Pricing model of two-echelon supply chain for substitutable products based on double-interval grey-numbers

2021 ◽  
pp. 1-23
Author(s):  
Peide Liu ◽  
Ayad Hendalianpour ◽  
Mohammad Hamzehlou
Keyword(s):  
Supply Chain ◽  
Distribution Channel ◽  
Optimal Pricing ◽  
Power Structures ◽  
Pricing Models ◽  
Holding Costs ◽  
Pricing Decisions ◽  
Substitutable Products ◽  
Retail Prices ◽  
The Common

The present study investigates a two-echelon supply chain including a usual retailer and two competing manufacturers. The objective function of our model is the maximization of the whole profit of the supply chain, which consists of the stochastic demand, shortage cost, and holding costs. This paper aims to analyze a single period with two products to define the optimum retail prices and wholesales under different game theory approaches (e.g., Bertrand, cooperation, and Stackelberg competitions) based on Double Interval Grey Numbers (DIGN). The other aim of this paper is to specify the price using the manufacturers and the common retailer and considering the stochastic different channel power structures and demand function. In this paper, it is considered that different power structures of channel members may affect the optimal pricing decisions. In this paper, two pricing policies of manufacturers, eight pricing models and various structures of distribution channel members are utilized. In these pricing models, the impacts of retail substitutability are evaluated on the decisions of the chain members and the equilibrium profits. In this paper, the products are substitutable and the demand is stochastic. In this model, the demand is not certain then, we may have shortages or unsold products. Finally, sensitivity analysis is provided for illustrating the theoretical outcomes established in each case.

Optimal pricing for a multi-echelon closed loop supply chain with different power structures and product dual differences

2020 ◽  
Vol 257 ◽  
pp. 120281 ◽  
Author(s):  
Wenjie Liu ◽  
Dingzhi Qin ◽  
Ningning Shen ◽  
Jing Zhang ◽  
Mingzhou Jin ◽  
...  
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Optimal Pricing ◽  
Power Structures ◽  
Closed Loop Supply Chain

Examining Double Marginalization Effect for Innovative Product Supply Chain

2012 ◽  
Vol 3 (1) ◽  
pp. 37-52 ◽  
Author(s):  
Wenjing Shen
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Limited Attention ◽  
Innovative Product ◽  
Double Marginalization ◽  
Pricing Decisions ◽  
Number Of Factors ◽  
Innovative Products ◽  
Retail Prices ◽  
Over Time

Double marginalization effect refers to the phenomenon that when both upstream and downstream firms have monopolistic power, customers pay higher retail price and firms make less profit than when the supply chain is vertically integrated (Tirole, 1988). Although double marginalization effect has been extensively studied in the context of supply chain management for mature products, very limited attention has been given to innovative products whose demand is generated through word-of-mouth effect. The authors study the pricing decisions in a supply chain that sells innovative products. Using a modified Bass diffusion model to capture demand trajectory over time, the authors identify the optimal way for the retailer and supplier to adjust prices when profit is not discounted, and also provide numerical examples when profit is discounted. The authors show that (1) when profit is not discounted the optimal retail prices are adjusted over time, while the optimal wholesale price should be kept as a constant, and (2) double marginalization effect also exists in an innovative product supply chain, but its degree depends on a number of factors, such as the innovation and imitation coefficients.

Coordination contract for a competitive pharmaceutical supply chain considering corporate social responsibility and pricing decisions

2020 ◽  
Vol 54 (5) ◽  
pp. 1515-1535 ◽  
Author(s):  
Maryam Johari ◽  
Seyyed-Mahdi Hosseini-Motlagh
Keyword(s):  
Corporate Social Responsibility ◽  
Supply Chain ◽  
Social Responsibility ◽  
Cost Sharing ◽  
Stackelberg Game ◽  
Market Demand ◽  
Pharmaceutical Supply Chain ◽  
Pricing Decisions ◽  
Substitutable Products ◽  
Corporate Social

Corporate social responsibility (CSR) and pricing decisions are proposed for a competitive two-level pharmaceutical supply chain (PSC) comprising two pharma-manufacturers and one pharma-retailer. In the investigated PSC, the pharma-manufacturers competitively invest in the CSR effort to produce a new medicine and sell two substitutable products to the market through the pharma-retailer, deciding on selling prices of manufacturers’ products. The PSC under consideration is modeled in three decision-making structures, i.e., decentralized, centralized, and coordinated models. In the decentralized model, the pricing and CSR decisions are individually obtained using a pharma-manufacturers–Stackelberg game structure. In the centralized model as a benchmark, the best performance of the entire PSC system is achieved. Finally, to encourage all PSC members to agree on the coordination plan, a CSR cost-sharing contract is proposed. Our results reveal that under competitive environment, the proposed CSR cost-sharing contract is able to increase market demand by significantly decreasing selling prices and increasing level of the CSR efforts.

scholarly journals Pricing Decisions for a Sustainable Supply Chain in the Presence of Potential Strategic Customers

