Examining price and service competition among retailers in a supply chain under potential demand disruption

© 2017 Elsevier Ltd Supply chain disruptions management has attracted significant attention among researchers and practitioners. The paper aims to examine the effect of potential market demand disruptions on price and service level for competing retailers. To investigate the effect of potential demand disruptions, we consider both a centralized and a decentralized supply chain structure. To analyze the decentralized supply chain, the Manufacturing Stackelberg (MS) game theoretical approach was undertaken. The analytical results were tested using several numerical analyses. It was shown that price and service level investment decisions are significantly influenced by demand disruptions to retail markets. For example, decentralized decision makers tend to lower wholesale and retail prices under potential demand disruptions, whereas a proactive retailer needs to increase service level with an increased level of possible disruptions. This research may aid managers to analyze disruptions prone market and to make appropriate decision for price and service level. The manufacturer or the retailers will also be able to better determine when to close a market based on the proposed analysis by considering anticipated disruptions. The benefits and usefulness of the proposed approach are explained through a real-life case adopted from a toy supply chain in Bangladesh

Coordinating Dual-Channel Supply Chain Under Price Mechanism With Production Cost Disruption

This paper studies a two-stage dual-channel supply chain consisting of one manufacturer and one traditional retailer. The manufacturer has its own online channel when he sells the product to the offline retailer. There exists a Stackelberg game between the manufacturer and the offline retailer, in which the manufacturer is the leader and the retailer is the follower. The manufacturer abandons the pricing right in the online channel and adopts the marketing strategy which the online retail price is equal to the offline one. When the supply chain is in a static (undisrupted) condition, it can obtain Pareto improvement and eventually be coordinated by a two-part-tariff contract with a one-time transfer payment. When disruptions make the manufacturer’s unit production cost change, we can obtain the retail price, the production quantity and the total supply chain profit under different disruption levels in the centralized supply chain. Then, we find that there are some certain robustness both in the manufacturer’s production quantity and in the offline retail price. When the supply chain is decentralized, we can coordinate the supply chain by changing the wholesale price according to different disruption levels. Finally, some numerical examples are presented to illustrate the results

Risk Decision for Dual-Channel Supply Chain of Agricultural Products Under Disturbance

This paper presents a decision analysis model for the dual-channel supply chain of agricultural products under the disturbance of emergency. Mean variance analysis tool and utility function risk tool are used to describe risk indicators in supply chain. In this study, retailer plays a leading role in agricultural supply chain. By means of the Kuhn-Tucker condition of the retailer’s maximum utility, the optimal price and optimal demand are obtained. The study also shows that risk averse retailer has higher wholesale price, lower retail price and greater supply as well as the demand for the pursuit of greater utility; Supplier has a certain robustness to the sudden event disturbance, when the disturbance is large, the quantity of initial supply quantity will be adjusted. The relationship between the demand change rate of the two channels and the market share of the channel is found. Finally, some numerical examples are presented to illustrate the results. The study provides a possible way of thinking in emergency decision analysis

Coordination mechanism of dual-channel supply chains considering retailer innovation inputs

In response to the online channels established by manufacturers, physical retailers are starting to offer innovative services, which will intensify conflicts between manufacturers and retailers. Considering that the conflict will affect the operation efficiency and sustainable development of the supply chain, the coordination mechanism of a dual-channel supply chain has been established. In this study, we construct the Stackelberg game model based on consumer utility theory to analyze the complex mechanism of retailers' innovation input level affecting supply chain operation and design the double coordination mechanism. The results show that: (1) an optimal combination of wholesale prices, retail prices and innovation input levels can optimize the operational efficiency of the supply chain, (2) Noncooperation among channel members affects the retailer's product pricing, decreases the market share of the physical channel and increases the market demand of manufacturers, (3) The dual coordination mechanism can alleviate channel conflicts, which can improve the operational efficiency of the supply chain. This study provides several insights on the theory of organizational coordination and sustainable development in conflicts of dual-channel supply chains

