scholarly journals Joint Dynamic Innovation and Pricing Decisions for the ODM Supply Chain

2021 ◽  
Vol 2021 ◽  
pp. 1-16
Author(s):  
Xin Wang
Keyword(s):  
Supply Chain ◽  
Optimal Strategies ◽  
Nash Bargaining ◽  
Quality Level ◽  
Selling Price ◽  
Market Demand ◽  
Original Design ◽  
Price Relationship ◽  
Design Innovation ◽  
The Impact

More and more companies in the supply chain choose the cooperation mode of original design and manufacturing (ODM). This paper investigates the problems of the joint design innovation and pricing strategies for the ODM supply chain by considering the impact of the dynamic of quality level on market demand. First, applying differential game theory, optimal strategies for design innovation, and pricing under decentralized and centralized scenarios are obtained. At the same time, the optimal strategies under the two decision-making scenarios are compared and analyzed. Second, a two-part tariff contract is introduced to coordinate the decentralized ODM supply chain. Finally, we further establish a Nash bargaining model among members of the supply chain. It is found that, in a centralized system, the design innovation efforts, product quality levels, and supply chain profits in the decentralized decision scenario are lower than that in the centralized decision scenario, but the selling price relationship in both scenarios depends on the parameters of the operating system.

Implications of Price Matching in Supply Chain Negotiation

2021 ◽  
Author(s):  
Weixin Shang ◽  
Gangshu (George) Cai
Keyword(s):  
Supply Chain ◽  
Social Welfare ◽  
Wholesale Price ◽  
Consumer Welfare ◽  
Problem Definition ◽  
Nash Bargaining ◽  
Price Matching ◽  
The Impact ◽  
Multiple Buyers ◽  
Wholesale Pricing

Problem definition: Few papers have explored the impact of price matching negotiation (PM), in which a channel matches its price with the resulting wholesale price bargained by another channel, on firms’ performances, consumer welfare, and social welfare, with and without supply chain coordination. Academic/practical relevance: Negotiation has been widely seen in determining both uniform and discriminatory wholesale prices, which affect outcomes of competitive supply chain practices. Methodology: To characterize the PM mechanism, we use game theory and Nash bargaining theory to compare PM with simultaneous negotiation (SN) through a common-seller two-buyer differentiated Bertrand competition model. Results: Our analysis reveals that PM can benefit the seller but hurt all buyers, which is at odds with some fair wholesale pricing clauses intending to protect buyers. Under coordination with side payments, however, all firms can conditionally benefit more from PM than from SN. Despite firms’ gains, PM leads to less consumer utility and social welfare compared with SN, unless the second buyer in PM is considerably less powerful than the first buyer. Coordination further worsens PM’s negative impact on consumer utility and social welfare. Moreover, the existence of a spot market can increase the wholesale price in PM, hurting buyers, consumers, and society. Furthermore, the qualitative results about PM remain robust under an alternative disagreement point for PM, multiple buyers, and other extensions. Managerial implications: This paper delivers insights on when price matching in supply chain wholesale price negotiation can benefit a seller, buyers, consumers, and society in a variety of scenarios. It advocates how managers can use PM to their own advantages and provides rationale to decision makers for policy regulations regarding wholesale pricing.

Supply chain network design based on cost of quality and quality level analysis

2019 ◽  
Vol 31 (3) ◽  
pp. 467-490 ◽  
Author(s):  
Asama Alglawe ◽  
Andrea Schiffauerova ◽  
Onur Kuzgunkaya ◽  
Itad Shiboub
Keyword(s):  
Supply Chain ◽  
Network Design ◽  
Linear Optimization ◽  
Transportation Costs ◽  
Quality Level ◽  
Supply Chain Network Design ◽  
Supply Chain Network ◽  
Content Type ◽  
Cost Of Quality ◽  
The Impact

Purpose The purpose of this paper is to explore the impact of the cost of quality (COQ) expenditure allocations on a capacitated supply chain (SC) network. Design/methodology/approach This paper proposes a non-linear optimization model which integrates the opportunity cost (OC) (i.e. customer satisfaction cost), into the COQ with consideration of the QL in the supply chain network design decisions. In addition, it examines the effect of considering an investment at each SC echelon to ensure the best overall QL. A numerical example is presented to illustrate the behavior of the model. Findings The results show how the QL, COQ and facility location decisions change when incorporating the OC, investments and transportation costs into the SC model. Originality/value The novelty of this paper is that it considers the effect of OC, investment at each echelon and transportation costs on SC design by minimizing the overall spending on the COQ. These issues have not been explored, and for that reason, this paper contributes to the understanding of the critical factors that optimizes the SC COQ.

