Channel Power Structures Research Articles

Closed-loop supply chain decision making and coordination considering channel power structure and information symmetry

China is currently undergoing a phase of high-quality development, with increasing emphasis on the circular economy, energy conservation, and environmental protection by both the government and enterprises. This paper examines a secondary supply chain comprising manufacturers and retailers, focusing on three supply chain decision-making models: one where the manufacturer is the channel leader, one where the retailer is the channel leader, and one where both parties have equal power. The study investigates the impact of manufacturers misrepresenting their Corporate Social Responsibility (CSR) information and the challenges associated with recycling efforts on the optimal performance of the supply chain. The findings reveal that when manufacturers lead the supply chain, they do not misrepresent their private information. However, when retailers dominate, manufacturers tend to underreport their CSR levels and the difficulty of recycling efforts. In scenarios where manufacturers and retailers have equal power, manufacturers do not misreport the difficulty of recycling but do underreport their CSR levels. This misreporting benefits the manufacturers at the expense of retailers and overall supply chain profitability, while also discouraging the recycling of used products. Across all three power structures, the study shows that retailers’ marketing efforts decrease as the misrepresentation of recycling difficulty increases, and increase as the misrepresentation of CSR levels increases. To mitigate the effects of manufacturers’ misreporting under information asymmetry, the paper proposes revenue-sharing contracts and two-part pricing contracts to coordinate the closed-loop supply chain under different power structures. Both contracts are shown to achieve Pareto improvements within the supply chain. This research provides valuable insights for enterprises operating within closed-loop supply chains, highlighting the importance of enhancing communication and cooperation to bridge information gaps and ensuring the coordina.

Optimal decisions of elderly care service supply chain with government intervention

Government intervention plays an indispensable role in the development of the elderly care service supply chain (ECSSC). However, no research has focused on the optimal decision-making of the ECSSC considering government intervention under different channel power structures. This study establishes a three-stage ECSSC model, including the government sector, elderly care service provider and elderly care service integrator, while considering different government intervention measures and channel power structures. The service-level elasticity coefficient is defined as an uncertain variable, that can affect service demand and ESI service costs. This study explores the optimal decisions and market performance of the government and ECSSC under different channel power structures and government intervention, providing guidance for the ECSSC development and government decision-making. The results show that, first, government intervention is beneficial for the ECSSC, customers, and social welfare. Compared with the subsidy and service-level regulation scenario, only the former is beneficial for the supply chain, social welfare, and unit customer expenditure, but at the cost of lower service level and higher government expenditure. Second, different channel power structures do not affect service level, social welfare, and unit customer expenditure. However, the ESI-dominated structure favors ECSSC development. Third, the setting of the reward-penalty factor should not be too high, as, in this case, supply chain members, customers, and social welfare will benefit from the increased expected value of service level elasticity. At last, managerial insights are presented.

Platform service decision and selling mode selection under different power structures

PurposeThis paper forms an e-commerce supply chain that include a manufacturer providing products and an online platform providing service. The reselling platform mode and the agent platform mode are considered through an exploration of the manufacturer Stackelberg (MS), vertical Nash (VN), platform Stackelberg (PS) power structures. The purpose of this paper is to explore the pricing and platform service decisions under different platform selling modes and channel power structures.Design/methodology/approachBased on the game theory models, this paper investigates the interaction between the manufacturer and the online platform under four different scenarios. The optimal solutions of four models are provided. Through comparison analyses, this paper evaluates the impacts of platform selling mode and channel power structure on the pricing and platform service decisions and the members’ profits.FindingsThe manufacturer prefers the MS power structure in any platform mode. The online platform prefers the PS (MS) power structure under a low (high) service cost efficiency in the reselling platform mode, while prefers the PS and VN power structures in the agent platform mode. Moreover, the manufacturer prefers the agent (reselling) platform mode under a low (high) service cost efficiency in any power structure. The online platform prefers the reselling platform mode in the MS and PS power structures, while prefers the reselling (agent) platform mode under a low (high) service cost efficiency in the VN power structures.Originality/valueThe analysis result provides important managerial implications that help the supply chain members develop a better understanding of the selection of the platform selling mode and the effect of the channel power structure in the presence of platform service.