Blockchain-driven dual-channel green supply chain game model considering government subsidies

In order to improve the performance of green supply chain and promote the adoption of blockchain, this paper establishes a dual-channel green supply chain consisting of a green manufacturer and a retailer, and builds Stackelberg game model considering different scenarios. We analyze the impact of blockchain operating costs and consumer uncertainty about the product greenness. Furthermore, we study the government subsidy for manufacturers' green costs and its impact on supply chain performance and blockchain adoption. Findings reveal that without blockchain technology, government subsidy can improve manufacturers' and retailers' profits. However, when blockchain is adopted, the subsidy effect depends on the blockchain operating costs. In case of higher blockchain operating cost, the product prices and greenness decrease as the green cost subsidies increase; In case of lower blockchain operating cost, the increase in green cost subsidies will lead to increased product prices and greenness; Green cost subsidies can raise profits and lower the blockchain adoption threshold

Pricing Dengan Mempertimbangkan Risiko Online Channel Dalam Dual Channel-Supply Chain

Era globalisasi mendorong berkembangnya sistem dual-channel supplychain (DCSC). Sistem ini memungkinkan manufaktur untuk mendistribusikan produk melalui retailer maupun fasilitas online secara simultan. Sistem DCSC memberikan manfaat peningkatan volume penjualan dan market reach secara bersamaan kepada entitas bisnis yang menerapkannya. Namun, disamping manfaat, DCSC juga memiliki konsekuensi operasional berupa risiko, terutama risiko yang timbul dari online channel. Salah satu cara yang dapat dilakukan untuk mengefektifkan DCSC adalah dengan penerapan pricing yang komprehensif. Pricing digunakan untuk menentukan harga jual optimal untuk tiap entitas/channel dan memaksimalkan keuntungan dari sudut pandang channel secara individu maupun dari sudut pandang DCSC sebagai suatu sistem. Keputusan pricing merupakan keputusan yang melibatkan banyak pertimbangan. Ada beberapa penelitian yang mencoba mengakomodasi beberapa hal penting dalam model yang diusulkan. Namun, hanya sedikit penelitian yang menaruh perhatian pada masalah risiko. Adanya keterlibatkan beragam risiko dan konsekuensi yang cukup kompleks, khususnya pada online channel, membuat permasalahan risiko ini menarik untuk diteliti. Penelitian ini memodelkan kebijakan pricing yang mempertimbangkan risiko. Risiko-risiko seperti sales return, perpindahan demand akibat lead time pada online sales, penerapan cash on delivery (COD) dan customer acceptance kepada channel online adalah problem yang menarik untuk diamati lebih mendalam. Hasil percobaan numerik dari model yang dikembangkan menunjukkan bahwa harga jual produk pada online channel menjadi lebih tinggi pada model yang mempertimbangkan risiko. Namun demikian, harga jual online channel yang lebih tinggi ini akan lebih menguntungkan pada konkondisi dimana tingkat penerimaan konsumen pada online channel sangat rendah. ========== The globalization era encourages the adoption of dual-channel supplychain (DCSC). This system enables manufacturing for distributing products through retailers and facilities online simultaneously. DCSC system offers benefits in term of increasing both sales volume and market reach to business entities. However, DCSC also brings a number challenges such as operational risk, especially in online channel. One way that can be done to make DCSC effective is the implementation of comprehensive pricing. Pricing is used to determine the optimum selling price for each entity/channels and to maximize profits from the channel perspective as an individual and from the DCSC point of view as a system. Pricing decision is a step that involves many considerations. There are some researches which tryied to accommodate some important issues by proposing related models. However, only few of them drew attention to the risk. The various risks and consequences that quite complex, especially in online channel. Risk problems in DCSC are very interesting to be observed. The risks such as sales return, lead time in online sales, application of cash on delivery (COD) and customer acceptance to channel online are problems which are interesting to observe deeply. Thus, in this research proposes a model accommodating the calculation of risk in online channel to determine a more comprehensive selling prices in DCSC system. The results showed, the model with considering the risks of online channel makes the selling price of the product on the online channel above the price of the online channel on the model without considering the risks. In addition, it is known that the model with the risks consideration more favorable if the level of consumer acceptance to online channel is very low

