scholarly journals Inter-organizational contract control of advertising strategies in the supply chain

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Yafei Zu
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Dynamic Effect ◽  
Sensitivity Analyses ◽  
Pricing Strategies ◽  
Stackelberg Differential Game ◽  
Contract Choice ◽  
Advertising Effort ◽  
Advertising Strategies ◽  
Contract Selection

<p style='text-indent:20px;'>Advertising has a crucial impact on a product's goodwill. To further improve a product's goodwill and make more profit, member firms in the supply chain use various contracts to coordinate the channel. Considering the dynamic effect of advertising, this paper studies a two-level supply chain consisting of one manufacturer and one retailer. The two members focus on maximizing their profits through advertising and pricing strategies under two types of contracts: the wholesale price contract and the consignment contract. The Stackelberg differential game is introduced, and the optimal advertising effort, wholesale and retail pricing strategies in the two situations are studied. Numerical examples and sensitivity analyses are conducted to explore the models further. The results show that the retailer's revenue proportion and the product's goodwill according to consumers significantly affect the strategies and the contract choice of the partner firms in the supply chain. A proportion of too high or too low revenue may lead to a contract selection conflict between the two partner firms. However, when consumers care more about the product's goodwill, this contract selection conflict can be weakened.</p>

scholarly journals Risk-Averse Suppliers’ Optimal Pricing Strategies in a Two-Stage Supply Chain

2013 ◽  
Vol 2013 ◽  
pp. 1-11 ◽  
Author(s):  
Rui Shen ◽  
Zhiqing Meng ◽  
Xinsheng Xu ◽  
Min Jiang
Keyword(s):  
Supply Chain ◽  
Loss Function ◽  
Wholesale Price ◽  
Competitive Environment ◽  
Optimal Pricing ◽  
Risk Averse ◽  
Pricing Strategies ◽  
Two Stage ◽  
Future Loss

Risk-averse suppliers’ optimal pricing strategies in two-stage supply chains under competitive environment are discussed. The suppliers in this paper focus more on losses as compared to profits, and they care their long-term relationship with their customers. We introduce for the suppliers a loss function, which covers both current loss and future loss. The optimal wholesale price is solved under situations of risk neutral, risk averse, and a combination of minimizing loss and controlling risk, respectively. Besides, some properties of and relations among these optimal wholesale prices are given as well. A numerical example is given to illustrate the performance of the proposed method.

scholarly journals Myopic versus Farsighted Behaviors in a Low-Carbon Supply Chain with Reference Emission Effects

Complexity ◽  
2019 ◽  
Vol 2019 ◽  
pp. 1-15 ◽  
Author(s):  
Jun Wang ◽  
Xianxue Cheng ◽  
Xinyu Wang ◽  
Hongtao Yang ◽  
Shuhua Zhang
Keyword(s):  
Supply Chain ◽  
Emission Reduction ◽  
High Price ◽  
Pricing Strategies ◽  
Low Carbon ◽  
Emission Permit ◽  
Carbon Supply ◽  
Permit Price ◽  
Stackelberg Differential Game ◽  
Behavior Choice

The increased carbon emissions cause relatively climate deterioration and attract more attention of governments, consumers, and enterprises to the low-carbon manufacturing. This paper considers a dynamic supply chain, which is composed of a manufacturer and a retailer, in the presence of the cap-and-trade regulation and the consumers’ reference emission effects. To investigate the manufacturer’s behavior choice and its impacts on the emission reduction and pricing strategies together with the profits of both the channel members, we develop a Stackelberg differential game model in which the manufacturer acts in both myopic and farsighted manners. By comparing the equilibrium strategies, it can be found that the farsighted manufacturer always prefers to keep a lower level of emission reduction. When the emission permit price is relatively high, the wholesale/retail price is lower if the manufacturer is myopic and hence benefits consumers. In addition, there exists a dilemma that the manufacturer is willing to act in a farsighted manner but the retailer looks forward to a partnership with the myopic manufacturer. For a relatively high price of emission permit, adopting myopic strategies results in a better performance of the whole supply chain.

Equal Pricing Strategies in a Dual Channel Supply Chain

2013 ◽  
pp. 230-249 ◽  
Author(s):  
Ue-Pyng Wen ◽  
Yun-Chu Chen ◽  
Kam-Hong Cheung
Keyword(s):  
Supply Chain ◽  
Service Quality ◽  
Wholesale Price ◽  
Retail Price ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Cooperative Strategy ◽  
Dual Channel ◽  
Dual Channel Supply Chain

In this article, equal pricing strategies are studied in a dual channel supply chain where a manufacturer sells to a retailer as well as to consumers through a direct channel according to the assumption that the manufacturer commits setting the same retail price as the traditional channel to reduce the channel’s conflict. The authors first analyze the effect of different pricing strategies on the retail price, wholesale price and profits. The cooperative strategy is also studied to see how it benefits both parties in the dual channel supply chain. Finally, through a numerical example, it is demonstrated that providing convenience of the direct channel is important for the manufacturer and service is a distinctive advantage for the retailer. Furthermore, the paper shows that if the service quality has a significant effect on the direct channel, then the manufacturer tends to abandon commitment of equal pricing strategy.

