scholarly journals Optimal pricing and ordering strategies for dual-channel retailing with different shipping policies

2022 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Ning Li ◽  
Zheng Wang
Keyword(s):  
Optimal Pricing ◽  
Dual Channel ◽  
Ordering Policy ◽  
Maximum Utility ◽  
Policy Gradient ◽  
Online Channel ◽  
Free Shipping ◽  
Shipping Policy ◽  
Offline Channels ◽  
Better Than

<p style='text-indent:20px;'>In this paper, considering dual-channel retailing (online channel and offline channel), we study the pricing and ordering problem under different shipping policies. In this research, we mainly consider three shipping policies: without shipping price (OSP), with shipping price (WSP) and conditional free shipping (CFP). Based on the principle of maximum utility, we firstly obtain the probability of demand for the online and offline channels and further model the pricing and ordering problem under the three shipping policies. Further, avoiding the curse of dimensionality, the deep deterministic policy gradient (DDPG) method is employed to solve the problem to obtain the optimal pricing and ordering policy. Finally, we conduct some numerical experiments to compare the optimal pricing and ordering quantity under the three different shipping policies and reveal some managerial insights. The results show that the conditional free shipping policy is better than the other two policies, and stimulates the increase of demand to gain more profit.</p>

scholarly journals The Complexity and Entropy Analysis for Service Game Model Based on Different Expectations and Optimal Pricing

Entropy ◽  
2018 ◽  
Vol 20 (11) ◽  
pp. 858 ◽  
Author(s):  
Yimin Huang ◽  
Xingli Chen ◽  
Qiuxiang Li ◽  
Xiaogang Ma
Keyword(s):  
Initial Conditions ◽  
Optimal Pricing ◽  
Game Model ◽  
Chaotic State ◽  
Feedback Parameter ◽  
Additional Information ◽  
Online Channel ◽  
The Stability ◽  
Offline Channels ◽  
Channel Service

The internet has provided a new means for manufacturers to reach consumers. On the background of the widespread multichannel sales in China, based on a literature review of the service game and multichannel supply chain, this paper builds a multichannel dynamic service game model where the retailer operates an offline channel and the manufacturer operates an online channel and offers customers the option to buy online and pick up from the retailer’s store (BOPS). The manufacturer and the retailer take maximizing the channel profits as their business objectives and make channel service game under optimal pricing. We carry on theoretical analysis of the model and perform numerical simulations from the perspective of entropy theory, game theory, and chaotic dynamics. The results show that the stability of the system will weaken with the increase in service elasticity coefficient and that it is unaffected by the feedback parameter adjustment of the retailer. The BOPS channel strengthens the cooperation between the manufacturer and the retailer and moderates the conflict between the online and the offline channels. The system will go into chaotic state and cause the system’s entropy to increase when the manufacturer adjusts his/her service decision quickly. In a chaotic state, the system is sensitive to initial conditions and service input is difficult to predict; the manufacturer and retailer need more additional information to make the system clear or use the method of feedback control to delay or eliminate the occurrence of chaos.

scholarly journals The Implication of Channel Discrepancy in a Dual-Channel Supply Chain

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-13
Author(s):  
Zhenyang Pi ◽  
Weiguo Fang
Keyword(s):  
Supply Chain ◽  
The Other ◽  
Optimal Pricing ◽  
Backward Induction ◽  
Pricing Strategies ◽  
Power Structures ◽  
Induction Method ◽  
Dual Channel ◽  
Online Channel ◽  
Dual Channel Supply Chain

This paper studies the implication of channel discrepancy between the retail and direct channels in a dual-channel supply chain consisting of one common retailer and two manufacturers in which the manufacturers may have different market powers. Each manufacturer provides a substitutable product and opens an online channel to customers directly. We develop an analytical model to derive the optimal pricing strategies by using game theory and the backward induction method, and we examine related properties under three market power structures while considering channel discrepancy, including the Nash equilibrium, the Manufacturers leader Stackelberg, and the M1 leader Stackelberg models (denoted as the N, MS, and M1S models, respectively). Numerical simulations are examined to reveal and verify the effect of channel discrepancy on optimal prices, demands, and profits. We find that a higher level of channel discrepancy induces higher prices, demands, and profits for each member in both channels, while this kind of stimulating impact for the leader manufacturer who obtains a higher level of channel discrepancy will be more significant than it is for the other members in the three models. In addition, the profit of the supply chain in the N model is always higher than it is in the MS model, while it may be higher or lower than it is in the M1S model depending on the level of channel discrepancy.

scholarly journals Interactions of Bargaining Power and Introduction of Online Channel in Two Competing Supply Chains

2018 ◽  
Vol 2018 ◽  
pp. 1-18 ◽  
Author(s):  
Jie Wei ◽  
Tong Shao ◽  
Jing Zhao
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Numerical Approach ◽  
Optimal Pricing ◽  
Online Retailing ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Maximal Profit ◽  
Competition Ability ◽  
Online Channel

This paper studies the effect of dual-channel format on supply chain’s competition ability and the effect of different bargaining powers on the competition between two supply chains and the optimal pricing decisions of all supply chain members when one supply chain introduces an online retailing channel. We develop four game models and obtain the optimal pricing decisions in closed form of these models and give some sensitivity analysis through numerical approach. Some new managerial insights are obtained as follows: Regardless of the two supply chain members’ bargaining forms, the optimal price, the maximal demand, and the maximal profit decrease as the self-price sensitivity decreases. The industry holds advantage in getting higher profit when the supply chain without online retailing channel is led by the retailer. In addition, we find that a manufacturer as a leader of its supply chain can get more profit when the competing supply chain’s leader is the manufacturer than when the competing supply chain’s leader is the retailer.

