Supply Chain Decisions Considering Heterogeneous Consumer Greenness Preference and Reservation Utilities

2019 ◽  
Vol 12 (1) ◽  
pp. 1-21 ◽  
Author(s):  
YuHang Zhang ◽  
Ying Wang
Keyword(s):  
Supply Chain ◽  
Willingness To Pay ◽  
Bargaining Power ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Retail Price ◽  
Game Model ◽  
Dimensional Model ◽  
The Common ◽  
Reservation Utility

This article focuses on how the prices set by supply chains and the product greenness level changes when there exists a difference for consumers in both their greenness preference and their reservation utility for the common product with minimal greenness, based on a two-dimensional model which is built and the market is partitioned into four groups. In this study, the authors use the Stackelberg game model to analyze the decisions of a two-stage supply chain, providing environmentally friendly products affected by a consumer greenness preference which is represented by the willingness-to-pay (WTP) for product greenness. The authors found that manufacturers may lower the product greenness level with the decrease of the valuation of consumer's WTP for product greenness, but he may prefer keeping the same product greenness, he will even improve it, when there is a reduction in reservation utility for the traditional product. Moreover, this article shows that there is different impact for different combinations of both WTP for product greenness and product greenness level (different market segmentations) on price decisions of the manufacturer and retailer. In consideration of the asymmetric information about consumer's utility and willingness to pay between manufacturer and retailer, the authors introduce the bargaining power into the study, and then they conclude that during the different market segmentations, the wholesale price and retail price go down as a retailer strengthens his bargaining power, and increasing sales volume can improve profit to make up for a loss in retail price.

Revenue Sharing Contract of Green Supply Chain under Manufacturer Risk-Aversion

2014 ◽  
Vol 697 ◽  
pp. 482-487
Author(s):  
Shi Ying Jiang ◽  
Chun Yan Ma
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Risk Aversion ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Green Supply Chain ◽  
Game Model ◽  
Product Price ◽  
Revenue Sharing Contract

Background on two stages green supply chain consisting of a manufacturer and a retailer, considering the degree of risk aversion and product greenness, consumer preferences and other factors, the centralized decision-making game model and manufacturer-leading Stackelberg game model are established.Then two game models are compared. The interaction of product greenness, wholesale price, product price,and risk aversion utility for manufacturers and retailers are also disscussed. Finally, the revenue sharing contract is applied to coordinate the green supply chain . The results show that:(1) In the centralized decision-making model, there is a critical value of the product green degree; (2)In manufacturer-leading Stackelberg game model, the higher the green degree of the product, the higher the manufacturer's wholesale price,and the wholesale price increases as risk aversion degree of manufacturers improves;(3)The revenue sharing contract can coordinate this type of green supply chain under manufacturers risk-averse.

Decision Models of Supply Chain Under Asymmetric Information with Demand Disruption

2010 ◽  
Vol 143-144 ◽  
pp. 773-781
Author(s):  
Xin Rong Jiang ◽  
Yong Chao Li
Keyword(s):  
Supply Chain ◽  
Asymmetric Information ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Retail Price ◽  
Expected Profit ◽  
Decision Models ◽  
Market Demand ◽  
Optimal Production ◽  
Production Quantity

This paper studied the influence of asymmetric information and demand disruption on the decision of the supply chain. We analyzed the supply chain decision models based on a Stackelberg game under normal circumstances and demand disruption situation. The conclusion indicates when the market demand is disrupted, the optimal wholesale price, the retail price, the supplier’s expected profit and the supply chain system’s expected profit change in the same direction as the demand disruption, while the optimal production quantity and the retailer’s profit both have certain robustness under disruption. Finally we gave a numerical example to illustrate our analysis.

scholarly journals Equilibrium decisions on pricing and innovation that impact reference price dynamics

