Retail Price Level Research Articles

Pricing strategy based on a stochastic problem with barter exchange under variable promotional effort for a retail channel

Barter exchange platform gains popularity as an effective trade exchange strategy to minimize the vast use of paper money. In retail management, the application of the barter platform is growing because of cashless trade. It allows a retail enterprise to trade unused products in exchange for other assets purchased by reducing the actual purchase of assets. In this context, the study analyzes a stochastic model of a barter exchange problem under a retail channel. It investigates the barter exchange policy in three different models: conventional newsvendor model without barter exchange, with barter exchange, and with barter exchange with promotional effort and emissions level. The market demand for products is considered random and random with deterministic variables for three types of models. Stochastic models are solved in two different ways: with and without probability distribution functions of the random market demand. For maximization of the retailer's profit, the proposed framework obtains optimal decisions on ordered quantity, retail price, promotional effort, and emissions level. Five examples are tested and numerical results show that the barter exchange policy is more profitable than a traditional newsvendor model. A combination of stochastic and deterministic variable demand provides 34.31% more profit than a stochastic demand. Sensitivity analysis, discussions, and managerial insights are provided in detail on optimal decisions.

Sales model and logistics selections for a manufacturer considering carbon emission and logistics levels

Improving logistics levels requires mobilizing more resources, resulting in more carbon emissions. We consider a manufacturer selling its products through an e-commerce platform that sells them to customers (reselling) or directly accessing customers via the platform by paying a proportional fee (agency selling). Under reselling, the manufacturer first sets a wholesale price and then the platform sets a retail price and a logistics level. Under agency selling, if using third-party logistics, the manufacturer sets the retail price and logistics level. When using the platform logistics, the manufacturer sets the retail price and the platform sets the logistics level; moreover, the manufacturer bears part of the logistics cost. This study examines the manufacturer’s sales model and logistics selection and its impact on the platform’s profit and consumer surplus. We find that if the logistics-improving efficiency is sufficiently high (low), the manufacturer should employ reselling (agency selling and third-party logistics) when the manufacturer bears a sufficient small or large part of the logistics cost. However, regardless of the size of the logistics-improving efficiency, the manufacturer should adopt agency selling and platform logistics when the logistics cost borne by the manufacturer is intermediate. If consumers become more sensitive to carbon emission levels, the manufacturer is less (more) likely to adopt the reselling model and platform logistics (agency selling model and platform logistics). Choosing reselling or agency selling and platform logistics, or agency selling and third-party logistics could benefit both the platform and consumers, generating a “win-win-win” outcome.

ПАРАМЕТРИЧЕСКИЕ МЕТОДЫ ЦЕНООБРАЗОВАНИЯ: МЕТОДИКА И ПРАКТИКА ПРИМЕНЕНИЯ

The scientific article contains a review of economic publications presenting scientific research by domestic and foreign scientists on the problems of pricing in the agricultural sector of the economy: establishing the optimal level of purchase, wholesale and retail prices for agricultural products, ensuring the growth of financial results by increasing income from the sale of products, identifying the dynamics food market, forecasting price dynamics in agricultural production, methodology of pricing policy and price relations of agricultural organizations. A production feasibility study was conducted for the expected sales volume. The influence of sales timing (first batches or the main harvest of agricultural products) and price on the amount of demand (expected sales volume) is shown. A function has been constructed for the dependence of sales volume on the price of agricultural products, clearly showing that an increase in sales volume is possible if the price of agricultural products decreases. It is indicated that at the beginning of the season, a high price repels the consumer, this negatively affects the amount of revenue. A paired regression equation was constructed, and the expected sales volume was determined using regression analysis. The methodology for calculating the total costs of production, their classification depending on the degree of variability (the influence of the expected sales volume) is shown. It is noted that in total costs there is a constant part (fixed costs that do not depend on the expected sales volume) and a variable part (variable costs that change in direct proportion to changes in the expected sales volume). A profit generation model is described, including data from a regression analysis of the expected sales volume and calculation of the total costs of production.

