Procedural fairness concerns in supply chain with retailer promotional effort

2018 ◽  
Vol 13 (2) ◽  
pp. 302-330 ◽  
Author(s):  
Tengfei Nie ◽  
Hualin Liu ◽  
Yilun Dong ◽  
Shaofu Du
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Procedural Fairness ◽  
Content Type ◽  
Promotional Effort ◽  
Fair Process ◽  
Slotting Allowances ◽  
Fairness Concerns ◽  
Distributional Fairness

Purpose The existing literature has a lack of modeling of procedural fairness concerns in the supply chain level. This paper aims to investigate how procedural fairness concerns affect channel decisions, performance and coordination. Design/methodology/approach This paper considers a supply chain consisting of one supplier and one retailer who have procedural fairness concerns in a classic Stackelberg game setting. The model is set in sales promotional environment. According to the existing literature, engagement is used to depict fair process. Some findings are made through analyzing respective decisions of the supplier and the retailer under the influence of procedural fairness concerns. Findings The results show that the channel efficiency can be improved when the retailer exhibits procedural fairness concerns, but if the aversion to unfair process exceeds a certain threshold, the retailer cannot benefit from it. Besides, the retailer profits more when he cares about distributional fairness, although the whole channel surplus can be improved by procedural fairness concerns. Originality/value This is the first paper to study the influences of procedural fairness concerns on supply chain decisions and channel performance. Finally, a mechanism combining a wholesale price contract with slotting allowances is proposed to coordinate the supply chain.

Pricing supply chain option contracts: a bilevel programming approach

2020 ◽  
Vol 15 (4) ◽  
pp. 1567-1589
Author(s):  
Abir Trabelsi ◽  
Hiroaki Matsukawa
Keyword(s):  
Supply Chain ◽  
Demand Uncertainty ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Optimal Order ◽  
Programming Approach ◽  
Market Demand ◽  
Content Type ◽  
Option Contract ◽  
Optimal Pricing Strategy

Purpose This paper considers an option contract in a two-stage supplier-retailer supply chain (SC) when market demand is stochastic. The problem is a Stackelberg game with the supplier as a leader. This research assumes demand information sharing. The purpose of this study is to determine the optimal pricing strategy of the supplier along with the optimal order strategy of the retailer in three option contract cases. Design/methodology/approach The paper model the option contract pricing problem as a bilevel problem. The problem is then solved using bilevel programing methods. After computing, the generated outcomes are compared to a benchmark (wholesale price contract) to evaluate the contract. Findings The results reveal that only one of the contract cases can arbitrarily allocate the SC profit. In both other cases, the Stackelberg supplier manages to earn the total SC profit. Further analysis of the first contract, show that from the supplier’s perspective, the first stage forecast inaccuracy is beneficial, whereas the demand uncertainty in the second stage is detrimental. This contracting strategy guarantees both players better outcomes compared to the wholesale price contract. Originality/value To the best of the authors’ knowledge, this research is the first that links the option contract literature to the bilevel programing literature. It also the first to solve the pricing problem of the commitment option contract with demand update where the retailer exercises the option before knowing the exact demand.

Two-echelon supply chain operational strategy under portfolio financing and tax shield

2019 ◽  
Vol 120 (4) ◽  
pp. 633-656
Author(s):  
Guoshu Dong ◽  
Lihong Wei ◽  
Jiaping Xie ◽  
Weisi Zhang ◽  
Zhefu Zhang
Keyword(s):  
Supply Chain ◽  
Financial Institutions ◽  
Trade Credit ◽  
Stackelberg Game ◽  
Cost Benefit Analysis ◽  
Wholesale Price ◽  
Future Research ◽  
Content Type ◽  
Tax Rate ◽  
Tax Shield