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Shaokun Tao ◽  
Xianjin Du ◽  
Suresh P. Sethi ◽  
Xiuli He ◽  
Yu Li
Keyword(s):  
Supply Chain ◽  
Steady State ◽  
Reference Price ◽  
Stackelberg Game ◽  
Interactive Effect ◽  
Wholesale Price ◽  
Retail Price ◽  
Price Ratio ◽  
Reference Prices ◽  
Consumer Memory

<p style='text-indent:20px;'>Previous studies have confirmed that reference prices play an essential role in consumer purchasing decisions, and some researchers have suggested that reference prices are positively influenced by innovation. Therefore, we construct an interactive effect of innovation and reference price to study their combined impact on supply chain decisions. We model a supply chain, where a manufacturer determines the innovation level and the wholesale price while the retailer controls the retail price, as a dynamic Stackelberg game. We show that the interactive effect causes the steady-state wholesale and retail prices to increase, thus motivating the manufacturer to increase innovation investment. We see that the retail price and the level of innovation increase in reference price effect whereas they decrease in consumer memory. The centralized firm has a higher steady-state innovation level and innovation/price ratio and lower steady-state retail price compared to the decentralized supply chain. Consumers also benefit from the interactive effect as well as from centralization. Finally, we use numerical analysis to demonstrate our results and offer some managerial implications.</p>

scholarly journals CSR Remanufacturing Supply Chains under WTP Differentiation

2020 ◽  
Vol 12 (6) ◽  
pp. 2197
Author(s):  
Lili Dai ◽  
Tong Shu ◽  
Shou Chen ◽  
Shouyang Wang ◽  
Kin Keung Lai
Keyword(s):  
Sustainable Development ◽  
Corporate Social Responsibility ◽  
Supply Chain ◽  
Social Responsibility ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Consumer Surplus ◽  
Retail Price ◽  
Recycling Rate ◽  
Corporate Social

With the shortage of global resources and the call for sustainable development, the remanufacturing supply chain and the corporate social responsibility of enterprises have attracted extensive attention from scholars. This paper studies a manufacturer-retailer corporate social responsibility (CSR) remanufacturing supply chain in which the manufacturer collects the used products grounded in the willingness to pay (WTP) differentiation. Different from previous literature, this paper first adds WTP differences to the CSR remanufacturing supply chain. Next, we analyze the manufacturer exhibiting CSR activity by Stackelberg game theory in both centralized and decentralized models with a consideration of prices, recycling, consumer surplus, and profits for the chain players in the two models with different CSR ratios. Through calculation and analyses of the models, we note that the chain members have the best status when the consumers’ WTP for new and remanufactured products is within a threshold. Subsequently, we compare the optimal price decisions and the expected profits in the decentralized and centralized systems, and we find that the retail price, wholesale price, and recycling rate decrease with a rising CSR under WTP differentiation. The centralized retail price is lower than the decentralized one. Conversely, the profit is higher when the increment of demand is higher. On top of that, in common cases, the pure and total profits of manufacturing are ascending while the retailer’s profit is descending. We also find that the consumer surplus is increasing in two cases. Finally, to motivate the players in the supply chain to engage in CSR activity, we consider the revenue sharing contract. From the perspective of WTP differences, this paper studies CSR remanufacturing, which has certain influences on the sustainable development of the economy.

scholarly journals Game Model of Retailers Leading Closed-Loop Supply Chain under Different Guarantee Modes

2020 ◽  
Vol 10 (10) ◽  
pp. 71-78
Author(s):  
Wu Mei-xiang ◽  
Shi Cheng-dong ◽  
Sun Qiang
Keyword(s):  
Supply Chain ◽  
Willingness To Pay ◽  
Closed Loop ◽  
Mode Selection ◽  
Game Model ◽  
Closed Loop Supply Chain ◽  
The Common ◽  
Cost Parameters ◽  
Guarantee Period