Economic efficiency of feed use in milk production in agricultural enterprises of Ukraine

The article conducted comprehensive studies of the economic efficiency of using feed in milk production in Ukrainian agricultural enterprises. The principal value and natural indicators that characterize the productivity of feed use in dairy cattle breeding are defined. Based on the benchmarking technique, an assessment of the relative technological efficiency of the use of feed by the regions of Ukraine was carried out, and potential reserves of their reduction relative to the reference value of the indicator of feed consumption per 1 t of milk was established. The main measures to increase the economic efficiency of using feed in milk production in Ukraine's agricultural enterprises are proposed. According to the results of the study, it was established that the payment of feed in enterprises that produce milk in Ukraine for 2010-2023 increased from 2.5 to 17 UAH per 1 feed unit, which is due to the devaluation of the national currency during the studied period and partly due to the increase in technological efficiency use of fodder. In terms of US dollars, the feed payment for milk production during the same period increased from 0.31 to 0.51 dollars per 1 feed unit. As of the end of 2023, Ukrainian enterprises spent an average of 0.41 dollars of the cost of all types of feed to obtain 1 dollar of the cost of raw milk sold. Accordingly, for 1 dollar of the cost of fodder, enterprises produce and sell raw milk worth 2.41 dollars. It is essential to diversify milk sales channels with a partial focus on direct sales directly to the final consumer, taking into account the almost three-fold ratio between the level of retail and wholesale prices of milk sales. To increase the economic efficiency of the use of fodder in the dairy cattle industry of Ukraine, it is also necessary to implement a system of organizational and technological measures to improve the conditions of keeping, animal care, veterinary support, optimization of feeding rations, fodder storage conditions, implementation of cow productivity monitoring using specialized software.

A closed-loop green supply chain with retailers' competition and product recycling in the green environment under the cap-and-trade policy

<abstract><p>Nowadays, product recycling has become an effective strategy for manufacturing industries to achieve sustainable development due to the scarcity of natural resources, waste management, and greenhouse gas emissions. This study considered an imperfect production-based competitive supply chain model for product recycling in an emission-reduction environment under a cap-and-trade scheme. The manufacturer invests in green technology to restrict carbon emissions during production. The recycler collects used items at a recovery rate depending on the buy-back price and environmental awareness effort. The rival retailers compete against each other for the retail price and promotional effort. The linear type of market demand depends on the retail price, promotional effort, and green level of the product. The proposed model was analyzed analytically and numerically under one centralized system, five decentralized systems, three Stackelberg, and two Nash game structures. Numerical examples and sensitivity analysis of the key parameters were studied to justify the feasibility of the proposed model. The present study revealed that the centralized scenario is mostly preferable for supply chain profit. The manufacturer-Stackelberg 1 scenario is most profitable for the manufacturer, whereas the two retailers collect maximum individual profit in the vertical Nash 2 model, where they jointly play the game. Moreover, retail price plays a crucial role in optimizing individual retailers' profits in the competitive market. In connection with the environmental aspects, the government should offer lower carbon caps to curtail excessive emissions and restrict the selling of excess carbon quotas.</p></abstract>

Optimal retail price and service level in a dual-channel supply chain with reference price effect

<p style='text-indent:20px;'>We study the optimal retail price and service level in a dual-channel supply chain in which the manufacturer may sell products through its online channel and offline retailer. Consumers with channel preference make their purchasing decision based on retail price, service level and channel valuation difference. We consider the reference price effect into a Hotelling utility function to formulate the competition of retail price and service level. We analytically derive the unique equilibrium separately in three power structures: (1) Manufacturer-led Stackelberg game (MS), (2) Retailer-led Stackelberg game (RS) and (3) Nash game (N). Particularly, we characterize the impacts of channel valuation difference and reference price effect intensity on the optimal decision and expected profit. In contrast to the previous literature on the dominance of the supply chain in that the dominance always can raise the dominant enterprise's profit, our findings indicate that supply chain members with channel advantages and channel disadvantages have different preferences for power structure. The member with channel disadvantages should give up dominance. Only when channel valuation difference is significant or reference price effect intensity is weak, the member with channel advantages will fight for dominance. Nash game is highly competitive in that the members only earn less profit. Numerical examples verified theoretical results.</p>