Green Investment Decisions and Coordination in a Green Agri-Product Supply Chain considering Risk Aversion and Bargaining Power under Different Channel Power Structures

With eco-friendly green agriculture becoming the development trend of modern agriculture, how to make green investments and how to coordinate the supply chain become the key issues of agricultural green development. Using game theory and optimization theory, this paper studies the green investment decision in a two-echelon agricultural supply chain composed of a risk-averse farmer and a risk-neutral retailer under different power structures including three kinds of decentralized decision making and three kinds of cooperative decision making and conducts the supply chain coordination based on generalized Nash bargaining model. The results show that under decentralized decision making, Nash vertical, farmer-led, and retailer-led maximizes green investment level, the expected utility of farmer and retailer, respectively. In addition, the cooperative decision increases the marginal revenue, sales price, and the expected utility of the retailer and decreases the expectations of farmers. Except for retailer-led cooperative decisions, all cooperative decisions have increased the level of green investment and wholesale prices; among the six decision models, the green investment level is negatively correlated with risk aversion, while it is positively correlated with the cost-sharing contract. The optimal cost-sharing ratio is positively correlated with risk aversion and bargaining power. The cost-sharing contracts are invalid when farmers have full bargaining power. Numerical analysis shows that a cost-sharing contract with equal bargaining power can achieve perfect coordination in the supply chain.

External financing, channel power structure and product green R&D decisions in supply chains

PurposeThis study aims to focus on the optimal green R&D of a capital-constrained supply chain under different channel power structures as well as the impact of capital constraint, financing cost, channel power structure and cost-reducing efficiency on green R&D and supply chain profitability.Design/methodology/approachA two-echelon supply chain is considered. The upstream firm engages in green R&D but has capital constraints that can be overcome by external financing. Green R&D is beneficial to reduce production costs and increase consumer demand. Based on whether or not the upstream firm is capital constrained and dominates the supply chain, four models are developed.FindingsCapital constraints significantly lower green R&D and supply chain profitability. Transferring leadership from the upstream to the downstream firms leads to higher green R&D levels and downstream firm profitability, whereas the upstream firm's profitability is increased (decreased) if green R&D investment efficiency is high (low) enough. Greater financing costs reduce green R&D and downstream firm profitability; however, the upstream firm's profitability under the model in which it functions as the follower increases if the initial capital is sufficient. More importantly, empirical analysis based on practice data is used to verify the theoretical results reported above.Practical implicationsThis study reveals how upstream firms in supply chains decide green R&D decisions in situations with capital constraints, providing managers and governments with an understanding of the impact of capital constraint, channel power structure, financing cost and cost-reducing efficiency on supply chain green R&D and profitability.Originality/valueThe major contributions are the exploration of supply chain green R&D by taking into consideration channel power structures and cost-reducing efficiency and the validation of theoretical results using practice data.

Pricing decisions during panic buying and its effect on a dual-channel supply chain under different channel power structures

Pricing decisions during panic buying and its effect on a dual-channel supply chain under different channel power structures

Modelling low-carbon closed-loop supply chain considering channel power structures and cross-shareholding

Under the background of low-carbon economy, cross-shareholding is introduced into the low-carbon closed-loop supply chain (CLSC) composed of a manufacturer and a retailer, a centralized and three decentralized decision-making models with different channel power structures are constructed. The recovery, emission reduction, and pricing decisions of low-carbon CLSC are studied, and a two-part-tariff contract is proposed to coordinate the low-carbon CLSC. The results indicate that under three channel power structures, the improvement of the cross-shareholding ratio and consumers’ low-carbon awareness are beneficial to improve recovery rate, carbon emission reduction and increase market demand. Under Nash Game, the profit of low-carbon CLSC can reach the centralized level which means cross-shareholding can realize the coordination of low-carbon CLSC. Under Stackelberg Game, the enterprise with larger channel power can always obtain higher profit. Cross-shareholding cannot coordinate the retailer-led low-carbon CLSC, however it can realize the partial coordination of the manufacturer-led low-carbon CLSC. Two-part-tariff contract can realize the coordination of low-carbon CLSC under both situations.