—In order to study the retailer-led differentiated guarantee behavior of CLSC's remanufactured products, assuming that demand is influenced by differentiated guarantee period of remanufactured products and consumers' willingness to pay, three game models of unguaranteed, manufacturer's guarantee and retailer's guarantee are constructed respectively to discuss the influence of guarantee mode selection and guarantee cost parameters on each member's decision. The results show that differentiated guarantees for remanufactured products are beneficial to extending the guarantee period, reducing the price of remanufactured products, improving CLSC members and overall profits. When consumers are less sensitive to differentiated guarantee for remanufactured products, CLSC decision in each mode has little to do with guarantee cost parameters and guarantor selection. When consumers are more sensitive, the advantages of each guarantee mode are significantly different, and manufacturer guarantee is the common choice of both parties. Finally, an example is given to further verify the conclusion.

A Strategic Analysis of Mixed Channel Structure

2015 ◽  
Vol 2 (1) ◽  
pp. 39-59 ◽  
Author(s):  
Xiaowei Linda Zhu ◽  
Xingxing Zu ◽  
Lei Zhu ◽  
Huafan Ma
Keyword(s):  
Supply Chain ◽  
Business Model ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Value Added ◽  
Optimal Strategies ◽  
Retail Store ◽  
Retail Price ◽  
Channel Structure ◽  
Online Store

In order to meet the needs of different customer segments, manufacturers use multiple distribution channels. This paper will examine two of the most common types of multi-channel structures. Under Structure 1, a supply chain includes a manufacturer, its online store and its own retail store, like GAP's business model. A profit maximization model is used to obtain optimal strategies in terms of optimal retail price and level of value-added services provided by manufacturer-owned retailer. Under Structure 2, a supply chain includes a manufacturer, its online store and an independent retail store, like Dell's business model. Stackelberg game is applied to obtain the optimal retail price, wholesale price, and level of value-added services provided by an independent retailer. Furthermore, comparisons between these two business structures are discussed and managerial guidelines are proposed. Finally, numerical examples are provided and real business examples are discussed to illustrate and justify the theoretical results.

scholarly journals Pricing, Green Degree and Coordination Decisions in a Green Supply Chain with Loss Aversion

Mathematics ◽  
2019 ◽  
Vol 7 (3) ◽  
pp. 239 ◽  
Author(s):  
Zhongwei Feng ◽  
Chunqiao Tan
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Loss Aversion ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Subgame Perfect Equilibrium ◽  
Retail Price ◽  
Green Supply Chain ◽  
Efficiency Coefficient ◽  
Decentralized Decision Making

The consumer environmental awareness promotes green manufacturing and the behavioral preferences of members become prevailing in supply chain management. To promote further development of green supply chains, a two-echelon green supply chain with a manufacturer and a retailer is considered, where the manufacturer is loss-averse and the retailer is risk-neutral. We use a Stackelberg game to investigate the impacts of loss aversion and green efficiency coefficient on retail price, wholesale price, green degree, profits of members, and profit of the green supply chain under the assumption that manufacturer’s reference point of loss aversion is equal to the subgame perfect equilibrium partition. It is shown that, in the centralized decision-making setting (CDS), green degree and profit of the green supply chain are higher than those in the decentralized decision-making setting (DDS), while in the decentralized decision-making setting with a loss-averse manufacturer (DDS-LAM) loss aversion of manufacturer further decreases green degree and profit of green supply chain. It is also found that profits of the manufacturer and the retailer decrease with levels of loss aversion of manufacturer. Furthermore, it is also shown that wholesale price and retail price in the three decision-making settings depend on the green efficiency coefficient. Wholesale price and retail price in DDS-LAM are always the lowest (highest) if the green efficiency coefficient is sufficiently high (low). Finally, executing a greening cost-sharing contract can improve chain members’ profits if the retailer shares an appropriate proportion with the loss-averse manufacturer.

scholarly journals Single-Manufacturer Multi-Retailer Supply Chain Models with Discrete Stochastic Demand