Ручное управление ценами на продовольствие: механизмы, результаты, альтернативы

On December 2020 the Government of the Russian Federation launched measures to limit the maximum level of prices for sugar and sunflower oil. They were established on the basis of agreements between the Government of the Russian Federation, major manufacturers and retail chains. Decisions were made on an emergency basis. This paper analyzes the legislative basis of the decisions made, the mechanisms of regulation and their consequences. The study revealed problems in setting and observing maximum prices: flaws in the legal framework for imposing price restrictions and agreements between the government and business entities, difficulties in choosing business entities and regions for signing agreements, insufficient opportunities for signatories to implement agreements, difficulties in monitoring the implementation of agreements and evaluating the effectiveness of the introduction of marginal prices. Based on the results of the study, it was concluded that the experiment with limiting the maximum level of wholesale and retail prices for socially significant food products did not yield positive results and alternative options are needed to reduce the volatility of food prices.

Recycling model of low‐carbon and closed‐loop supply chain considering government subsidies

AbstractTo find the manufacturer's optimal recycling mode under the dual factors of government subsidies and consumers' low‐carbon preference, we construct three game models by taking the wholesale price, retail price, recovery rate, and carbon emission reduction level as the decision variables. Then, Stackelberg Game and Mathematica 12.0 are used to work out the equilibrium strategies of the recovery model, then we reveal the impact of government subsidies and consumers' low‐carbon preference on the closed‐loop supply chain. (1) Entrusting retailers to recycle is the best choice. (2) The government subsidy to the manufacturer and retailer within a certain range is conducive to promoting recycling activities and has a positive impact on the manufacturer's cost savings and carbon emission reduction investment. Nevertheless, the effect of subsidizing the third party is not obvious. (3) Cultivating consumers' low‐carbon preference for low‐carbon/remanufactured products can not only directly promote the overall profit of the closed‐loop supply chain, but also increase the rate of recovery and level of carbon emission reduction. Thus, the government should increase the subsidized prices of manufacturers and retailers and there is no need to subsidize third parties. It is necessary to cultivate consumers' low‐carbon preference, which is conducive to promoting manufacturers' carbon emission reduction activities.

Ethical fashion supply chain operations: product development and moral hazards

Corporate social responsibility (CSR) is critical. As a part of CSR, fashion companies have to decide whether to be ethical or not during the product development process. Motivated by real-world practices, we conduct a gametheoretic modeling analysis and derive the firms’ optimal decisions (including ethical operations (ETO) adoption, pricing, and product greenness level) in fashion product development. We identify a key moderating factor which governs how an increase of basic market demand significantly affects the optimal product greenness level and how an increase of basic production cost influences the optimal retail price. Furthermore, we find that there is a threshold that plays a critical role in determining whether the optimal retail price and product greenness level are higher or lower with the adoption of ETO. We prove that when the fixed payment from the retailer to the manufacturer under the ETO case is set to be sufficiently small, the retailer prefers to adopt ETO and requests the manufacturer to follow. We propose three practical measures (including the use of technologies) to help encourage the supply chain members to invest in ETO willingly. We finally consider the probable occurrence of moral hazard problems and explore the managerial implications.

A three-step procedure to investigate the convergence of electricity and natural gas prices in the European Union

The paper introduces an innovative three-step approach to simultaneously investigate the price dispersion in retail electricity and natural gas markets for both domestic and industrial consumers over time and across EU countries. In the first step, a multilateral Country-Product-Dummy price index is applied to estimate the purchasing power parity (PPP) of the EU energy market. In the second step, the PPP values are then used to cluster the EU countries by means of a hierarchical cluster analysis based on the Ward method. Finally, in the third step, the Hodrick-Prescott filter is employed to estimate the PPP trends and to investigate different notions of convergence, within and between the identified clusters. We show that different EU countries can be classified into four clusters which are characterized by CPD indexes and PPPs below, slightly below, slightly above and above the average CPD/PPP series, respectively. Taken together, the results from our analysis indicate that the electricity and natural gas prices across the EU-28 member states have not converged, despite significant efforts in market integration and regulatory harmonization. The evidence of a slow beta-convergence is not associated with sigma- and club convergence both at intra- and inter-cluster level. Among country-specific factors, the results suggest that the adoption of national energy and climate policies could have played a major role in explaining the difficulties of the convergence process at a retail price level.

