Price Sensitivity Coefficient Research Articles

The inventory bullwhip effect in the online retail supply chain considering the price discount based on different forecasting methods

With the improvement of the new generation information technology, and the development of online economy, the customer behavior has gradually changed. The online economy has gradually become a new economic growth point. Many online platforms attract customers to purchase new products through different kinds of price discounts. In this article, we discuss the inventory bullwhip effect (IBE) in an online retail supply chain (ORSC) considering the price discount based on the different forecasting methods. Moreover, we discuss the influence of them on the IBE. When the price discount, the moving average forecasting method (MA), the exponential smoothing forecasting method (ES), and the minimum mean squared error forecasting method (MMSE) are considered, we consider an ORSC including of a manufacturer and an online platform, and the quantitative models of the BE and the IBE are discussed. This article finds that when the price sensitivity coefficient is very low, the online platform’s IBE is the lowest when the online platform adopts the MMSE method. Moreover, when the price discount gradually increases, the IBE of the online platform is also increasing. Moreover, it is gradually increasing when the expectation price difference coefficient becomes gradually increasing.

Pricing Decisions and Member Participation Conditions in the Platform Supply Chain with Seasonal Demand: A Game Theory-Based Analysis

In a platform supply chain containing an sharing platform, a retailer, and two upstream factories, we consider the sales of two substitutable products and the constraints on the participation of non-platform members in the game, construct a dynamic game model of the platform supply chain with demand fluctuations due to seasonal changes, and use the inverse induction method to derive the thresholds for the participation of the retailer and factories in the game and the optimal price of each member, analyze the pricing decisions and participation game process among members. Our findings are as follows. (1) The threshold for the retailer to participate in the game during peak season is greater than that in the off-season, while the manufacturer's threshold is the opposite. (2) The platform should reduce commissions during peak season, factories should reduce wholesale prices, and the retailer should increase sales price. (3) The increase in price sensitivity coefficient, inventory cost and production cost are all detrimental to the platform, whereas an increase in the cross-price sensitivity coefficient is usually beneficial. (4) Whether it is the peak season or the off-season, the increase in demand fluctuations is bad for all chain members.

Coordinating a dual-channel supply chain with pricing and extended warranty strategies under demand substitution effects

With technology innovation and market complexity, this paper examines a dual-channel supply chain with one manufacturer and one retailer. A manufacturer performs the encroachment by selling products through offline retail and direct online channels. It also provides an extended warranty service with the product sold in both channels. This study identifies the best pricing and extended warranty strategies as decision variables to maximize profits for the dual-channel supply chain under the demand substitution effect. Despite the centralized scenario, a decision-making model in the decentralized scenario is also developed using Stackelberg’s game to determine optimal decision variables. The results demonstrate that the centralized scenario consistently outperforms the decentralized scenario. Thus, coordination contracts are proposed considering the profit structure, revenue-sharing and cost-sharing contracts to coordinate and promote a win-win situation for supply chain members. Furthermore, demand substitution effects are investigated for channel parameters represented in the initial market size, price sensitivity coefficient, and warranty length sensitivity coefficient on optimal decision variables. From the sensitivity analysis, these parameters have a different substitution effect on the optimal decision in each channel. The price and extended warranty length offered in a dual channel positively correlate with the market size and warranty length sensitivity coefficient of the corresponding channel. However, they negatively correlate with the price sensitivity coefficient. Accordingly, a similar situation occurs for the profit of each channel. Last, the discussion supports the theoretical results and generates managerial insights for practical decision-making

Research on the Dynamic Behavior of Supply Chain Systems Considering Product Greenness

In order to meet consumers' demand for green products, it is necessary for manufacturers to improve the greenness of their products during the production process. On the basis of considering the greenness of products, the strategy evolution behavior of multi-period game model was studied, and the stability and complexity of multi-period game system was explored. The stability domain of the system was given, and the effects of product market demand and strategy adjustment speed on the stability domain were analyzed. Research has shown that there are scope limitations on the adjustment speed of game strategies, and the stability domain of the system is positively correlated with the price sensitivity coefficient, while negatively correlated with the sensitivity coefficient of product greenness and product demand. A stable system helps the strategy reach equilibrium after multi-period of adjustment, while an unstable system leads to drastic fluctuations in prices and profits.

