scholarly journals Implications of Advertising Lag on the Dynamic Optimal Decisions in an O2O Supply Chain

2021 ◽  
Vol 2021 ◽  
pp. 1-28
Author(s):  
Xiuxian Li ◽  
Ling Li ◽  
Xinyu Wang ◽  
Shuhua Zhang
Keyword(s):  
Supply Chain ◽  
Negative Impact ◽  
Wholesale Price ◽  
Quality Level ◽  
Supply Chain Performance ◽  
Quality Improvements ◽  
Effort Level ◽  
Advertising Effort ◽  
Lag Effect ◽  
Reference Quality

The advertising lag effect and the reference quality effect are intrinsic properties of the market that influence supply chain performance. In this paper, we use the differential game theory considering the above two effects under an O2O (online to offline) environment. We investigate how these two effects impact supply chain performance. By the extended maximum principle, the optimal analytical solutions of the decision variables in two different game scenarios are obtained, i.e., with and without advertising cooperation. We conclude that the optimal wholesale price (advertising effort level, product quality level, and retail price) increases or decreases exponentially to its steady state, which depends on whether the initial goodwill is lower than the static goodwill or not. The analysis shows that the advertising lag effect has a negative impact on the supply chain, while the reference quality effect is positive. The vertical advertising cooperation strategy is effective in facilitating the channel performance. From a comparison analysis, we obtain that the manufacturer concentrates more effort on quality improvement if the advertising lag time is larger or if consumers are more sensitive to quality, and the manufacturer pays more attention to advertising relative to quality improvements with a higher advertising cost sharing ratio.

scholarly journals Research on the Dynamics Game Model in a Green Supply Chain: Government Subsidy Strategies under the Retailer’s Selling Effort Level

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-15 ◽  
Author(s):  
Xigang Yuan ◽  
Xiaoqing Zhang ◽  
Dalin Zhang
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Dynamic Game ◽  
Retail Price ◽  
Green Supply Chain ◽  
Government Subsidy ◽  
Principal Agent Theory ◽  
Effort Level ◽  
The Impact ◽  
Selling Effort

Based on dynamic game theory and the principal-agent theory, this paper examined different government subsidy strategies in green supply chain management. Assuming that the retailer’s level of selling effort involved asymmetric information, this study analyzed the impact of different government subsidy strategies on the wholesale price, the product greenness level, retail price, the level of selling effort, the manufacturer’s profit, and the retailer’s profit. The results showed that (1) the government’s subsidy strategy can effectively not only improve the product greenness level but also increase the profits of an enterprise in a green supply chain, which helps the retailer to enhance their selling effort; (2) regardless of whether the retailer’s level of selling effort was high or low, as the government’s subsidy coefficient increased, the wholesale price continued to decrease, and the product greenness level and retailer’s selling effort level also increased.

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>

scholarly journals Research on the supply chain model based on the differentiation of green agricultural products

2018 ◽  
Vol 232 ◽  
pp. 02012
Author(s):  
Hui Su ◽  
Yuquan Cui ◽  
Bingjie Liu
Keyword(s):  
Supply Chain ◽  
Utility Function ◽  
Stackelberg Game ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Agricultural Products ◽  
Coordination Mechanism ◽  
Optimal Decision ◽  
Quality Level ◽  
Chain Model

This paper studies the supply chain of green agricultural products with "agricultural super docking" mode based on the different management. The "agricultural super docking" mode is a direct connection between supermarkets and farmers (or cooperatives), what the supermarket needs and what the farmers produce. The green degree is used to indicate the quality level of health, safety and nutrition of agricultural products. The greater the green degree is, the better the quality of agricultural products is. In order to meet the needs of all consumers, the supermarket decide to carry out different management. That is to say, supermarket sells ordinary agricultural products and green agricultural products at the same time. This paper gives the consumer utility function for ordinary agricultural products and green agricultural products separately. We analyze the consumers’ choice behaviors based on the consumer utility function .We discuss the optimal decision of supermarket choosing one farmer and supermarket choosing two farmers based on Stackelberg game. It can be seen from the comparison that supermarket can get more profits when it chooses two farmer to order separately. Finally, a "wholesale price + ordering subsidy" coordination mechanism is proposed to realize supply chain coordination. .