Operation strategy for new energy vehicle enterprises based on dual credit policy

<p style='text-indent:20px;'>This article constructs a two-stage supply chain consisting of a manufacturer (producing both fuel vehicles (FV) and new energy vehicles) and a retailer (selling both fuel vehicles and new energy vehicles) based on dual credit policy, considers three different power structure models, including the vertical Nash game model, the manufacturer Stackelberg game model, the retailer Stackelberg game model, and explores the operational strategy issues of new energy vehicle (NEV) enterprises under the dual credit policy. By comparing the optimal equilibrium solutions under different channel power structures, our findings indicate that (1) When the demand function is linear, the vertical Nash game model can achieve the highest system profit of the automotive supply chain, and in the manufacturer Stackelberg game model, the profit of the automaker is higher than that of the retailer, while in the retailer Stackelberg game model, the profit of the automaker is lower than that of the retailer. (2) The demand and pricing for FV and NEV in different models are determined by the range of FV and NEV production costs, credit trading prices, and the proportion of NEV credits. (3) Both the increase in the credit trading prices and the proportion of NEV credits will promote increased profits for the manufacturer and retailer. (4) The increase of the price sensitivity coefficient will reduce the demand as well as the profit of auto supply chain members.</p>

Effects of channel power structures on pricing and service provision decisions in a supply chain: A perspective of demand disruptions

This paper investigates the service investment and pricing decisions under different power structures when there exist demand disruptions. We consider a supply chain consisting of a single manufacturer and a single retailer, and establish a game theory model under three typical channel power structures: Manufacturer Stackelberg game, Retailer Stackelberg game, and Nash game. We find that when the demand is disrupted, whether it is a centralized system or decentralized system with different power structures, the service level and production quantity are robust when the demand disruption is sufficiently small, and the wholesale price is also robust under certain circumstance. The comparison results of equilibrium pricing and service level under different power structures are affected by the supply chain power and service cost coefficient no matter who provides the demand-enhancing services. Moreover, it can be found that the power structure most suitable for the manufacturer or the retailer is not invariable and the results are related to the change of some parameters.

Study on the complexity of channel pricing game in showrooming O2O supply chain

An O2O supply chain consisting of a manufacturer with an online direct channel and a retailer who resells through a brick-and-mortar store is considered. Three channel power structures (vertical Nash, manufacturer Stackelberg, and retailer Stackelberg) and three pricing sequences (simultaneous pricing, manufacturer pricing early, retailer pricing early) are considered. Counter-intuitively, under the manufacturer Stackelberg structure, the retailer has a first-mover advantage and retailer-pricing-early achieves Pareto optimality. In the other cases, the manufacturer and the retailer have a late-mover advantage. Under the vertical Nash structure, both parties may get into a prisoner’s dilemma. Extending the basic model to dynamic pricing, we found that the first mover of sequential pricing has better stability. The retailer Stackelberg structure has better stability than the vertical Nash structure and the manufacturer Stackelberg is the most unstable power structure. To avoid the negative impact of equilibrium price instability, the vertical and horizontal price matching mechanisms are proposed and the effectiveness in improving stability is proved.

Competitive sustainable processes and pricing decisions in omnichannel closed-up supply chains under different channel power structures

In recent years, omnichannel retailing and remanufacturing issues have rapidly emerged in the closed-loop supply chain (CLSC). The omnichannel is a combination of online and in-store retailing, and it affects supply chain relationships and channel power structures by changing value creation processes. It allows consumers a hybrid shopping experience where they can order products online and pick them up in the store or test in-store and buy online (TSBO). Despite this practice, no studies exist on CLSC considering omnichannel retailing under different channel power structures. We investigate the TSBO retailing strategy and its impact on CLSC profit considering price competition between manufacturer and remanufacturer under Manufacturer Stackelberg (MS), Retailer Stackelberg (RS), Vertical Nash (VN), and cooperation (CO) models game settings. In this paper, mathematical models are developed to drive the optimal solution. A two-part tariff coordination mechanism (i.e., IS model) is also used to integrate all supply chain members. The proposed models examine the environmental and social welfare benefits of adopting green innovation products and remanufacturing processes in omnichannel retailing. A numerical study is carried out to illustrate the proposed models' application. The results show that the IS model can synchronize the economic, environmental, and social aspects leading to significant increases in performance. Total supply chain profit under the CO model is the highest. The manufacturer and remanufacturer generate higher profits in the MS model, whereas the retailer makes higher profits in the RS and VN models. When a manufacturer only wants to increase profit with green processes and is not concerned about omnichannel processes, more resources must be allocated for green innovation.