System dynamics-based model for supply chain organizational collaboration

2020 ◽  
pp. 1-11
Author(s):  
Wenhan Xu ◽  
Hongguang Bo ◽  
Yinglian Chen
Keyword(s):  
Supply Chain ◽  
Standard Deviation ◽  
System Dynamics ◽  
Dispersion Coefficient ◽  
Current Model ◽  
Distribution Center ◽  
Market Demand ◽  
Average Value ◽  
Collaboration Model ◽  
The Impact

In order to explore the impact of the system-driven supply chain, collaborative operations, and organizational characteristics on supply chain operational performance, this paper based on the system dynamics method to simulate the established information collaborative supply chain model, analyze market demand data, inventory before and after the supply chain sharing The changes of inventory fluctuations in the supply chain and related calculations are compared with the simulation results under the current model to prove the importance of implementing information collaboration in the supply chain of a large retailer-led supply chain. The research in this paper shows that with the supply chain information collaboration model, the average value of the manufacturer’s order quantity has dropped by 30.4%. Affected by this, the dispersion coefficient has also dropped from 0.76 to 0.6, and the average number of orders in the distribution center has also dropped by 12.2%; With the supply chain information synergy model, the average value of the raw material inventory of manufacturers has dropped significantly, from 3400 in the current model to 2500 in the information synergy model, a decrease of 27%, the standard deviation has also decreased by 57%, and the dispersion coefficient has dropped from 0.98 to 0.50; The standard deviation rate of the inventory of the distribution center is 30%; from the perspective of the overall retail supply chain, the inventory has fallen by 14%, the standard deviation has fallen by 34%, and the dispersion coefficient has dropped from 0.76 in the current model to the information collaboration model. 0.6, it can be seen that the mode of supply chain information coordination has a great effect on reducing supply chain costs and improving supply chain efficiency.

scholarly journals Supply Chain Decision-Making and Coordination considering Anticipated Regret under Price Discount

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-14
Author(s):  
Jie Jian ◽  
Huipeng Li ◽  
Nian Zhang ◽  
Jiafu Su
Keyword(s):  
Supply Chain ◽  
Sensitivity Coefficient ◽  
Pricing Strategy ◽  
Market Demand ◽  
Anticipated Regret ◽  
Consumer Heterogeneity ◽  
Price Discount ◽  
Demand Functions ◽  
Homogeneous Product ◽  
The Impact

The increasing homogeneous product market has made more competition among companies to focus on improving customers’ experience. In order to get more competitive advantages, companies often launch discount products to attract consumers. However, stimulated by discount products, the perception of anticipated regret is becoming stronger, which is an inevitable issue in front of companies with price discount strategy. Considering the impact of anticipated regret for discount products, this paper quantitatively describes the utility functions and deduces the demand functions of original price products and discount products. The theoretical analysis and numerical simulation are used to analyze centralized and decentralized models of supply chain for discount products. On its basis, the revenue-sharing contract is designed to optimize the profits of supply chain. This paper finds that the price of products increases first and then decreases with the increase of regret sensitivity coefficient and consumer heterogeneity. When the regret sensitivity coefficient and consumer heterogeneity are lower, companies in the supply chain can adopt the “skimming pricing” strategy in order to obtain more profits. When the regret sensitivity coefficient and consumer heterogeneity increase, companies in the supply chain can adopt “penetrating pricing” strategies to stimulate market demand. For high regret consumers, manufacturers can adopt a “commitment advertising” strategy to promise price and quality, and retailers can adopt a “prestige pricing” strategy to reduce consumer perception of regret. In response to products with higher differences in consumer acceptance, manufacturers can adopt a “differentiated customization” strategy to meet different types of consumer demand and retailers can adopt a “differential pricing” strategy for precise marketing.

scholarly journals Supply Chain Investment in Carbon Emission-Reducing Technology Based on Stochasticity and Low-Carbon Preferences

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-18
Author(s):  
Shan Yu ◽  
Qiang Hou
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Equilibrium Strategy ◽  
Market Demand ◽  
Low Carbon ◽  
Carbon Emission Reduction ◽  
Dynamic Perspective ◽  
The Cost ◽  
The Impact

Due to excessive greenhouse gas emissions, carbon emission-reducing measures are urgently needed. Important emission-reduction measures mainly include carbon trading and low-carbon cost subsidies. Comprehensive consideration of these two policies is a research hotspot in the field of low-carbon technology investment. Based on this background, this paper considers the impact of consumer low-carbon preferences on market demand and the impact of uncertainty in carbon emission-reduction behaviour. We construct a stochastic differential game model with upstream and downstream enterprises based on cost-sharing coordination under a cost subsidy. From a dynamic perspective, this paper researches the optimal equilibrium strategy and evolution characteristics of the joint emission-reduction mechanism in a supply chain. This paper discusses the sensitivity of the parameters and uses numerical simulation to verify the impact of each parameter on the emission-reduction decision-making activities of stakeholders after introducing the cost subsidy. The results show that a cost subsidy policy can promote carbon emission-reduction investment and supply chain profit. Thus, it is important to strengthen technical cooperation and exchange among enterprises.