Equal Pricing Strategies in a Dual Channel Supply Chain

2011 ◽  
Vol 2 (4) ◽  
pp. 34-51 ◽  
Author(s):  
Ue-Pyng Wen ◽  
Yun-Chu Chen ◽  
Kam-Hong Cheung
Keyword(s):  
Supply Chain ◽  
Service Quality ◽  
Wholesale Price ◽  
Retail Price ◽  
Pricing Strategy ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Cooperative Strategy ◽  
Dual Channel ◽  
Dual Channel Supply Chain

In this article, equal pricing strategies are studied in a dual channel supply chain where a manufacturer sells to a retailer as well as to consumers through a direct channel according to the assumption that the manufacturer commits setting the same retail price as the traditional channel to reduce the channel’s conflict. The authors first analyze the effect of different pricing strategies on the retail price, wholesale price and profits. The cooperative strategy is also studied to see how it benefits both parties in the dual channel supply chain. Finally, through a numerical example, it is demonstrated that providing convenience of the direct channel is important for the manufacturer and service is a distinctive advantage for the retailer. Furthermore, the paper shows that if the service quality has a significant effect on the direct channel, then the manufacturer tends to abandon commitment of equal pricing strategy.

PRICING DECISIONS FOR A CLOSED-LOOP SUPPLY CHAIN IN A FUZZY ENVIRONMENT

2012 ◽  
Vol 29 (01) ◽  
pp. 1240003 ◽  
Author(s):  
JIE WEI ◽  
JING ZHAO ◽  
YONGJIAN LI
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Retail Price ◽  
Economic Behavior ◽  
Optimal Pricing ◽  
Pricing Strategies ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions ◽  
Fuzzy Environment

This paper studies pricing problem for a closed-loop supply chain consisting of a manufacturer and a retailer in a fuzzy environment. The purpose of this paper is to explore how the manufacturer makes his decisions about wholesale price and transfer price and how the retailer makes her decisions about retail price and collecting price in the expected value standard. Each firm's optimal pricing strategies are established by using game theory under the centralized and decentralized decision cases, respectively. Managerial insights into the economic behavior of firms are also investigated, which can serve as the basis for empirical study in the future. Moreover, we analyze numerically the results and give some insights on the influence of some parameters.

scholarly journals Modelling cooperative advertising decisions in a manufacturer-distributor-retailer supply chain using game theory

2020 ◽  
Vol 30 (2) ◽  
pp. 147-176
Author(s):  
Peter Ezimadu
Keyword(s):  
Game Theory ◽  
Supply Chain ◽  
Optimal Strategy ◽  
Cooperative Advertising ◽  
Subsidy Rate ◽  
Differential Game Theory ◽  
Advertising Effort ◽  
Advertising Strategies ◽  
Channel Structures ◽  
Stackelberg Leader

This work considers cooperative advertising decisions in a manufacturer-distributor-retailer supply chain, where the manufacturer is taken as the Stackelberg leader, using differential game theory. The distributor and retailer are the first and the second followers, respectively. We introduce the distributor into the traditional manufacturer-retailer channel through his direct involvement in advertising as being incorporated into the non-stochastic Sethi's sales-advertising dynamics. This is used to model the awareness share dynamics in which the distributor and the retailer directly engage in advertising, while the manufacturer bypasses the distributor to subsidise only the retail advertising effort. We consider a subsidised and unsubsidised channel structures, where each structure results in a system of three nonlinear equations, which cannot be solved analytically, but only numerically. However, we show that the unique solution to each of the systems exists, provided certain conditions are satisfied. The distributor and the retailer's advertising strategies are developed for both when subsidy is provided and when it is not provided. We also obtain the manufacturer's subsidy rate and the market awareness share for both when retail advertising is subsidised and when it is not subsidised. We observe that with the provision of subsidy, the distributor reduces his advertising effort. However, the resulting increase in the retail advertising effort is larger than the reduction in the distributor's advertising commitment, thus making the channel advertising effort larger with subsidy. It further shows that to avoid being shortchanged, each player should adopt only his optimal strategy or strategies as the case may be.

scholarly journals Myopic versus Far-Sighted Behaviors in Dynamic Supply Chain Coordination through Advertising with Reference Price Effect

2017 ◽  
Vol 2017 ◽  
pp. 1-15 ◽  
Author(s):  
Yafei Zu ◽  
Lianghua Chen
Keyword(s):  
Supply Chain ◽  
Reference Price ◽  
Stackelberg Game ◽  
Supply Chain Coordination ◽  
Wholesale Price ◽  
Pricing Strategies ◽  
Market Demand ◽  
Price Effect ◽  
Theoretical Support ◽  
Behavior Choice

To better understand the different effects of the myopic and far-sighted behaviors on the advertising coordination in dynamic supply chain, this paper takes the reference price effect into consideration and formulates four differential game models for the two-level supply chain composed of a manufacturer and a retailer in the situation of Stackelberg game. In our models, the market demand is assumed to be affected by the goodwill, reference price, and the advertising investment, in which the advertising investment can promote the construction of goodwill and such goodwill can further enhance the reference price. The results show that the participating members in the supply chain should invest more in advertisement to improve the goodwill and the relative reference price reflected in the minds of consumers. A far-sighted manufacturer will invest more in the advertisement and charge a higher wholesale price regardless of the behavior choice of the retailer. However, such kind of ignorance leads to different results on the retail pricing strategies of the retailer. The numerical analyses are given in the end to verify the effectiveness of the conclusions which provide the theoretical support to the dynamic supply chain coordination in practice.

