling period. We also consider the case when the demand is price-sensitive deterministic and provide a unified framework for the model with additive errors. For both scenarios, we look at the case when the price is set before receiving the supply, called simultaneous pricing and the case when the price is set after receiving it, which is called postponed pricing. We develop a procedure for finding the optimal policy for the retailer with general distributions for the supply and the demand. To study the effect of supply uncertainty on expected profit, we conduct sensitivity analysis and develop results for both pricing scenarios and give insights. The results have important implications for a retailer in the supply chain, where a portion of the inventory may be lost due to variety of factors including mishandling and failure to meet quality standards. The findings shed light on the nature and role of prices and their relationship to supply and demand.

scholarly journals Price Differentiation and Inventory Decisions in a Socially Responsible Dual-Channel Supply Chain with Partial Information Stochastic Demand and Cannibalization

2020 ◽  
Vol 12 (22) ◽  
pp. 9577
Author(s):  
Syed Asif Raza
Keyword(s):  
Supply Chain ◽  
Market Share ◽  
Partial Information ◽  
Stochastic Demand ◽  
Pricing Decisions ◽  
Deterministic Demand ◽  
Dual Channel ◽  
Price Differentiation ◽  
Dual Channel Supply Chain ◽  
The Impact

Corporate social responsibility (CSR) has received much of the attention in supply chain management, in particular the pricing decisions. Most existing models that enable CSR integration into pricing decisions in a supply chain context assume deterministic demand and focus on a single distribution channel. Despite the fact that dual-channel supply chain (DCSC) has received popularity, most pricing decisions models in DCSC assume fixed and deterministic market share distribution between channels, and no demand leakages (cannibalization). This paper addresses these gaps by proposing a CSR enabled DCSC model pricing in which the demand is considered to be stochastic and market share distribution between channels in DCSC is optimally determined using a differentiation price, and the impact of demand leakages is also taken into consideration. Unlike existing studies, which only enable pricing decisions due to deterministic demand consideration, comprehensive DCSC models are proposed that provide joint decisions framework on CSR investment, pricing, and inventories. We have also considered the extension of the demand scenario when the distribution of demand is unknown. The two most common coordination schemes, the centralized (integrated) and the decentralized coordination is explored for the three demand situations: (i) deterministic demand; (ii) stochastic with full information; and (iii) stochastic with partial information. We are able to find analytical (closed-form) solutions for most demand situations. The centralized coordination performed better compared to the decentralized for all demand scenarios. The models are benchmarked when the demand is stochastic with known and unknown distributions, as well as, the case of the deterministic demand. A detailed numerical analysis is also presented in order to study the impact of using the price differentiation for market segmentation, the demand leakage, and partial knowledge on the stochastic demand on the players’ decisions and revenues in the supply chain.

CEO and CFO Equity Incentives and the Pricing of Audit Services

2013 ◽  
Vol 33 (2) ◽  
pp. 1-25 ◽  
Author(s):  
B. Anthony Billings ◽  
Xinghua Gao ◽  
Yonghong Jia
Keyword(s):  
Positive Association ◽  
Audit Fees ◽  
Internal Controls ◽  
Audit Risk ◽  
Pricing Decisions ◽  
Equity Incentives ◽  
Accounting Scandals ◽  
Using Data ◽  
Distinctive Role

SUMMARY: The alleged perverse role of managerial incentives in accounting scandals, and the distinctive role of auditors in identifying and intervening in attempted earnings manipulation, highlight the importance of explicitly considering executive incentive plans by auditors in the auditing process. By empirically testing auditors' responses to CEO/CFO equity incentives in planning and pricing decisions using data from 2002 through 2009, we document compelling evidence that CFO equity incentives are positively associated with audit fees and CEO equity incentives are not statistically related to audit fees, suggesting that auditors perceive heightened audit risk associated with CFO equity incentives. Our further analyses reveal that the positive association between CFO equity incentives and audit fees is more pronounced in firms with weak internal controls, indicating heightened risk associated with CFO equity incentives in this setting perceived by auditors. JEL Classifications: G30, G34, M42, M52.

scholarly journals Joint Innovation Investment and Pricing Decisions in Retail Supply Chains with Customer Value

2021 ◽  
Vol 13 (3) ◽  
pp. 1309
Author(s):  
Jiali Qu ◽  
Benyong Hu ◽  
Chao Meng
Keyword(s):  
Supply Chain ◽  
Cooperative Game ◽  
Customer Value ◽  
Business Models ◽  
Value Added ◽  
Revenue Sharing ◽  
Nash Bargaining ◽  
Product Price ◽  
Pricing Decisions ◽  
Game Equilibrium

In the retail industry, customer value has become the key to maintaining competitive advantages. In the era of new retail, customer value is not only affected by the product price, but it is also closely related to innovations, such as value-added services and unique business models. In this paper, we study the joint innovation investment and pricing decisions in a retailer–supplier supply chain based on revenue sharing contracts and customer value. We first find that, in the non-cooperative game, equilibrium only exists in the supplier Stackelberg game. However, revenue sharing contracts cannot coordinate the supply chain in the non-cooperative game. By considering supply chain members’ bargaining power, we find that there exists a unique equilibrium for the Nash bargaining product. In addition, revenue sharing contracts can coordinate the supply chain and achieve the optimal consumer surplus. When the supply chain is coordinated, supply chain profit is allocated to the supply chain members based on their bargaining powers.

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