To Share or Not to Share? The Role of Retailer's Information Sharing in a Closed-Loop Supply Chain.

Retailers are faced with a dilemma of whether to share demand information with other supply chain members, and if so, how to share it. Our research interest is motivated by the grounds that the value of downstream retailers’ sales information to upstream manufacturers is to improve the accuracy of manufacturers’ order forecasting. This problem is particularly important in the remanufacturing of closed-loop supply chains (CLSCs). In this study, we consider a retailer (she) as the demand information holder, who sells new and remanufactured products in wholesale to a manufacturer (he) and, simultaneously, she and the manufacturer competitively collect used products from the customers. We explicitly characterize the role of information sharing in a CLSC. We contributed to the information-sharing literature by integrating the existing information-sharing model with dual recycling channels and channel power structure. Previous literature suggests that retailers prefer to share demand information with other firms when the market demand is high. However, surprisingly, we find that when the manufacturer does not play a leading role, the retailer shares her forecast demand information with the manufacturer if the market demand is low. We also show that information sharing reduces the overall profit of the supply chain when the manufacturer dominates the market. In addition, our results also illustrate that information sharing affects the performance of the supply chain mainly by affecting the wholesale price.

Retailer’s optimal CSR investment in closed-loop supply chains: the impacts of supply chain structure and channel power structure

Retailer’s optimal CSR investment in closed-loop supply chains: the impacts of supply chain structure and channel power structure

Performance of Channel Members under Emission-Sensitive Demand for Green Supply Chain Management: A Game Theory Approach

The skyrocketing growth of e-commerce and traditional retailing contributes to a large proportion of carbon emissions in any supply chain. Nevertheless, the literature related to carbon emission has focused on manufacturers and their potential for emission reduction. Therefore, it is imperative to understand the role of the retailing sector in reducing carbon emissions. Therefore, this study considers emission-sensitive demands which are faced by an r-store (brick and mortar retailer) and an e-store (online retailer) under different channel power structures. The competition between the channel members is modeled using game theory for the following channel structures, i.e., (i) r-store and e-store have commensurate channel power, (ii) r-store holds higher channel power, and (iii) e-store holds higher channel power. Equilibrium analysis was carried out to obtain the optimal pricing strategies and the r-store’s optimal profit and e-store. Further, the pricing strategies and resulting sales volumes were compared analytically and followed by a numerical validation. Three subcases were considered under numerical examples based on the parameter values with special reference to the base demand. It was found that competition between the r-store and the e-store having commensurate channel power will make them worse off. Therefore, the channel leadership is neither helping the r-store nor the e-store obtain more profit when the customer demand is emission sensitive.

Decision and coordination analysis of extended warranty service in a remanufacturing closed-loop supply chain with dual price sensitivity under different channel power structures

This paper studies the impact of dual price sensitivity (product price sensitivity and extended warranty service price sensitivity) on the decision of the closed-loop supply chain (CLSC) where manufacturers are responsible for recycling and providing extended warranty service under different channel power structures. First, the dynamic game model is used to describe the three channel power structure models of centralized (C), Manufacturer-led Stackelberg (MS), and Retailer-led Stackelberg (RS). Then, mathematical optimization and reverse induction are used to derive supply chain decision-making and performance levels. On this basis, we further designed a contract to coordinate the supply chain, and use numerical examples to analyze and verify the impact of remanufacturing cost savings and dual price sensitivity on the supply chain system. Research shows that channel power structures, remanufacturing cost savings and dual price sensitivity all have an important impact on the supply chain and corporate profits.