scholarly journals Supply Chain Performance with Target-Oriented Firms

2021 ◽  
Author(s):  
Lucy Gongtao Chen ◽  
Qinshen Tang
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Strong Support ◽  
Problem Definition ◽  
Expected Profit ◽  
Trading Partner ◽  
Supply Chain Performance ◽  
Decentralized System ◽  
Outside Option ◽  
Risk Neutral

Problem definition: We study a supply chain in which a supplier sets the wholesale price and a retailer responds with an order quantity. Both of the two firms can be either risk-neutral—maximizing the expected profit—or target-oriented, which is to maximize her or his ability to reach a target profit. Academic/practical relevance: Our work not only sheds light on the benefit/loss of trading with target-oriented decision makers but also, adds new knowledge to the supply chain coordination literature. Methodology: We provide strong support for firms’ target-based preference and the linear target formation model through a survey as well as analyzing company data. With the firms’ target-oriented behavior evaluated by a CVaR-satisficing measure, we apply a game theoretical framework to investigate how the target-based preference affects supply chain performance. Results: A firm, be it a supplier or a retailer, is always hurt by its target-based preference but can benefit from its trading partner’s target-based preference. A risk-neutral supplier, for example, can sometimes reap the whole supply chain’s profit if the retailer is target-oriented, and a target-oriented supplier always performs better with a target-oriented retailer than a risk-neutral one. Furthermore, a target-oriented retailer and/or supplier can help alleviate the double-marginalization effect and with a specific target, can help the supply chain achieve the same efficiency level as in a risk-neutral centralized system, with just a wholesale price contract. Another important finding is that if both firms are target-oriented, then the supply chain can have a higher expected profit under a decentralized system than a centralized one. This contrasts with the case when both firms are risk-neutral. We also investigate the role of outside option and retailer-type misidentification and find that both can alleviate the retailer’s disadvantage of being target-oriented. Managerial implications: (i) The target-based preference can be exploited by the trading partner, and hence, a firm should adopt the target-oriented decision criterion with caution. (ii) A target-oriented retailer can explore strategies such as revealing his outside option or hiding his target-based preference in order to be less manipulated. (iii) Whether a firm (and the supply chain) can benefit from its trading partner’s target-based preference often depends on how ambitious the trading partner (and the firm itself if it is target-oriented) sets the target. (iv) Target-based preference of one or both firms can help the supply chain reach the first-best efficiency. (v) When both firms are target-oriented, decentralization can be preferred to centralization.

scholarly journals Two-level promotion and ordering policy in a supply chain

2019 ◽  
Author(s):  
Yu-Chung Tsao ◽  
Hui-Ling Fan ◽  
Lu-Wen Liao ◽  
Thuy-Linh Vu ◽  
Pei-Ling Lee
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Sales Promotion ◽  
Order Quantity ◽  
Promotion Policy ◽  
Promotional Effort ◽  
Effort Level ◽  
Promotion Policies ◽  
Trade Promotion ◽  
Level Order

This research develops two models to consider retailer sales promotion and manufacturer trade promotion under demand uncertainty. The objective of the first model is to determine the retailer’s optimal promotional effort and order quantity while maximizing the retailer’s profit under exogenous trade promotion. The second model extends the first to consider the manufacturer’s endogenous trade promotion decisions. For these models, three different trade promotion policies (off-invoice, scan-back, unsold-discount) have been compared to identify the policy that can increase the manufacturer’s and the retailer’s profits. For the model with exogenous trade promotion, the retailer’s promotional effort level, order quantity, and profit are highest under the off-invoice trade promotion policy. With respect to the manufacturer’s endogenous trade promotion decisions, the retailer’s promotional effort level, order quantity, and profit, and the manufacturer’s profit are higher under the off-invoice policy than under the scan-backs policy. When comparing the three different trade promotion policies, we also find that the wholesale price is a key factor that influences a manufacturer’s profit. Our research sheds light on the importance of trade promotion policy in supply chain management.