Purpose The development of small- and medium-sized enterprises (SMEs) is vital to the economy, as such the financing of SMEs has become the focus of government and enterprises. The purpose of this paper is to find the operational and financial strategies of the supplier and retailer in supply chain. Design/methodology/approach In a Stackelberg game, supplier moves first setting wholesale price, while the retailer follows, setting the ordering quantity. Enterprises maximize their profits by optimization. When measuring profit targets, the capital constraints and income taxes of two companies are considered. In the portfolio financing model, the retailer can obtain products from suppliers through trade credit, and the supplier can use asset-backed securitization (ABS) to solve his/her financing problems. Findings The wholesale price is a decreasing function of retailer’s initial cash balance, and the supplier’s financing interest rate is a decreasing function of his/her own capital, the incentive effect of the supplier’s price discount strategy on retailer is more intense in the supply chain with high-priced product or high-capital retailer. And in a capital-constrained supply chain, an increase in tax rate or financing rate does not necessarily motivate the supplier to increase wholesale price. Most importantly, if the supplier’s markup is moderate, portfolio financing has value for both retailer and supplier, while solving the financing problems of both parties. Research limitations/implications Future research can consider the explicit and implicit interest when supplier provides trade credit to retailer. It is also possible to consider the portfolio financing when multiple retailers are facing financial constraints. Practical implications It provides guidance for supply chain enterprises with financing needs, helping them find optimal decisions. With financial interest, enterprise income tax on the enterprises’ financing factors will produce a tax shield effect; thus, a cost–benefit analysis with the tax shield effect can provide more accurate picture when making corresponding decisions. Social implications Government takes feasible adjustments of tax rate for the sake of motivation on financial SMEs tax shield. Furthermore, ABS calls for service from financial institutions, which will, in turn, expedite financial institutions revenue. Originality/value The authors provide insights on enterprise financing models, combining ABS with trade credit, expanding enterprise financing channels and enriching the theory of financial supply chain and supply chain management. The authors analyze in detail the influence of tax factors on enterprises by introducing tax factors into traditional process of enterprise operation and financing strategy.

scholarly journals Pricing Decisions of a Supply Chain with Multichannel Retailer under Fairness Concerns

2019 ◽  
Vol 2019 ◽  
pp. 1-22 ◽  
Author(s):  
Xueping Zhen ◽  
Dan Shi ◽  
Sang-Bing Tsai ◽  
Wei Wang
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Rapid Development ◽  
Wholesale Price ◽  
Selling Price ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Fairness Concern ◽  
Dual Channel Supply Chain ◽  
Offline Channels

With the rapid development of the Internet, many traditional retailers have built their online channels. The fairness concern may play an important role in a dual-channel supply chain with a multichannel retailer. This paper establishes a Stackelberg game model in which a manufacturer produces and sells products through direct online channel and a retailer sells directly to consumers through online and offline channels. The manufacturer’s fairness concern (advantageous inequity) and the retailer’s fairness concern (disadvantageous inequity) are considered. Four scenarios are investigated: no fairness concern (NF), the retailer fairness concern (RF), the manufacturer fairness concern (MF), and both the manufacturer and the retailer fairness concern (MRF). The theoretical analysis shows that if the manufacturer’s advantageous inequity concern is low, the profit of the whole supply chain in the MRF scenario is the greatest. Otherwise, the supply chain profit in the NF or RF scenario is the greatest. That is, the manufacturer’s and the retailer’s fairness concern may increase the profit of the supply chain. This study also finds that the manufacturer’s advantageous inequity concern can increase the social welfare. The retailer should not concern about fairness if the manufacturer has high fairness concern. Besides, this paper shows that the manufacturer’s selling price cannot be affected by the fairness concern. Adjusting the wholesale price is the only thing that the manufacturer can do to reduce disadvantageous or advantageous inequity. In the RF scenario, the role of the retailer’s disadvantageous inequity concern is to reallocate the supply chain profit. Our findings provide some managerial insights on the pricing decision when the multichannel retailer and the manufacturer consider the fairness.

scholarly journals Supply chain coordination of biomass moulding fuel under random supply and cyclical demand

2019 ◽  
Vol 1 (1) ◽  
pp. 106-118
Author(s):  
Xinning Li ◽  
Kun Fan ◽  
Lu Wang ◽  
Lang Zhou
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Biomass Energy ◽  
Chain Model ◽  
Online Information ◽  
Supply Chain System ◽  
Content Type ◽  
Fuel Supply

Purpose The purpose of this paper is to design a contract to coordinate the biomass molding fuel supply chain consisting of a supplier with uncertain supply and a producer with cyclical demand as well as improve the profit of this supply chain. Design/methodology/approach In this paper, the supply chain model was build and all the variables and assumptions are set. Stackelberg game model was used to analyze and solve the problem. Furthermore, the authors give numerical examples and result analysis on the basis of data coming from field study and online information about a real biomass fuel supply chain. Findings The wholesale price with shortage penalty contract the authors proposed can coordinate the supply chain. And as the dominator of the supply chain, the producer can realize the redistribution of profits within the supply chain by determine the contract parameters. Research limitations/implications This one-to-one supply chain is a basic of complex supply chain system. Multi-to-one, one-to-multi and multi-to-multi supply chain can be studied in the future. Originality/value The results obtained in this paper can be used as a reference for enterprises in biomass energy supply chain to make contracts and realize the long-term co-operations among supply chain members.