scholarly journals Green Supply Chain Management with Nash Bargaining Loss-Averse Reference Dependence

Mathematics ◽  
2021 ◽  
Vol 9 (24) ◽  
pp. 3154
Author(s):  
Wentao Yi ◽  
Zhongwei Feng ◽  
Chunqiao Tan ◽  
Yuzhong Yang
Keyword(s):  
Supply Chain ◽  
Loss Aversion ◽  
Reference Point ◽  
Wholesale Price ◽  
Optimal Strategies ◽  
Retail Price ◽  
Nash Bargaining ◽  
Green Supply Chain ◽  
Bargaining Solution ◽  
Efficiency Coefficient

This paper investigates a two-echelon green supply chain (GSC) with a single loss-averse manufacturer and a single loss-averse retailer. Since the Nash bargaining solution exactly characterizes endogenous power and the contribution of the GSC members, it is introduced as the loss-averse reference point for the GSC members. Based on this, a decision model of the two-echelon GSC with loss aversion is formulated. The optimal strategies of price and product green degree are derived in four scenarios: (a) the centralized decision scenario with rational GSC members, namely the CD scenario; (b) the decentralized decision scenario with rational GSC members, namely the DD scenario; (c) the decentralized decision scenario with the GSC members loss-averse, where the manufacturer’s share is below its own loss-averse reference point, namely the DD(∆m ≥ πm) scenario; (d) the decentralized decision scenario with the GSC members loss-averse, where the retailer’s share is below its own loss-averse reference point, namely the DD(∆r ≥ πr) scenario. Then, a comparative analysis of the optimal strategies and profits in these four scenarios is conducted, and the impacts of loss aversion and green efficiency coefficient of products (GECP) on the GSC are also performed. The results show that (i) GECP has a critical influence on the retail price and the wholesale price; (ii) the GSC with loss aversion provide green products with the lowest green degree; (iii) the retail price, the wholesale price and product green degree are decreasing monotonically with the loss aversion level of the GSC member without incurring loss; (iv) furthermore, the effect of the loss aversion level of the GSC member with incurring loss on the optimal strategies is related to GECP and the gap between the GSC members’ loss aversion levels.

Contract coordination of new fresh produce three-layer supply chain

2019 ◽  
Vol 119 (1) ◽  
pp. 148-169 ◽  
Author(s):  
Zilong Song ◽  
Shiwei He
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Fresh Produce ◽  
Third Party ◽  
Coordination Mechanisms ◽  
Agricultural Product ◽  
Target Market ◽  
Selling Price ◽  
Market Demand ◽  
Content Type

PurposeThere are particularly high fresh agricultural product (FAP) loss rates in actual supply chain operation and the development of FAPs e-commerce is hindered to some extent. The purpose of this paper is to achieve the coordination of three-layer FAP supply chain and maximize profit through the contracts among the supply chain members.Design/methodology/approachA three-layer FAP supply chain that consists of a fresh produce e-commerce enterprise, third-party logistics service provider (TPLSP) and community convenience store under e-commerce environment is considered. New game models are developed and optimal decisions in centralized and decentralized channel are characterized. Different contract coordination mechanisms are designed to improve the supply chain performance. Finally, computational studies are conducted.FindingsThe decentralized supply chain cannot be coordinated by a freshness-keeping cost-sharing contract, and it can be coordinated by a freshness-keeping cost-sharing and revenue-sharing contract. The optimal unit online selling price, unit logistics distribution price, fresh-keeping effort and unit self-collection service price can all be achieved.Practical implicationsThe paper provides a practical guideline to managers in fresh produce industry in terms of how to cooperate with other supply chain members so as to maximize total profit and achieve Pareto improvement while also supply the freshest and safest produce to the target market under e-commerce environment.Originality/valueFew studies have explored the coordination of three-layer FAP supply chain under e-commerce environment with TPLSP and community convenience store’s participation in decisions, especially considering that the market demand for FAPs is affected by freshness and unit online selling price. In this paper, all these scenarios are taken into account and corresponding mathematical models are developed. In particular, different contract coordination mechanisms are designed and examined simultaneously.

scholarly journals Optimal strategies of a dual-channel green supply chain with recycling under retailer promotional effort