Pricing Decisions of a Dual-Channel Supply Chain considering Supply Disruption Risk

Supply disruption may cause strong complaints of customers, which is a cost loss for the firms in the supply chain. Obviously, if realizing that there is the disruption risk, the members in a supply chain will adjust their decisions. For analyzing the influence, we consider a popular supply chain mode with dual channels, where one manufacturer has its direct sales channel and one traditional retailer channel. The manufacturer may suffer a supply disruption so that all ordered products by the retailer or the direct retail channel will be lost, and the members in supply chain will bear the corresponding disruption penalty from the customers. By considering four structures with different market power relations, the closed-form optimal price decisions of the four models are given. We found that the disruption factor improves the sales prices for any member structure as compared to the supply chain without the disruption. And the direct retail prices in the different modes are the same as each other, but the price of the traditional channel is influenced by the market share. And the sorts of the sales prices under different structures are given. We also conduct some extensive numerical analysis and compare the results under different structures. We observe that the expected optimal profits of considering the external penalty are smaller than those of no external penalty, and we give a sort of the optimal expected profits. And we also provide the effects of some parameters on the optimal decisions and the optimal expected profits

Online channel operation mode: game theoretical analysis from the supply chain power structures

Purpose: Dual-channels have been widely used in practice, and the pricing decisions and the online channel operation mode choice have been the core problems in dual-channel supply chain management. This paper focuses on the online channel operation mode choice from the supply chain power structures based on game theoretical analysis. Design/methodology/approach: This paper utilizes three kinds of game theoretical models to analyze the impact of supply chain power structures on the optimal pricing and online channel operation mode choice. Findings: Results derived in this paper indicate that when the self-price elasticity is large, the power structures have no direct impact on the decisions. However, when the self-price elasticity is small and customers’ preference for the online channel is low, then in the MS market, it is better for the retailer to operate the online channel, while in the RS market or in the VN market, it is better for the manufacturer to operate the online channel. Research limitations/implications: In this paper, we do not consider stochastic demand and asymmetric information, which may not well suit the reality. Originality/value: This paper provides a different perspective to analyze the impact of supply chain power structures on the pricing decisions and online channel operation mode choice. The comparison of these two online channel operation modes in this paper is also a unique point.Peer Reviewe

Sustainable supply chain management towards disruption and organizational ambidexterity:A data driven analysis

Balancing sustainability and disruption of supply chains requires organizational ambidexterity. Sustainable supply chains prioritize efficiency and economies of scale and may not have sufficient redundancy to withstand disruptive events. There is a developing body of literature that attempts to reconcile these two aspects. This study gives a data-driven literature review of sustainable supply chain management trends toward ambidexterity and disruption. The critical review reveals temporal trends and geographic distribution of literature. A hybrid of data-driven analysis approach based on content and bibliometric analyses, fuzzy Delphi method, entropy weight method, and fuzzy decision-making trial and evaluation laboratory is used on 273 keywords and 22 indicators obtained based on the experts’ evaluation. The most important indicators are identified as supply chain agility, supply chain coordination, supply chain finance, supply chain flexibility, supply chain resilience, and sustainability. The regions show different tendencies compared with others. Asia and Oceania, Latin America and the Caribbean, and Africa are the regions needs improvement, while Europe and North America show distinct apprehensions on supply chain network design. The main contribution of this review is the identification of the knowledge frontier, which then leads to a discussion of prospects for future studies and practical industry implementation