Pricing and inventory decisions in a manufacturer-Stackelberg supply chain with deteriorating items

Kybernetes ◽  
2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anwar Mahmoodi
Keyword(s):  
Supply Chain ◽  
Equilibrium Solution ◽  
Stackelberg Game ◽  
Good Practice ◽  
Wholesale Price ◽  
Deteriorating Items ◽  
Content Type ◽  
Joint Pricing ◽  
Cost Parameters ◽  
Inventory Decision

Purpose Integrated decision of pricing and inventory control for a deteriorating product is known as a good practice in revenue management discipline. The purpose of this paper is to formulate the problem of joint pricing and inventory decision in a manufacturer–retailer supply chain with deteriorating items and backlogging. Furthermore, the other purpose is to develop an efficient algorithm to obtain the equilibrium solution. Design/methodology/approach In this study, a manufacturer–retailer supply chain of a deteriorating product is considered. The retailer aims to maximize his profit, for which he jointly determines the retail price and replenishment cycle. In addition, the manufacturer should decide on the wholesale price to maximize her profit. Considering the problem as a manufacturer-Stackelberg game, the equilibrium solution is formulated and analyzed for both the manufacturer and the retailer. Moreover, two different procedures are developed to obtain the equilibrium solution. The first procedure is an exact procedure for the Taylor-approximated model and the second is a simulated annealing (SA)-embedded algorithm for the actual model. Findings It is found that Taylor-approximated procedure is more accurate than SA-embedded procedure. However, the latter is more time-efficient. Moreover, it is observed that the obtained solution is highly sensitive to demand parameters, while it is not the case for the cost parameters. Originality/value The paper models a real industrial problem, and its results could be used in analyzing any manufacturer–retailer supply chain with deteriorating items. Among others, the fruit and vegetable supply chains are more likely to have a similar setting, and this study’s results are applicable for such chains in food industry.

Research on the variable buyback contract

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tianzhuo Liu ◽  
WangBo Liu ◽  
Feng Yang
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Optimal Solution ◽  
Practical Significance ◽  
Content Type ◽  
Current Economic Situation ◽  
Buyback Contract ◽  
System Improvement

Purpose Based on the traditional buyback model, this paper aims to propose a new buyback method – the variable buyback contract – to solve the serious inventory backlog in the current economic situation. Design/methodology/approach In this paper, the authors further study the buyback problem in a two-level supply chain with uncertain demand. Such a problem can be found in many research papers, which also use the Stackelberg game model. They put forward many factors that affect the buyback price, including risk preference, random arrival of consumers, etc. Different from the existing research, the authors propose another factor that may affect supply chain buyback – the retailer's remaining inventory to study the buyback contract. Findings First, the authors found that under the variable buyback contract, there is an optimal retail price, wholesale price and an optimal range of parameter settings for the buyback price. Second, the proposed Pareto-optimal solution for system improvement can achieve supply chain coordination. Third, under some conditions, the variable buyback contract is better than the wholesale price contract and fixed-price buyback contract. Originality/value First, this is the first paper to discuss to measure the buyback price with the retailer's remaining inventory. Second, the proposed buyback contract can help decision-makers to choose the optimal improvement strategies. Third, this contract has a certain practical significance, which can effectively alleviate the current inventory backlog problem.

Game-Theoretic Analysis of Green Supply Chain Under Cost-Sharing Contract with Fairness Concerns

2020 ◽  
pp. 2050017
Author(s):  
Abhishek Sharma ◽  
Deepika Jain
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Market Price ◽  
Model Parameters ◽  
Game Theoretic Analysis ◽  
Fairness Concerns ◽  
Game Theoretic ◽  
Fairness Concern

This study investigates the fairness concerned behavior of the supply chain members in a dyadic supply chain with one manufacturer and one retailer, wherein the manufacturer puts efforts for improving the product’s greening level and sells it to the customers through the retailer. Through manufacturer-led and retailer-led Stackelberg game frameworks, the study presents two models- one in which only the manufacturer exhibits advantageous inequity averse behavior and the other in which only the retailer exhibits them. The results demonstrate the following findings: (1) the manufacturer’s profit is decreasing while product’s greening level, retailer’s and total supply chain’s profits are increasing and manufacturer’s wholesale price and retailer’s market price are nonmonotone in manufacturer’s fairness concern, (2) the wholesale price, product’s greening level, manufacturer’s profit, and total supply chain’s profit are increasing while retailer’s profit is decreasing and market price is nonmonotone in retailer’s fairness concern. In addition, the study examines the optimality of cost-sharing contract for different ranges of the model parameters. Furthermore, the findings are elucidated through the numerical analysis and managerial insights are generated.