Channel structures and information value in a closed-loop supply chain with corporate social responsibility based on the third-party collection

• The closed-loop supply chain models with corporate social responsibility are conducted. • The equilibrium decisions under symmetric and asymmetric information are derived. • Channel power is not always beneficial to the leader. • The value of information depends on the level of corporate social responsibility. In this paper, we consider a three-echelon closed-loop supply chain consisting of a manufacturer with corporate social responsibility (CSR), a retailer with sales effort, and a third party who is responsible for collecting used products. Different Stackelberg game models are constructed for three channel power structures under information symmetry and information asymmetry, respectively. Under information symmetry, we analyze the impacts of the channel power structure on the channel participants’ profits. We find that whether the channel power is beneficial to the game leader, or the followers depends on the level of the manufacturer's CSR. Furthermore, our results show that no matter which participant becomes the channel leader, her profit will increase as the level of CSR increases. Under information asymmetry, the value of information to the supply chain participants is investigated. We find that if the manufacturer is the channel leader, the value of information to her depends on the information's half range. However, for the retailer-led and third-party-led structures, the symmetric information is always beneficial to the channel leaders, so that they are always motivated to share their private information.

Optimal Pricing and Green Product Design Strategies in a Sustainable Supply Chain Considering Government Subsidy and Different Channel Power Structures

Green product design is a vital measure to support sustainable development in a circular economy era. This paper studies the multi-product pricing and green product design strategies under different supply chain structures and government subsidy strategies. Considering different channel leadership, we establish the centralized (C), manufacturer-led (MS), and retailer-led (RS) supply chain models, respectively. By applying a game-theoretical approach, corresponding equilibrium pricing, green product design, and government subsidy decisions under different supply chain structures are obtained. Through comparison and numerical analysis, we find that: (1) the different subsidy strategies of the government have an important impact on green product development. When the government provides a uniform subsidy strategy, a RS supply chain can bring greener product, more market demands, more profit, and more social welfare; (2) when the government provides a differentiated subsidy strategy, MS and RS supply chain structures can bring greener product and more market demand than the centralized supply chain. They can also bring the same social welfare and the same product to the green design level. However, the MS supply chain structure can bring more profit for the firm; (3) the consumers’ green awareness positively impacts the design and development of green product. Therefore, it is beneficial for the firm to adopt reasonable measures to boost the environmental awareness of consumers in order to realize the sustainable development of our society.

Decision analysis of supply chains considering corporate social responsibility and government subsidy under different channel power structures

Decision analysis of supply chains considering corporate social responsibility and government subsidy under different channel power structures

Optimal innovation investment: the role of subsidy schemes and supply chain channel power structure

We investigate the impact of government subsidy schemes and channel power structure on the level of innovation in a two-tier supply chain. Our results indicate that consumer subsidies are more effective than producer subsidies in promoting innovation investment for a given channel power structure. Regardless of the power structure, supply chain members, consumers and society benefit more from consumer subsidies. If government subsidies are absent, innovation investment is higher when neither member of the supply chain dominates, and consumer surplus and social welfare are also higher in the Nash game. Under the consumer subsidy scheme, although government expenditures are higher in the manufacturer-led game, innovation investment is the same under different power structures, and consumer surplus and social welfare are also, in turn, the same. Under the producer subsidy scheme, the manufacturer invests more in innovation, and government expenditure is also higher when the retailer dominates the supply chain. Under producer subsidies, consumers and society benefit from the presence of powerful retailers when the investment cost is lower, and consumer surplus and social welfare have an inverted U-shaped relationship with the retailer’s power otherwise.

Quality competition between national and store brands

The private label literature assumes that store brands (SBs) are of lower quality than competing national brands (NBs). To contest this notion, this paper examines the quality competition between a NB manufacturer and a SB retailer. The NB manufacturer sells its products through the retailer, and hence the manufacturer and the retailer are in competition. Once both parties decide the right quality level of their respective products, the retailer decides the retail prices for both brands. Using a general quality-dependent cost structure, we explicitly characterise both the price- and quality-level equilibriums under various channel power structures. We find that the SB might have a higher quality level than the NB even with no cost disparity, but will have a lower retail price than the NB, whether its quality is superior or not. Further, price and quality competitions have opposite implications for equilibrium solutions as well as profitability levels. Interestingly, the manufacturer may benefit from a more costly production or quality investment scenario, although both the retailer and the supply chain may suffer from it. The paper highlights the importance of accountability for quality decisions in the study of private label products.