Two-period pricing strategies in a two-echelon supply chain with conspicuous consumption

2019 ◽  
Vol 53 (2) ◽  
pp. 667-685 ◽  
Author(s):  
Rongjing Zhu ◽  
Musen Xue
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Wholesale Price ◽  
Conspicuous Consumption ◽  
Selling Price ◽  
Pricing Strategies ◽  
Pricing Model ◽  
Single Product ◽  
Pricing Options ◽  
Stackelberg Leader

This paper investigates the problem of pricing strategies in a two-echelon supply chain with conspicuous consumers. We develop a two-period pricing model for the supply chain which is consisted of one manufacturer and one retailer who involve in trading a single product. The manufacturer being a Stackelberg leader, decides the wholesale price, the retailer acts as a follower and sets the selling price. As a leader, the manufacturer has two pricing options: (1) sets a common wholesale price for the entire selling season; (2) sets two different wholesale prices for the two selling periods respectively. Based on the manufacturer’s pricing options, we develop four pricing cases considering the effect of conspicuous consumption and compare the equilibrium outcomes. In addition, we study the impacts of the main parameters on the equilibrium results under different cases in the numerical study and obtain some managerial insights.

scholarly journals Dynamic Game and Coordination Strategy of Multichannel Supply Chain Based on Brand Competition

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-26 ◽  
Author(s):  
Junhai Ma ◽  
Fang Zhang ◽  
Binshuo Bao
Keyword(s):  
Supply Chain ◽  
Dynamic Pricing ◽  
Tracking System ◽  
Wholesale Price ◽  
Stable Region ◽  
Selling Price ◽  
Direct Channel ◽  
Channel Competition ◽  
Brand Competition ◽  
Adjustment Speed

In is very important for the corresponding author to have a linked ORCID (Open Researcher and Contributor ID) account on MTS. To register a linked ORCID account, please go to the Account Update page (http://mts.hindawi.com/update/) in our Manuscript Tracking System and after you have logged in click on the ORCID link at the top of the page. This link will take you to the ORCID website where you will be able to create an account for yourself. Once you have done so, your new ORCID will be saved in our Manuscript Tracking System automatically.”"?>this paper, two noncooperative dynamic pricing strategies are used in a supply chain. Two dynamic Stackelberg game models have been built involving both a manufacturer and a retailer assumed to be the leader in order. In the two models, the manufacturer sells national-brand (NB) product to an independent retailer or directly to consumers through a direct channel. The retailers sell a store-brand (SB) product when they sell the NB product coming from the manufacturer. Thus, there is competition both in different channels and in products with different brands. To analyze the complexity of the model, parameter bifurcation diagrams and strange attractor diagrams have been therefore plotted. The results show that the game leader has advantages when the market is stable, but it turns disadvantageous if the state falls into unstable as the game follower can quickly adjust the strategy to seize the market. The wholesale price and the direct selling price are high that they incur larger profits if the manufacturer is dominant, but it gets worse when the adjustment speed increases. While in the model where the retailer plays a dominant role, the increase in the adjustment speed is unfavorable to retailer. By controlling the total cost of the direct channel and increasing channel competition strength and brand competition strength, the manufacturers can increase their profits in the game dominated by the retailer. In addition, the stable region within the system will be narrow since the market is sensitive to the channel competition, brand competition, and advertising indifference.

scholarly journals Risk-Averse Suppliers’ Optimal Pricing Strategies in a Two-Stage Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-11 ◽  
Author(s):  
Rui Shen ◽  
Zhiqing Meng ◽  
Xinsheng Xu ◽  
Min Jiang
Keyword(s):  
Supply Chain ◽  
Loss Function ◽  
Wholesale Price ◽  
Competitive Environment ◽  
Optimal Pricing ◽  
Risk Averse ◽  
Pricing Strategies ◽  
Two Stage ◽  
Future Loss

Risk-averse suppliers’ optimal pricing strategies in two-stage supply chains under competitive environment are discussed. The suppliers in this paper focus more on losses as compared to profits, and they care their long-term relationship with their customers. We introduce for the suppliers a loss function, which covers both current loss and future loss. The optimal wholesale price is solved under situations of risk neutral, risk averse, and a combination of minimizing loss and controlling risk, respectively. Besides, some properties of and relations among these optimal wholesale prices are given as well. A numerical example is given to illustrate the performance of the proposed method.

scholarly journals The Impact of Price Comparison Service on Pricing Strategy in a Dual-Channel Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-13 ◽  
Author(s):  
Qi Xu ◽  
Zheng Liu ◽  
Bin Shen
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Profit Maximization ◽  
Pricing Strategy ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Price Comparison ◽  
Dual Channel ◽  
Dual Channel Supply Chain ◽  
The Impact