Stringency of Movement Restrictions Linked With Higher Retail Food Prices but Not Overall Prices for All Consumer Goods During COVID-19 Pandemic

ObjectivesThe COVID-19 crisis has disrupted economies and health systems across the globe and has brought substantial challenges for food systems. Government responses key to minimizing disease spread have included a number of movement restriction policies (e.g., school closures, stay at home measures, etc.). Such policies have impacted food consumption and purchasing behaviours and have harmed much of the face-to-face type of labour required for food retailing, which in turn may have impacted the affordability of diets. We use evidence from 133 countries to investigate the association between stringency in movement restriction policies and retail price levels for food and other consumer goods.MethodsWe use the International Monetary Fund's monthly national consumer price index (CPI), and food and non-alcoholic beverage index (FCPI), as well as a ratio of FCPI to CPI—the food price index (FPI)—for 133 countries from January 2017 to November2020. Data on stringency in movement restriction policies and COVID-19 cases and mortality per million were obtained from the Oxford COVID-19 Government Response Tracker and the European Centre for Disease Prevention and Control, respectively. Fixed effects regression models were used to estimate the association between stringency of COVID-19 movement restrictions and monthly differences in 2020 retail price levels (from average 2017–2019 levels) of foods and other consumer goods, while controlling for pandemic severity in each country and month.ResultsRegression models yielded a positive and significant relationship between stringency level and FCPI level (coeff. = 1.24–1.91; 95% CIs: 0.25–2.79) or FPI level (coeff. = 1.24–2.14; 95% CIs: 0.60–2.53). Alternatively, stringency level was either negatively associated with CPI level (coeff. = −0.57; 95% CI: −1.06 – −0.07) or not significantly associated with CPI level.ConclusionsGovernment response stringency in COVID-19 movement restriction policies is linked with higher retail food price levels. Governments could consider implementing these policies alongside other measures (e.g., food assistance) to mitigate negative spillovers into the domain of food security and nutrition.Funding SourcesThis work was supported by the Bill & Melinda Gates Foundation and UKAid through the Foreign, Commonwealth & Development Office of the UK.

Optimization model of trade credit and asset-based securitization financing in carbon emission reduction supply chain

As low-carbon products increasingly become popular among consumers, the manufacturers have begun to advocate low-carbon supply chain to meet consumers’ low-carbon preferences. However, low-carbon investments inevitably bring financing constraints to the supply chain. To provide a potential solution to relieve the financial constrain, we established a two-echelon supply chain consisting of a low-carbon product manufacturer and a retailer. Supply chain members can effectively solve their financing constraints by utilizing portfolio financing consisting of the bank loan (BL), trade credit (TC), and asset-based securitization (ABS). We found that under the financial mode of BL and DC (Dual credit refers to the combination of bank loan and trade credit), only when consumers are highly price-sensitive to low-carbon products can tax preference incentivize the manufacturer to reduce carbon emissions. Under DC mode, consumer’s strong low-carbon preference will push up the retail price level of low-cost products; Under portfolio financing with ABS & DC, consumers’ strong low-carbon preference will force up the retail price level of low-carbon products with low price sensitivity. Compared with pure BL and DC, the cash flow under portfolio financing is the tightest. Besides, we took capital demand of the multi-stage scenario into consideration. Moreover, we found that the tax rate and tax deduction ratio of carbon emissions reduction will affect the retail price, wholesale price, and financing decision in the three financial modes when satisfying certain conditions.