2021 ◽  
Author(s):  
Brojeswar Pal ◽  
Amit Sarkar
Keyword(s):  
Supply Chain ◽  
Raw Materials ◽  
Optimal Strategies ◽  
Stackelberg Games ◽  
Market Demand ◽  
Green Innovation ◽  
Nash Game ◽  
Promotional Effort ◽  
Dual Channel ◽  
Decision Variables

Due to the hugely populated world, recycling of the used products has become the most significant perspective in e-commerce. The scientists have been exploring how increases the degree of recyclability and the green innovation level. This paper considers a supply chain with a manufacturer, a retailer, a supplier, and a collector. The manufacturer can increase or decrease the level of green innovation by changing the quality of raw materials. He sells them through his direct channel as well as the retailer's traditional channel. The retailer enforces the strategy promotional effort for enlarging his market demand. After Formulating the problem, the strategies in collector-led, supplier-led, collector-supplier Nash, and collector-supplier-retailer Nash game are studied under manufacturer Stackelberg games along with the centralized policy. The parameters' sensitivity has been analyzed to the profit and decision variables and then draw significant managerial insights. The model declares the optimal strategies for each player as well as the chain. It is achieved that the higher level of green innovation and promotional effort always increases all the profits. The optimal pricing decisions be lowest under the Collector-Supplier Nash game.

scholarly journals Effect of Optimal Subsidy Rate and Strategic Behaviour of Supply Chain Members under Competition on Green Product Retailing

2021 ◽  
Vol 2021 ◽  
pp. 1-23
Author(s):  
Subrata Saha ◽  
Izabela Nielsen ◽  
Shib Sankar Sana
Keyword(s):  
Supply Chain ◽  
Vertical Integration ◽  
Government Expenditure ◽  
Green Supply Chain ◽  
Quality Level ◽  
Subsidy Rate ◽  
Strategic Behaviour ◽  
Social Welfare Maximization ◽  
The Government ◽  
The Impact

This paper investigates the impact of the subsidy and horizontal strategic cooperation on a green supply chain where two competing manufacturers distribute substitutable green products through exclusive retailers. Models are formulated in three-stage game structures in five different scenarios, where the government organization determines optimal subsidy by pursuing social welfare maximization. Both manufacturers invest in improving green quality levels of products. The study aims to explore the advantage of vertical integration and strategic collusion from the perspective of green supply chain practice in the presence of subsidy. The key contributions from the present study indicate that under competition, members of both supply chains are able to receive higher profits through horizontal collusion, but green quality levels of the product remain suboptimal. If upstream manufacturers cooperate, government subsidy does not necessarily improve product quality level, and the amount of government expenditure increased substantially. By comparing outcomes where members are vertically integrated with scenarios where members make strategic collusion, we found that the former might outperform by later. Cross-price sensitivity appears as a significant parameter affecting supply chain members’ performance and the amount of government expenditure. Cooperation between members at the horizontal level is a more robust strategic measure than vertical integration if consumers are highly price-sensitive.

scholarly journals The Impact of Cost Information Sharing on Procurement Contract Design

2020 ◽  
Vol 4 (2) ◽  
pp. 34
Author(s):  
Dong Chao ◽  
Yankang Chen
Keyword(s):  
Private Information ◽  
Demand Uncertainty ◽  
Original Problem ◽  
Contract Design ◽  
Model Parameters ◽  
Selling Price ◽  
Optimal Contract ◽  
Market Demand ◽  
Cost Information ◽  
The Impact

In this paper, we provides contract design mechanisms and analysis for manufacturers to manage decentralized supply chain. Suppose the manufacturer’s final product consists of components, each produced by a different supplier, and the manufacturer first purchases components from suppliers, then assembles them into final product and meet demands aftermarket realization. While supply chain’s internal cooperation always benefits both, suppliers are often reluctant to proactively share their own production cost structure, otherwise manufacturers may depress purchase prices, which may reduce supplier’s profit. Manufacturers on the other hand, prefers to be informed of true cost information in order to gain greater revenues. We takes manufacturer’s perspective and design the optimal contract menu for suppliers, both to enable suppliers to disclose private cost information and to maximize the benefits. We start by modeling the original problem and find that the original problem is a complex multidimensional optimization problem. We then examine the nature of the original problem solving and devise the solution algorithm to arrive at the optimal contract menu. This algorithm reduces the complexity of the original question from o(2 n ) to o(n). We further investigate the influence mechanism of model parameters on the results and find that when market demand increases or the selling price of the final product increases, value of private information increases significantly. However, if market demand uncertainty increases, the value of information may increase or decrease for both sides.

Sign in / Sign up

Export Citation Format

Share Document