Recently, price comparison service (PCS) websites are more and more popular due to its features in facilitating transparent price and promoting rational purchase decision. Motivated by the industrial practices, in this study, we examine the pricing strategies of retailers and supplier in a dual-channel supply chain influenced by the signals of PCS. We categorize and discuss three situations according to the signal availability of PCS, under which the optimal pricing strategies are derived. Finally, we conduct a numerical study and find that in fact the retailers and supplier are all more willing to avoid the existence of PCS with the objective of profit maximization. When both of retailers are affected by the PCS, the supplier is more willing to reduce the availability of price information. Important managerial insights are discussed.

scholarly journals Competitive pricing strategies of multi channel supply chain under direct servicing by the manufacturer

2020 ◽  
Author(s):  
Amit Sarkar ◽  
Brojeswar Pal
Keyword(s):  
Supply Chain ◽  
Strategic Alliance ◽  
Wholesale Price ◽  
Optimum Level ◽  
Selling Price ◽  
Positive Effects ◽  
Pricing Decisions ◽  
The People ◽  
Demand Rate ◽  
Competitive Pricing

Internet and its accessible devices (e.g., mobiles, computers) are the unmitigated blessings to the people. Nowadays, internet connectivity almost eliminates all kinds of blockades for the verification of authentication, comparison of prices, and services for a product. Consequently, the market has been becoming more competitive compared to decision making.  In this paper, we construct a multi-channel supply chain (MCSC) frameworks with traditional channels as well as a direct channel (DC), where the manufacturer provides services to the customers for both the cases. Then the optimal decisions of the manufacturer and the retailers are examined. The optimal pricing decisions and services are discussed and also compared the profits with one another under various cases (Stackelberg Settings, Strategic Alliance, and two types of NO Improved Service). Then the sensitivity of the service cost coefficients and the cross-channel price coefficients on the profits for each player and the supply chain is analyzed. We find out the best profitable strategies under the parameters such as service costs and the positive effects of the service on the demand rate. We also mark out the optimum level of the services so that the profit will be maximized for each player. Finally, we define an interval such that if the service costs belong to that interval, then the selling price of the DC would be lesser than the wholesale price. These findings help companies such as automobiles, electronic goods, etc. to implement the best strategies to increase their profit.

scholarly journals Inter-organizational contract control of advertising strategies in the supply chain

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Yafei Zu
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Dynamic Effect ◽  
Sensitivity Analyses ◽  
Pricing Strategies ◽  
Stackelberg Differential Game ◽  
Contract Choice ◽  
Advertising Effort ◽  
Advertising Strategies ◽  
Contract Selection

<p style='text-indent:20px;'>Advertising has a crucial impact on a product's goodwill. To further improve a product's goodwill and make more profit, member firms in the supply chain use various contracts to coordinate the channel. Considering the dynamic effect of advertising, this paper studies a two-level supply chain consisting of one manufacturer and one retailer. The two members focus on maximizing their profits through advertising and pricing strategies under two types of contracts: the wholesale price contract and the consignment contract. The Stackelberg differential game is introduced, and the optimal advertising effort, wholesale and retail pricing strategies in the two situations are studied. Numerical examples and sensitivity analyses are conducted to explore the models further. The results show that the retailer's revenue proportion and the product's goodwill according to consumers significantly affect the strategies and the contract choice of the partner firms in the supply chain. A proportion of too high or too low revenue may lead to a contract selection conflict between the two partner firms. However, when consumers care more about the product's goodwill, this contract selection conflict can be weakened.</p>

Coordinating Vulnerable Supply Chains with Option Contracts

2021 ◽  
pp. 2050053
Author(s):  
Zhongyi Liu ◽  
Shengya Hua ◽  
Guanying Wang
Keyword(s):  
Supply Chain ◽  
Risk Aversion ◽  
Value At Risk ◽  
Numerical Study ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Conditional Value At Risk ◽  
Option Contract ◽  
Risk Neutral ◽  
Disruption Risk

We investigate vulnerable supply chain coordination with an option contract in the presence of supply chain disruption risk caused by external and internal disturbances. The supply chain consists of a single risk-neutral supplier and a risk-averse retailer. We characterize the retailer’s order quantity decision under the Conditional Value-at-Risk (CVaR) criterion and the supplier’s production decision. The results show that facing disruption risk and risk-aversion, both the retailer and the supplier would be more prudent to order and produce less than the risk-neutral scenario, inducing damage to the supply chain performance. The number of options purchased is decreasing in disruption risk and the risk-aversion of the retailer. The supplier will increase production as the disruption risk decreases or the shortage penalty increases. When the supplier does not know the risk-aversion of the retailer, the former will produce more and bear a higher overstock risk. We also investigate conditions that facilitate vulnerable supply chain coordination and find that the existence of risk-aversion and disruption risk restrict the option price and exercise price to lower price levels. Finally, we compare the option contract with wholesale price contract from the supplier’s and retailer’s perspectives through a numerical study.