Explainable AI for a No-Teardown Vehicle Component Cost Estimation: A Top-Down Approach

The broader ambition of this article is to popularize an approach for the fair distribution of the quantity of a system's output to its subsystems, while allowing for underlying complex subsystem level interactions. Particularly, we present a data-driven approach to vehicle price modeling and its component price estimation by leveraging a combination of concepts from machine learning and game theory. We show an alternative to common teardown methodologies and surveying approaches for component and vehicle price estimation at the manufacturer's suggested retail price (MSRP) level that has the advantage of bypassing the uncertainties involved in 1) the gathering of teardown data, 2) the need to perform expensive and biased surveying, and 3) the need to perform retail price equivalent (RPE) or indirect cost multiplier (ICM) adjustments to mark up direct manufacturing costs to MSRP. This novel exercise not only provides accurate pricing of the technologies at the customer level, but also shows the, a priori known, large gaps in pricing strategies between manufacturers, vehicle sizes, classes, market segments, and other factors. There is also clear synergism or interaction between the price of certain technologies and other specifications present in the same vehicle. Those (unsurprising) results are indication that old methods of manufacturer-level component costing, aggregation, and the application of a flat and rigid RPE or ICM adjustment factor should be carefully examined. The findings are based on an extensive database, developed by Argonne National Laboratory, that includes more than 64,000 vehicles covering MY1990 to MY2020 over hundreds of vehicle specs.

Uncertain two-echelon green supply chain models based on revenue sharing contract

In the present paper, we consider a two-echelon supply chain problem including a manufacturer selling green products to a retailer, and then selling to customers. The market base, customer demand, production cost, and sensitivity to price are recognized as uncertain variables due to the influence of many human factors in reality. The aim is to maximize the entire profit of the supply chain, improve the greening level of products, and solve the contradiction between economic growth, resource protection and ecological environment. Retailer-led and bargaining expected value game models with revenue sharing contract are established. The market demand is affected by retail price and greening level. The revenue sharing contract and its parameters are designed to achieve perfect coordination of the established supply chain models. Some inferences about the optimal decision variables are obtained. Finally, numerical experiments suggest that the revenue sharing contract raises the greening level and reduces the retail price significantly compared to the decentralized decision model.

Do LPG prices react to the entry of natural gas? Implications for competition policy

In developing countries, the penetration of Liquefied Petroleum Gas (LPG) is still high, and hence the entry of Natural Gas (NG) networks coexists with the use of LPG by an important fraction of households. A relevant policy question is whether the degree of horizontal integration between NG and LPG providers has an influence on the level of retail prices. Using self-reported retail prices of the largest LPG provider in Chile during years 2013 and 2014, we estimate that the presence of a competing NG network generates an average decrease of LPG retail prices within the range [-4%,-2%]. This result suggests that the degree of horizontal integration between NG and LPG providers should matter, in particular for policy interventions such as merger control by competition authorities and the granting of concessions for deploying NG networks by sectoral regulators.

РОЗНИЧНЫЕ ЦЕНЫ НА БЕНЗИН В МОСКВЕ В ПЕРИОД ПАНДЕМИИ COVID-19

The article is devoted to the analysis of retail gasoline prices in Moscow in the period after the start of the spread of coronavirus infection. We analyze the statistical data on changes in wholesale and retail prices for the main brands of gasoline and diesel fuel during the pandemic. Empirical data reveal the effect of the damper price regulation mechanism, which makes it possible to soften the reaction to sharp fluctuations in world oil prices. It is shown that positive and negative price shocks in the world oil market during the pandemic smoothed out at the level of wholesale prices for oil products in Russia, and practically neutralized at the level of retail prices.