2021 ◽  
Vol 13 (15) ◽  
pp. 8271
Author(s):  
Yaqing Xu ◽  
Jiang Zhang ◽  
Zihao Chen ◽  
Yihua Wei
Keyword(s):  
Dynamic Programming ◽  
Supply Chain ◽  
Computational Complexity ◽  
Stackelberg Game ◽  
Programming Model ◽  
Dynamic Programming Method ◽  
Game Model ◽  
Chain Model ◽  
Stochastic Demands ◽  
Demand Models

Although there are highly discrete stochastic demands in practical supply chain problems, they are seldom considered in the research on supply chain systems, especially the single-manufacturer multi-retailer supply chain systems. There are no significant differences between continuous and discrete demand supply chain models, but the solutions for discrete random demand models are more challenging and difficult. This paper studies a supply chain system of a single manufacturer and multiple retailers with discrete stochastic demands. Each retailer faces a random discrete demand, and the manufacturer utilizes different wholesale prices to influence each retailer’s ordering decision. Both Make-To-Order and Make-To-Stock scenarios are considered. For each scenario, the corresponding Stackelberg game model is constructed respectively. By proving a series of theorems, we transfer the solution of the game model into non-linear integer programming model, which can be easily solved by a dynamic programming method. However, with the increase in the number of retailers and the production capacity of manufacturers, the computational complexity of dynamic programming drastically increases due to the Dimension Barrier. Therefore, the Fast Fourier Transform (FFT) approach is introduced, which significantly reduces the computational complexity of solving the supply chain model.

scholarly journals Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain

2020 ◽  
Vol 12 (8) ◽  
pp. 3236
Author(s):  
Gan Wan ◽  
Gang Kou ◽  
Tie Li ◽  
Feng Xiao ◽  
Yang Chen
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Good Combination ◽  
Green Supply Chain ◽  
Game Model ◽  
Mathematical Function ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Retail Channel ◽  
Offline Channels

Due to the popularization of the concept of “new retailing”, we study a new commercial model named O2O (online-to-offline), which is a good combination model of a direct channel and a traditional retail channel. We analyze an O2O supply chain in which manufacturers are responsible for making green products and selling them through both online and offline channels. The retailer is responsible for all online and offline channels’ orders, and the manufacturer gives the retailer a fixed fee. We construct a mathematical function model and analyze the greenness and pricing strategies of centralized and decentralized settings through the retailer Stackelberg game model. Due to the effects of the double marginalization of supply chain members, we adopt a simple contract to coordinate the green supply chain. The paper’s contributions are that we obtain pricing and greening strategies by taking the cooperation of offline channels and online channels into consideration under the O2O green supply chain environment.

scholarly journals Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

2021 ◽  
Vol 16 (5) ◽  
pp. 1492-1516
Author(s):  
Wenhua Hou ◽  
Yuwen Zeng
Keyword(s):  
Supply Chain ◽  
Discount Rate ◽  
Reference Price ◽  
Stackelberg Game ◽  
Lower Boundary ◽  
Retail Price ◽  
Reference Points ◽  
Price Effects ◽  
Retail Prices ◽  
Online Book

(1) Background: A binding recommended retail price has been used in several markets in a variety of forms, and the book market is a typical example. Publishers sell books to online retailers at a unit wholesale discount computed on the cover price. Retailers are then allowed to set the retail price. Therefore, if consumers regard the cover prices as reference points, then they may be more likely to purchase books if retail prices are lower than the cover prices. (2) Methods: We develop a Stackelberg game model for a book supply chain to investigates how reference price effects affect retailers and publisher’s pricing strategies. (3) Results: The results show that retailers will sell printed books at a discount only when the publisher’s wholesale discount rate is not high. Further, as the intensity of the reference price effects increases, (a) the lower boundary of the wholesale discount rate rises, (b) publishers’ profits increase and (c) retailers’ profits increase relative to the level of consumers’ e-books acceptance. (4) Conclusions: This result is related to the fact that the online retailer, such as Amazon and JD.com, like to invoke reference price effects in consumers’ minds by highlighting the printed book’s discount rate.

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