Two-period pricing strategies in a two-echelon supply chain with conspicuous consumption

2019 ◽  
Vol 53 (2) ◽  
pp. 667-685 ◽  
Author(s):  
Rongjing Zhu ◽  
Musen Xue
Keyword(s):  
Supply Chain ◽  
Numerical Study ◽  
Wholesale Price ◽  
Conspicuous Consumption ◽  
Selling Price ◽  
Pricing Strategies ◽  
Pricing Model ◽  
Single Product ◽  
Pricing Options ◽  
Stackelberg Leader

This paper investigates the problem of pricing strategies in a two-echelon supply chain with conspicuous consumers. We develop a two-period pricing model for the supply chain which is consisted of one manufacturer and one retailer who involve in trading a single product. The manufacturer being a Stackelberg leader, decides the wholesale price, the retailer acts as a follower and sets the selling price. As a leader, the manufacturer has two pricing options: (1) sets a common wholesale price for the entire selling season; (2) sets two different wholesale prices for the two selling periods respectively. Based on the manufacturer’s pricing options, we develop four pricing cases considering the effect of conspicuous consumption and compare the equilibrium outcomes. In addition, we study the impacts of the main parameters on the equilibrium results under different cases in the numerical study and obtain some managerial insights.

scholarly journals Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

2020 ◽  
Vol 2020 ◽  
pp. 1-19
Author(s):  
Yifei Hao ◽  
Wei Chen ◽  
Hong Yang
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Incentive Contracts ◽  
Retail Price ◽  
Incentive Contract ◽  
Dynamic Setting ◽  
Stackelberg Differential Game ◽  
Collaborative Innovation ◽  
The One ◽  
The Cost

The collection and sharing of consumers’ knowledge by retailers can help manufacturers improve the innovation level of products, thereby improving the performance of supply chain. However, due to the cost of collecting consumers’ knowledge, the wholesale price contract can no longer coordinate supply chain members effectively. It is necessary to study the problem how the retailers are encouraged to make more efforts for the cooperative innovation with manufacturers. This paper introduces two dynamic incentive contracts for improving collaborative innovation level in a two-player supply chain, and the impacts of these contracts on supply chain’s performance are investigated, by using a Stackelberg differential game model. The manufacturer, as a Stackelberg leader, determines the R&D investment while the retailer is responsible for the retail price and the efforts in collection of the consumer’s information (or preference) to the products. The model incorporates a wholesale price contract and two incentive contracts to better understand how the manufacturer can facilitate the retailer’s efforts in the collection of consumer’s information and increase the profits of the members of supply chain. Our results suggest that the optimal profit of the supply chain, the retailer’s efforts in the collection of consumer’s knowledge, the retail price, and the innovation level under the reward incentive contract are higher than their counterparts in other contracts. In particular, the retailer’s optimal effort under the reward incentive contract is even higher than the one in the centralized decision scenario. However, if the manufacturer commits an effort target to the retailer, it shows that the retailer’s optimal effort is independent of the target. The manufacturer’s optimal R&D investments are constants in the three contracts under the dynamic setting. Furthermore, numerical simulations show that the effort target has little impact on profits of the supply chain although it affects the decision making of supply chain members to some extent, whereas the retailer’s marginal reward offered by the manufacturer influences the innovation level of product and the supply chain’s profit significantly.

scholarly journals Supply Chain Contract Choice with Different Behavior Preferences of Retailer

2021 ◽  
Vol 2021 ◽  
pp. 1-9
Author(s):  
Yonglong Wang ◽  
Xinyu Zheng ◽  
Jirong Cai ◽  
Yuelong Zheng
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Demand Uncertainty ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Supply Chain Contract ◽  
Contract Choice ◽  
Revenue Sharing Contract ◽  
Risk Neutral ◽  
Behavioral Preferences

Retailer may exhibit irrationality when facing the risk of demand uncertainty; therefore, we consider four retailer behavioral preferences: risk neutral (RN), waste aversion (WA), stockout aversion (SA), and stockout-waste aversion (SW). The decision-making and contract choice of upstream and downstream enterprises in cases where demand depends on supplier’s effort are studied. The results show that if the retailer has only SA or RN preferences, then the supplier prefers to choose a wholesale price contract, while the retailer does the opposite, if the retailer has only WA, then the supplier prefers to choose a revenue sharing contract, but the retailer’s contract choice depends on the degree of waste aversion, and if the retailer has SW, then the contract choice of upstream and downstream enterprises is related to the degree of waste aversion and stockout aversion.

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