The Effect of Retail Electricity Price Levels on the FI Values of Smart-Grid Rooftop Solar Power Systems: A Case Study in the Central Highlands of Vietnam

Smart-grid rooftop solar electricity (SG rooftop PV) is an alternative sustainable energy resource. This research was conducted in the Central Highlands of Vietnam (CHV) in light of the different levels of retail electricity pricing, the sunshine duration, and the implementation of a feed-in-tariff system, in order to calculate the financial indicators (FIs) of SG rooftop PV, which would supply investors, companies supplying SG rooftop PV, and policymakers with useful information. The FI values were calculated based on the net present value, the payback period, and the internal return rate. The results show that the electricity retail price level affects the FI of SG rooftop PV. SG rooftop PV is installed to satisfy higher electricity consumption levels, which attracts a higher retail electricity price. As a result of the greater benefits, especially if SG rooftop PV is installed and the highest level of electricity (exceeds 400 kWh) is used to satisfy domestic consumption, users will recoup their investment in only four years and after that will enjoy free electricity. All the FI values derived from this research show that people in the CHV can derive benefits from installing SG rooftop PV.

Information sharing in an E-tailing supply chain for fresh produce with freshness-keeping effort and value-added service

This paper explores information sharing in an e-tailing supply chain for fresh produce. We consider a supply chain consisting of a supplier providing freshness-keeping effort and an e-tailer providing value-added service. The e-tailer has private information about uncertain demand and decides whether to share the information with the supplier. We find that information sharing may benefit the e-tailer and that the e-tailer chooses to share information voluntarily when the freshness elasticity is above a certain threshold. We also show that information sharing cooperation is more likely to occur when the supplier is more economical in terms of freshness-keeping investment, or when the e-tailer is more efficient in terms of service investment. Then, we design an incentive contract with a transfer payment that stimulates the e-tailer to share information with the supplier. Next, we investigate the impacts of information sharing on equilibrium decisions. We show that under voluntary information sharing, the e-tailer increases (decreases) both the retail price and service level under high (low) demand information sharing. However, under information sharing with compensation, the e-tailer decreases (increases) the service level but may increase (decrease) or decrease (increase) the retail price under high (low) demand information sharing. Finally, from a social policymaking perspective, we discuss the impacts of information sharing on the expected social welfare. Interestingly, we find that whether information sharing with compensation improves the expected social welfare depends on the freshness elasticity.

A MONETARY ANALYSIS OF GHANA: EXAMINING THE IMPACT AND THE CAUSAL RELATIONSHIP BETWEEN MONETARY POLICY AND INFLATION IN GHANA

Purpose: The main objective of the study was to examine the impact and the causal relationship between monetary policy and inflation in Ghana.Methodology: Annual time series data spanning from 1985 to 2017 with Auto Regressive Distributed Lagged (ARDL) model were employed for the analysis.Findings: The outcome from the study shows that, monetary policy rate had insignificant negative relationship with inflation in both the short and the long run. Again, interest rate, domestic investment and money supply were found to have significant positive impact on inflation in both the long and the short run for a specific period chosen for the study.The causal relationship shows that monetary policy rate granger causes money supply within the period understudyUnique contribution to theory and practice: The study recommends that policy makers need to keenly consider the levels of money supply in Ghana so as to ensure a stable retail price levels. The Government of Ghana needs to evaluate the prevailing levels of retail prices and set the interest rates on the 91-day Treasury bills because they are majorly treated as risk free rate hence determines other interest rates and inflation levels in Ghana.

A single-vendor single-buyer supply chain model with price and green sensitive demand under batch shipment policy and planned backorder

This paper considers a two-level supply chain which consists of a single-vendor and a single-buyer. The vendor produces a single product in lot and transfers the whole lot to the buyer in a combination of equal and unequal sized batches. All unequal sized batches are in a geometric progression with a fixed common ratio. Consumer's demand is sensitive to the retail price and greening improvement level of the product. At the buyer, planned shortages are allowed and are completely backlogged. Assuming that the buyer has higher decision power than the vendor, we develop non-coordinated decentralised model and coordinated model with cost sharing contract, and the integrated centralised model. The numerical results show that the cost sharing contract gives an impressive improvement in the profits of both the vendor and the buyer over their profits in the non-coordinated system. A sensitivity analysis is performed to explore how the changes in the key model-parameters effect the optimal profits of the vendor and the buyer and the whole supply chain.