Pricing and service decision of dual-channel operations in an O2O closed-loop supply chain

2017 ◽  
Vol 117 (8) ◽  
pp. 1567-1588 ◽  
Author(s):  
Lingcheng Kong ◽  
Zhiyang Liu ◽  
Yafei Pan ◽  
Jiaping Xie ◽  
Guang Yang
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Service Level ◽  
Return Rate ◽  
Transfer Payment ◽  
Channel Conflict ◽  
Content Type ◽  
Dual Channel

Purpose The online direct selling mode has been widely accepted by enterprises in the O2O era. However, the dual-channel (online/offline, forward/backward) operations of the closed-loop supply chain (CLSC) changed the relationship between manufacturers and retailers, thus resulting in channel conflict. The purpose of this paper is to take a dual-channel operations of CLSC as the research target, where a manufacturer sells a single product through a direct e-channel as well as a conventional retail channel; the retailer are responsible for collecting used products in the reverse supply chain and the manufacturer are responsible for remanufacturing. Design/methodology/approach The authors build a benchmark model of dual-channel price and service competition and take the return rate, which is considered to be related to the service level of the retailer, as the function of the service level to extend the model in the reverse SC. The authors then analyze the optimal pricing and service decision under centralization and decentralization, respectively. Finally, with the revenue-sharing factor, wholesale price and recycling price transfer payment coefficient as contract parameters, the paper also designs a revenue-sharing contract led by the manufacturer and explores in what situation the contract could realize the Pareto optimization of all players. Findings In the baseline model, the results show that optimal price and service level correlate positively in centralization; however, the relation relies on consumers’ price sensitivity in decentralization. In the extension model, the relationship between price and service level also relies on the relative value of increased service cost and remanufacturing saved cost. When the return rate correlates with the service level, a recycling transfer payment can elevate the service level and thus raise the return rate. Through analyzing the parameters in revenue-sharing contract, a point can be reached where lowering the wholesale price and raising the transfer payment coefficient will promote retailers to share revenue. Practical implications Many enterprises establish the dual-channel distribution system both online and offline, which need to understand how to resolve their channel conflict. The conflict is especially strong in CLSC with remanufacturing. The result helps the node enterprises realize the coordination of the dual-channel CLSC. Originality/value It takes into account the fact that there are two complementary relationships, such as online selling and offline delivery; used product recycling and remanufacturing. The authors optimize the strategy of product pricing and service level in order to solve channel conflict and double marginalization in the closed-loop dual-channel distribution network.

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.

scholarly journals A Building-Material Supply Chain Sustainable Operations under Fairness Concerns and Reference Price Benefits

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-14
Author(s):  
Huimin Xiao ◽  
Youlei Xu ◽  
Shiwei Li
Keyword(s):  
Supply Chain ◽  
Building Material ◽  
Cost Sharing ◽  
Reference Price ◽  
Dynamic Models ◽  
Stackelberg Game ◽  
Noncooperative Game ◽  
Sustainable Operations ◽  
Effort Level ◽  
Fairness Concerns

This paper incorporates fairness concerns and consumer reference price effects into a two-echelon building-material closed-loop supply chain consisting of a manufacturer and a retailer. By establishing four differential game models, we investigate the sustainable operations and cooperation of this supply chain. The four game models are a Nash noncooperative game, Stackelberg game with cost sharing, Stackelberg game with fairness concerns and cost sharing, and centralized decision model. By using dynamic models and optimal control theory, we obtain the two members’ optimal equilibrium strategies in the supply chain. Analytical results show that the consumer reference price effect has a positive impact on the manufacturer’s effort level, retailer’s publicity level, and product brand goodwill, which can improve the supply chain performance. The retailer’s partial commitment to cost sharing can enhance the production enthusiasm of the manufacturer, improve the brand reputation of the product, and enhance the two members’ individual profitability. The distributional fairness concerns of the manufacturer not only prevent the manufacturer and retailer from achieving Pareto improvement but also lead to the decline of the manufacturer’s effort level and profitability. The research conclusions of this paper can provide some insights into the cooperation and sustainable development of the supply chain.

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