2020 ◽  
Vol 12 (4) ◽  
pp. 1655 ◽  
Author(s):  
Xinmin Liu ◽  
Kangkang Lin ◽  
Lei Wang ◽  
Lili Ding
Keyword(s):  
Supply Chain ◽  
Purchase Behavior ◽  
Optimal Pricing ◽  
Selling Price ◽  
Sustainable Supply Chain ◽  
Purchasing Decisions ◽  
Strategic Customers ◽  
Pricing Decisions ◽  
Leading Role ◽  
Will Force

In service to sustainable development, consumers have begun to prefer green products for their special environmental characteristics, and many enterprises are introducing new products to improve their competitiveness, but this tactic may not work if customers are strategic, as they might choose to defer purchasing decisions while prices are high and wait for lower prices in the future. Considering the differences in purchase behavior, we divided customers into two groups—strategic customers and myopic customers. Furthermore, we distinguished three types of strategic customers according to their different preferences to analyze the optimal pricing and greenness strategies in sustainable supply chain in strategic customer scenarios. Our results led to the following conclusions. (1) Strategic customers’ individual preferences can affect optimum equilibrium and that a higher purchase price threshold can stimulate the manufacturer to improve greenness and set a higher price, while a higher greenness purchase threshold and purchase value threshold will force manufacturer to set a lower price. (2) We observed that strategic customers can increase demand and vender profit. As the number of strategic customers increases, selling price and greenness will experience downward trends in a price threshold scenario but upward trends in greenness threshold and value threshold scenarios. (3) A firm can take measures to mitigate the effects of strategic customers by adjusting price and greenness dynamically according to price and greenness sensitivity, which can play a leading role in actively influencing strategic customer behavior.

Study on Discrimination Pricing Model of Closed-Loop Supply Chain with Product Remanufacturing

2012 ◽  
Vol 452-453 ◽  
pp. 663-668 ◽  
Author(s):  
Hong Wei Jiang
Keyword(s):  
Supply Chain ◽  
Environmental Protection ◽  
Closed Loop ◽  
New Product ◽  
Coordination Mechanism ◽  
Optimal Pricing ◽  
Pricing Model ◽  
Supply Chain System ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions

With awareness of environmental protection strengthens and constraints of regulations and laws to environmental protection increasing, more and more enterprises focus on the closed-loop supply chain management. Considering difference between new product and remanufactured product, this paper constructs closed-loop supply chain system with manufacturers recycling used products directly from the consumers based on game theory. The optimal pricing decisions and the optimal profit of centralized and decentralized closed-loop supply chain are obtained. It is found that the efficiency of decentralized closed-loop supply chain decreases by 25%. At last, the coordination mechanism is designed to solve the profit conflict in the decentralized closed-loop supply chain by the two-part tariff contract.

Research on Coordination in the Closed-Loop Supply Chain with Remanufacturing

2012 ◽  
Vol 220-223 ◽  
pp. 319-322
Author(s):  
Hong Wei Jiang
Keyword(s):  
Game Theory ◽  
Supply Chain ◽  
Closed Loop ◽  
New Product ◽  
Profit Sharing ◽  
Coordination Mechanism ◽  
Optimal Pricing ◽  
Supply Chain System ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions

Based on game theory, this paper constructs closed-loop supply chain system with retailer recycling used products from the consumers incorporating difference between new product and remanufactured product. The optimal pricing decisions and the optimal profits of centralized coordinated and decentralized closed-loop supply chain are obtained. It is found that the efficiency of decentralized closed-loop supply chain decreases by 25%. Finally, the coordination mechanism is designed to solve the profit conflict in the decentralized closed-loop supply chain by the profit sharing contract.

scholarly journals Strategic Integration Decision under Supply Chain Competition in the Presence of Online Channel

Symmetry ◽  
2020 ◽  
Vol 13 (1) ◽  
pp. 58
Author(s):  
Subrata Saha ◽  
Izabela Nielsen
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Strategic Integration ◽  
Pricing Decisions ◽  
Substitutable Products ◽  
Product Pricing ◽  
Supply Chain Competition ◽  
Strategic Cooperation ◽  
Online Channel ◽  
Vertical Level

This study explores the pricing decisions of substitutable products for two competing supply chains in the presence of an online channel. Each supply chain consisting of a single manufacturer and an exclusive retailer and one of the manufacturers distributes products through the online channel. We examine optimal decisions under five scenarios to explore how the strategic cooperation between two manufacturers at the upstream horizontal level or with the retailer at the vertical level affects product pricing decisions and the performance of two supply chains? The results reveal that decisions for cooperation with competing manufacturers and opening an online channel are correlated. In the absence of an online channel, cooperation with their respective retailer can lead to a higher supply chain profit. However, if a manufacturer opens an online channel, then cooperation with competing manufacturers can lead to a higher supply chain profit. Under the vertical integration, total supply chain profit might be lower compared to a scenario where members in each supply chain remain independent. Consumers also need to pay more for products.

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