Abstract
Today’s marketing competition focuses on the supply chain members to make its own interests maximize through cooperation. This article establishes a simple secondary supply chain consisting of a retailer and a manufacturer. Through the establishment of a Stackelberg game model and a partnership game model, we study the decision of the member enterprises in the supply chain under the restriction of capacity. The research results show that if the production capacity is smaller, the manufacturer will choose full-load production. If the production capacity is sufficient, the manufacturer will no longer produce more products because its profit may be lost. The lack of production capacity makes the manufacturer not take the initiative to share the advertising costs of retailers. But when the capacity is sufficient, the manufacture shares 1/3 of advertising costs. In addition, whether manufacturers and retailers choose to cooperate in the case of a small capacity, the profit of the supply chain will not change.
Highlights
In 2017, the overall advertising market in China showed a stepwise growth
Through the establishment of a Stackelberg game model and a partnership game model, we study the decision of the member enterprises in the supply chain under the restriction of capacity
Through the establishment of a supply chain model based on cooperative advertising, the supply chain model is established to consider the unconstrained and constrained conditions respectively to analyze the production capacity, and the impact of advertising on the outcomes of each member of the supply chain and the overall supply chain
Summary
In 2017, the overall advertising market in China showed a stepwise growth. the market in the first eight months has steadily increased, it is still in a downward trend compared to 2016. The rapid growth of new industries, new formats, and new products, the rapid development of the consumer market, and the continuous improvement of consumer spending have all contributed to the increase in advertising demand. Each member of the supply chain begins to break through the boundaries of traditional enterprises and seek cooperation They combine their unique advertising resource advantages and effectively integrate them, thereby promoting the production and sales of products and achieving complementary advantages, risk sharing, and benefit-sharing, and improve the entire supply chain competitiveness. In this context, retailers downstream of the supply chain put in advertising, and manufacturers in the upstream of the supply chain share some or all of the costs of advertising. In the process of business operations, products are often unable to achieve unlimited production or sales due to various reasons, such as constraints on capital, labor shortage, low technological level, lagging production methods, insufficient supply of raw materials, etc., thereby limiting the highest performance, there is a problem of capacity constraints
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