Research on Low-Carbon Strategies of Supply Chains, Considering Livestreaming Marketing Modes and Power Structures

A livestreaming supply chain composed of a single manufacturer and a single streamer in the low-carbon market is examined. Motivated by the actual production and operation, both the manufacturer and the streamer have a chance to dominate the supply chain. Low-carbon strategies and livestreaming marketing modes of the supply chain are studied. The impacts of the consumer’s price sensitivity coefficient, low-carbon preference, and streamer’s promotion sensitivity coefficient on the equilibrium results are further studied. The results show that: the streamer achieves the optimal level of promotion effort in the resale mode under both power structures. The manufacturer achieves the optimal low-carbon level in the commission mode when the promotion sensitivity coefficient is smaller under both of two power structures. The streamer’s profit is optimal in the resale mode, while the manufacturer’s profit is optimal in the commission mode when under the streamer-led structure. Two parties’ profits are optimal in the commission mode when the promotion sensitivity coefficient is smaller under the manufacturer-led structure. The low-carbon level, streamer promotion effort and selling price in two livestreaming marketing modes will increase when the streamer promotion sensitivity coefficient and consumer low-carbon preference increase and will decrease when consumer price sensitivity increases under two power structures. Lastly, the selling price in resale mode is always higher than that in commission mode under two power structures.

Fresh keeping decision and coordination of fresh agricultural products supply chain under carbon cap-and-trade.

Considering the carbon emissions caused by the fresh-keeping of fresh agricultural products, this paper studied the rules of fresh-keeping decision-making in the two-echelon fresh agricultural product supply chain led by suppliers under the carbon cap-and-trade policy. In addition, we designed two contracts, cost-sharing contract and two-part pricing contract, to coordinate the supplier's fresh-keeping decision and the supply chain's revenue. The results show that: whether the carbon cap-and-trade policy is implemented or not, the higher the consumer's preference for freshness and the lower the price sensitivity coefficient of consumers, the more favorable it is for suppliers to improve their fresh-keeping efforts. Under the implementation of carbon cap-and-trade policy, suppliers' fresh-keeping efforts are only related to the carbon transaction price, not the carbon cap; the higher the carbon transaction price, the less the supplier's fresh-keeping efforts, but the more the supplier's income; the smaller the cost coefficient of carbon emission reduction and the larger the coefficient of carbon emission reduction, the more favorable it is for suppliers to increase their fresh-keeping efforts; both cost-sharing contract and two-part pricing contract can coordinate the supply chain of fresh agricultural products, but they have different application scope and coordination effect. These conclusions are of great significance to the operation and management of fresh agricultural products suppliers, the improvement of consumers' quality of life and the protection of ecological environment under carbon cap-and-trade.

Coordination Decision-Making for Intelligent Transformation of Logistics Services under Capital Constraint

The intelligent transformation of logistics plays a significant role in meeting the diverse needs of customers, improving operational efficiency, and reducing carbon emissions in logistics activities. Therefore, to achieve sustainable development, logistics enterprises need to face the decision-making problem of intelligent logistics transformation. In this paper, we construct a Stackelberg game model between a financially constrained logistics-service provider (LSP) and a well-funded logistics-service integrator (LSI) and discuss the impact of the wholesale price contract, the cost-sharing contract, the revenue-sharing contract, the two-part tariff contract, and the hybrid cost-sharing and revenue-sharing contract on the intelligence level of logistics services, the profits of supply-chain members, and the channel for logistics-service demand. We found that the cost-sharing contract and the revenue-sharing contract cannot achieve Pareto improvement in the profits of supply-chain members. In addition, the increase in bank-loan interest rates would seriously weaken the level of intelligence and market demand for the entire logistics service. However, when consumers do not have high requirements for the intelligence of logistics services, the two-part power–price contract can create a win–win situation for supply-chain members and increase market demand within a certain range; on the contrary, a hybrid contract of cost sharing and revenue sharing is the best choice. Moreover, in the process of contract design for the intelligent transformation of logistics services, it is necessary to pay attention to the influence of the price-sensitivity coefficient on decision-making.