Contract Unobservability and Downstream Competition

2020 ◽  
Author(s):  
Xi Li ◽  
Qian Liu
Keyword(s):  
Supply Chain ◽  
Multiple Equilibria ◽  
Alternative Explanation ◽  
Common Knowledge ◽  
Wholesale Price ◽  
Problem Definition ◽  
Supply Chain Performance ◽  
Supply Chain Contracts ◽  
Managerial Implications ◽  
The Right

Problem definition: In this paper, we consider a supply chain with a manufacturer and two retailers who are contracted through wholesale prices or two-part tariffs. We depart from the existing literature by assuming that contract terms between the manufacturer and a retailer are not observed by the rival retailer. Academic/practical relevance: Although the existing literature typically assumes that they are common knowledge in the market, contract terms may not be observed by rival retailers under certain circumstances. This paper contributes to the literature by studying the effect of contract unobservability on supply chain performance. Methodology: We use game-theoretical methods to find the equilibrium. When there are multiple equilibria, we adopt passive beliefs as an equilibrium-refinement criterion. Results: We find that certain established results regarding observable supply chain contracts do not always apply when those contracts become unobservable to competing retailers. In particular, compared with when using two-part tariff contracts, the manufacturer may benefit from using wholesale-price contracts when contract terms are unobservable. Moreover, the total industry profit may increase under wholesale-price contracts. Managerial implications: Our results offer an alternative explanation for the popularity of wholesale-price contracts and suggest that members of the supply chain must take unobservability into account when selecting the right contracts. We also offer new insights into buyback contracts and downstream mergers under unobservable contracts.

scholarly journals Contracting Fashion Products Supply Chains When Demand Is Dependent on Price and Sales Effort

2015 ◽  
Vol 2015 ◽  
pp. 1-7 ◽  
Author(s):  
Ying Wei ◽  
Liyang Xiong
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Two Stage ◽  
Effort Level ◽  
Optimal Decisions ◽  
Fashion Products ◽  
Revenue Sharing Contract ◽  
Investment Level

This paper investigates optimal decisions in a two-stage fashion product supply chain under two specified contracts: revenue-sharing contract and wholesale price contract, where demand is dependent on retailing price and sales effort level. Optimal decisions and related profits are analyzed and further compared among the cases where the effort investment fee is determined and undertaken either by the retailer or the manufacturer. Results reveal that if the retailer determines the effort investment level, she would be better off under the wholesale price contract and would invest more effort. However, if the manufacturer determines the effort level, he prefers to the revenue-sharing contract most likely if both parties agree on consignment.

Main difficulties hindering supply chain performance: an exploratory analysis at Uruguayan SMEs

2015 ◽  
Vol 20 (1) ◽  
pp. 11-23 ◽  
Author(s):  
Martin Tanco ◽  
Daniel Jurburg ◽  
Matias Escuder
Keyword(s):  
Supply Chain ◽  
Design Methodology ◽  
Negative Impact ◽  
Exploratory Analysis ◽  
Government Policies ◽  
Supply Chain Performance ◽  
Content Type ◽  
Exploratory Survey ◽  
Practical Implications ◽  
Exhaustive List