scholarly journals ONLINE PRICING FOR SMALL MEDIUM ENTERPRISES’ PRODUCTS IN THE EX-LOCALIZATION OF DOLLY SURABAYA

2021 ◽  
Vol 16 (3) ◽  
pp. 169-176
Author(s):  
Ig. Jaka Mulyana ◽  
Ivan Gunawan ◽  
Dian Trihastuti ◽  
Yehezkiel Prakoso Putra Yunen ◽  
Dwi Agustin Nuriani Sirodj
Keyword(s):  
Consumer Preferences ◽  
Small And Medium Enterprises ◽  
Model Parameters ◽  
Channel One ◽  
Dual Channel ◽  
Pricing Decision ◽  
Online Channel ◽  
Small Medium Enterprises ◽  
Medium Enterprises ◽  
Offline Channels

Numerous Small and Medium Enterprises (SMEs) do not have a basic method in pricing decisions. Many times, this decision comes up based on an intuitive probe instead of a detailed analysis. This could lead to marketing problems, which may result in disruptions of financial liquidity. This also applies to SMEs wishing to sell products through the online channel. They need a proper pricing strategy, considering its different marketing strategies. Sales made through both offline channels (conventional stores) and online channels are known as Dual-Channel Supply Chain (DCSC). It is argued that the pricing decision at DCSC needs to consider consumer preferences in selecting the sales channel. One assumption commonly adopted in the DCSC pricing model is that the lost value if consumers purchase products through online channels. Therefore, the pricing decision for the online channel should be cheaper than the price on the offline channel. This study aims to assist SMEs in the ex-localization of Dolly in Surabaya in determining the price of products to be sold through online channels. Three types of products: batik, chips, and leather shoes were selected as research samples to represent the product groups: craft, fashion, and processed food. This study proposes an optimal online price strategy through experiments with a mathematical model. Model parameters, namely consumer preferences in choosing sales channels, are obtained through surveys. Apart from that, surveys are also used to reveal which platforms consumers are interested in shopping online. Shopee and Instagram were chosen by respondents as the most popular marketplaces and social media for online shopping. Finally, the online prices proposed for the batik product are IDR 82,500-IDR 66,000; chips Rp7,620-Rp6,336; and leather shoes Rp.103,800-Rp82,200.

PRICING AND INVENTORY STRATEGIES FOR A TWO-STAGE DUAL-CHANNEL SUPPLY CHAIN

2012 ◽  
Vol 29 (01) ◽  
pp. 1240004 ◽  
Author(s):  
RUN H. NIU ◽  
XUAN ZHAO ◽  
IGNACIO CASTILLO ◽  
TARJA JORO
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Product Line ◽  
Two Stage ◽  
Web Based ◽  
Dual Channel ◽  
Eoq Model ◽  
Joint Pricing ◽  
Dual Channel Supply Chain ◽  
Offline Channels

The Internet is becoming increasingly important as a sales channel. Thus, most large retail firms have adopted a multi-channel strategy that includes both web-based channels and pre-existing offline channels. In this paper, we consider joint pricing and inventory/production decision problems for members in a monopoly two-stage dual-channel retailer supply chain. For a dual-channel retailer, pricing in one channel will affect the demand in the other channel. This subsequently affects the retailer's replenishment (ordering) decisions, which have an impact on the producer's inventory/production plans and wholesale price decisions. It is clear then that pricing decisions and inventory/production decisions are interacting in each member of the supply chain and among the members in the chain as well. In this paper, we analyze joint pricing and inventory/production problems under three scenarios by incorporating intra-product line price interaction in the EOQ model. We show that a unique equilibrium exists under certain realistic conditions. We also provide numerical results that offer insights for pricing strategies for the dual-channel retailer supply chain and for product design for different channels.

scholarly journals Empirical Study of Omnichannel Purchasing Pattern with Real Customer Data from Health and Lifestyle Company

2019 ◽  
Vol 11 (24) ◽  
pp. 7185 ◽  
Author(s):  
Jongsoo Kang ◽  
Marko Majer ◽  
Hyun-Jung Kim
Keyword(s):  
High Performance ◽  
Statistical Significance ◽  
Real Data ◽  
Usage Pattern ◽  
Customer Data ◽  
Customer Group ◽  
Trading Period ◽  
Online Channel ◽  
The Difference ◽  
Offline Channels

This study examines the effect of omnichannel usage pattern on customers’ purchasing amount by determining statistical significance of different purchasing amount occurred for online and offline channel usage pattern with empirical analysis. The data is collected from a health and lifestyle company operated by Major Pharmaceutical company in Korea, which sells health supplement and skincare products through their owned online and offline channels. The channel usage pattern of customers is categorized into four groups: Customer using online channel only, customer using offline channel only, customer first joined membership through online and use both on/offline channels and customers joined membership through offline channel and use both on/offline. Then, the trading period, total number of purchasing, average purchasing amount per transaction and total purchasing amount during trading period among the above four groups were analyzed. The result demonstrated the number of purchasing, average purchasing amount and total purchasing amount for the omnichannel customer groups who cross used on and offline showed statistical significance. However, the difference in purchasing amount between the group of customers who joined online membership and use offline channel and another customer group that joined offline membership and use online channel was not statistically significant. This study overcame the limitation of conventional studies used survey based data, by the application of empirical data from the real customers in on/offline channels, and provides meaningful insights based on empirical real data that group of customers with higher purchasing experience in both on/offline channels shows high performance.

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