COORDINATING TWO-ECHELON SUPPLY CHAINS UNDER STOCK AND PRICE DEPENDENT DEMAND RATE

2013 ◽  
Vol 30 (02) ◽  
pp. 1250051 ◽  
Author(s):  
SHIBAJI PANDA
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Integrated System ◽  
Cost Structure ◽  
Inventory Level ◽  
Selling Price ◽  
Implicit Information ◽  
Demand Rate

Coordination is imperative for improving supply chain performance. In this paper, we focus on coordination of a two-echelon supply chain consisting of a manufacturer and a price-setting retailer, which operates for a single product. Customer demand is influenced by retailer's instantaneous inventory level and selling price. The integrated system and the decentralized scenario, by considering manufacturer as the Stackelberg leader, are discussed. It is shown that conventional revenue sharing contract cannot coordinate the system but revenue and cost sharing (RCS) contract is able to coordinate the system and leads to a win–win outcome. The key contract parameters — cost sharing fraction, along with revenue sharing fraction and wholesale price are determined under explicit and implicit information of retailer's cost structure. Finally, it is shown that range of cost sharing fraction that leads to win–win situation is independent of the format of cost structure of retailer. Numerical examples are provided to illustrate the development of the model.

Equal Pricing Strategies in a Dual Channel Supply Chain

2013 ◽  
pp. 230-249 ◽  
Author(s):  
Ue-Pyng Wen ◽  
Yun-Chu Chen ◽  
Kam-Hong Cheung
Keyword(s):  
Supply Chain ◽  
Service Quality ◽  
Wholesale Price ◽  
Retail Price ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Cooperative Strategy ◽  
Dual Channel ◽  
Dual Channel Supply Chain

In this article, equal pricing strategies are studied in a dual channel supply chain where a manufacturer sells to a retailer as well as to consumers through a direct channel according to the assumption that the manufacturer commits setting the same retail price as the traditional channel to reduce the channel’s conflict. The authors first analyze the effect of different pricing strategies on the retail price, wholesale price and profits. The cooperative strategy is also studied to see how it benefits both parties in the dual channel supply chain. Finally, through a numerical example, it is demonstrated that providing convenience of the direct channel is important for the manufacturer and service is a distinctive advantage for the retailer. Furthermore, the paper shows that if the service quality has a significant effect on the direct channel, then the manufacturer tends to abandon commitment of equal pricing strategy.

scholarly journals Pricing Decisions of a Supply Chain with Multichannel Retailer under Fairness Concerns

2019 ◽  
Vol 2019 ◽  
pp. 1-22 ◽  
Author(s):  
Xueping Zhen ◽  
Dan Shi ◽  
Sang-Bing Tsai ◽  
Wei Wang
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Rapid Development ◽  
Wholesale Price ◽  
Selling Price ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Fairness Concern ◽  
Dual Channel Supply Chain ◽  
Offline Channels

With the rapid development of the Internet, many traditional retailers have built their online channels. The fairness concern may play an important role in a dual-channel supply chain with a multichannel retailer. This paper establishes a Stackelberg game model in which a manufacturer produces and sells products through direct online channel and a retailer sells directly to consumers through online and offline channels. The manufacturer’s fairness concern (advantageous inequity) and the retailer’s fairness concern (disadvantageous inequity) are considered. Four scenarios are investigated: no fairness concern (NF), the retailer fairness concern (RF), the manufacturer fairness concern (MF), and both the manufacturer and the retailer fairness concern (MRF). The theoretical analysis shows that if the manufacturer’s advantageous inequity concern is low, the profit of the whole supply chain in the MRF scenario is the greatest. Otherwise, the supply chain profit in the NF or RF scenario is the greatest. That is, the manufacturer’s and the retailer’s fairness concern may increase the profit of the supply chain. This study also finds that the manufacturer’s advantageous inequity concern can increase the social welfare. The retailer should not concern about fairness if the manufacturer has high fairness concern. Besides, this paper shows that the manufacturer’s selling price cannot be affected by the fairness concern. Adjusting the wholesale price is the only thing that the manufacturer can do to reduce disadvantageous or advantageous inequity. In the RF scenario, the role of the retailer’s disadvantageous inequity concern is to reallocate the supply chain profit. Our findings provide some managerial insights on the pricing decision when the multichannel retailer and the manufacturer consider the fairness.

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