Purpose – The purpose of this article is to create a list of supply chain (SC)-related difficulties based on the existing SC literature. It also presents an exploratory survey concerning the main difficulties which Uruguayan managers consider to have the most negative impact on their SCs. Design/methodology/approach – The survey was carried out within small- and medium-sized manufacturing and retailing companies in Uruguay, yielding 99 valid responses. A statistical analysis of the survey is introduced including a ranking of the difficulties and a grouping of those using factorial analysis. A difficulty, as understood throughout this paper, is any factor that significantly impacts, or has impacted in recent years, the performance of SCs. Findings – Eighteen main difficulties hindering SC performance were identified. Moreover, an exploratory analysis of the survey showed that the main concerns to SC managers are related to workforce availability and government policies. Practical implications – Difficulties encountered by SCs would not only be of interest to scholars but also to the managers who face the challenge of the day-to-day managing of a SC. Once the difficulties over the SCs are identified, strategies can be designed and implemented to attain desired benefits. Today’s intense competition requires firms to be more aware of their SC and to achieve excellence in many areas, especially at small- and medium-sized enterprises. Originality/value – There is a growing body of literature concerning isolated issues that SCs have to face; however, an exhaustive list of difficulties is hardly available. Moreover, first-hand information of Uruguayan managers was ascertained to rank each one using a Likert scale.

scholarly journals Supply Chain Management Practices and Supply Chain Performance in the Manufacturing Industries of Bangladesh

2021 ◽  
Vol 2 (1) ◽  
pp. 1-26
Author(s):  
Trisha Nag ◽  
Dr. Shameema Ferdausy
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Information Sharing ◽  
Information Quality ◽  
Management Practices ◽  
Sampling Technique ◽  
Customer Relationship ◽  
Quality Level ◽  
Supply Chain Performance ◽  
Chain Management

Purpose: The paper aims to examine the association between supply chain management practices (SCMP) and supply chain performance (SCP) in the manufacturing industries of Bangladesh. SCMP was classified as strategic supplier partnership (SSP), customer relationship (CR), information sharing level (IS), information quality level (IQ), and postponement (POS). Methods: It is a quantitative research based on a survey questionnaire. Supply chain management practices were measured by items adapted from Li, Nathan, and Rao (2006), while supply chain performance was measured by using key supply chain performance indicators suggested by Ambe (2013). Using convenience sampling technique, data were collected from 203 executives involved in supply chain activities working in different manufacturing organizations in two major cities of Bangladesh (Dhaka and Chittagong). Descriptive statistics, bivariate correlation, and regression analysis were used to analyze the data. Results: Results demonstrated a positive correlation between supply chain management practices and supply chain performance (r=0.67**). However, strategic supplier partnership, customer relationship, and postponement are more strongly related to improving supply chain performance than information sharing level and information quality level. Implications: A significant implication of the study is that manufacturing organizations should develop supply chain management capabilities to improve supply chain performance and they should begin with developing their level of information sharing and level of information quality. Limitations: The use of the convenience sampling technique limits the generalizability of the findings. The small sample size (n=203) also warrant caution in interpreting the results. 

scholarly journals Pricing and quality decisions in a supply chain with consumers' privacy concern

2022 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
You Zhao ◽  
Zibin Cui ◽  
Jianxin Chen ◽  
Rui Hou
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Personal Information ◽  
Wholesale Price ◽  
Consumer Surplus ◽  
Information Loss ◽  
Quality Level ◽  
Selling Price ◽  
Privacy Concern ◽  
Price Increases

<p style='text-indent:20px;'>This study considers a supply chain consists of one manufacturer produces a product with a quality level and sells it through one retailer. A stylized model is developed to investigate the impacts of consumers' privacy concerns on pricing, quality decisions, and profitability through the relationship between product quality and personal information. When consumers' privacy concern is considered, the product quality level, the wholesale price, the payoffs of the manufacturer and retailer, and consumer surplus decrease with the personal information loss, whereas the selling price increases if this loss is low. Our results also show that the retailer prefers to charge a high selling price if the information benefit and the personal information loss are low, or the information benefit is relatively high. Moreover, a "win-win-win" outcome can be achieved among the manufacturer, retailer, and consumers if the personal information loss is sufficiently low. In the case of quality-differentiated products, however, although the manufacturer improves the product quality level, the wholesale prices are increased if the information benefit and the personal information loss are low, or the information benefit is high.</p>

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