An Omnichannel Retailing Operation for Solving Joint Inventory Replenishment Control and Dynamic Pricing Problems From the Perspective of Customer Experience

Customer experience, a key element in the domain of omnichannel retailing, plays a vital role in attracting consumers. Implementing a new BOPS (buy online, pick up in store) strategy will not only affect the inventory structure and pricing strategy of retail enterprises, but will also impact the original sales channel. In accordance with the consumer experience, a dynamic optimization model of a retailer inventory system was established in this research. Based on the optimal control theory, analyze the optimal control strategies under four sales modes: online, offline, BOPS, and BOPS-PLUS (BOPS and buy offline online-logistics distribution). Through numerical experiments, the inventory control strategies and optimal discounted profits under the four modes are compared and analyzed. The results show that the optimal experience investment and dynamic pricing levels gradually decrease with time, and the inventory state has a vital influence on the discounted profit of the system. The traditional dual-channel retail model is optimal when the channel inventory is not out of stock. In situations where channel inventory is in short supply (both online and offline), a deeply integrated omnichannel retail mode BOPS-PLUS is best. The numerical analysis also reveals that price sensitivity coefficient, experience service coefficient and online return rate also have significant influence on the selection of optimal channel strategy.

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>

Investment decision-making of closed-loop supply chain driven by big data technology

<p style='text-indent:20px;'>In this paper, we put forward a data-driven supply chain consisting of a manufacturer, a retailer, and a third-party data service provider and explore the two stages of the manufacturer in making investment decisions. Given the convenience of recycling information sources, we divided the structure of the closed-loop supply chain into three investment models, including (1) the manufacturer concentrates on the two stages through big data technology; (2) the manufacturer can stimulate the retailer, who is close to reused products, to attend data collection activities; (3) the manufacturer subcontracts data collection activities to the third-party. The result shows that the manufacturer as the leader of Stackelberg will have alternative models in different situations. Specifically, the retailer is more inclusive than the third-party in the information market due to the positive influence of the price sensitivity coefficient, with the manufacturer always choosing to cooperate with the retailer when the cost advantages of big data investment are less than or equal to that of the third-party. In the event that the third-party data provider, seeing its cost advantage coefficient 0.5 times bigger than that of the retailer, will dominate the information market. Although the third-party has the upper hand, the information market will be shared by the retailer when the cost advantage coefficient of the former is two times bigger or more than that of the latter, with the share shinking with the advantage of the retailer. In addition, there is an interesting finding that the expanding cost advantage of the third-party will have a positive impact on the optimal profit of the manufacturer from two perspectives, including a direct rise in profit and a narrower range of dropping profit.</p>

Game theoretic model for low carbon supply chain under carbon emissions reduction sensitive random demand

Abstract This paper considers a low carbon supply chain consisting of a single manufacturer and a single retailer under the condition that the demand is uncertain. We first establish three games, including manufacturer Stackelberg (MS), retailer Stackelberg (RS) and Nash according to the different power structure of the firms. We then determine that the equilibrium stocking factors, emission reduction levels, wholesale prices and retail prices for the three models, respectively. After that, we demonstrate the effects of power structure. Results show that when the power shifts from the retailer to the manufacturer, the stocking factor decreases, whereas the wholesale price increases. Finally, we discuss the impacts of the random demand. We find that the expected profits of the firms, the emission reduction levels and the retail prices are increasing with respect to the market potential and low-carbon sensitivity coefficient, respectively. Meanwhile, they decrease with respect to the price sensitivity coefficient.

The entry quality threshold setting and commission rate contract selection of a peer-to-peer service sharing platform

PurposeIn recent years, some peer-to-peer (P2P) service sharing platforms have improved their service quality by setting an entry quality threshold for service providers. Considering consumers' heterogeneous preferences for service quality and commission rate, it is worth studying how to select the commission rate contract for a P2P platform under a predetermined entry quality threshold for service providers.Design/methodology/approachIn this study, the platform's profit-maximizing model is constructed under two proposed contracts: unilateral commission rate contract and bilateral commission rate contract. The optimal entry quality threshold and the optimal commission rate are obtained. This study also explores the impacts of cross-side network externality and service price on a platform's optimal decisions and social welfare.FindingsResults show that it is always advantageous for the platform to adopt the bilateral commission rate contract, which is closely related to the strength of cross-side network externality, service price and quality sensitivity coefficient. Under certain conditions, adopting the unilateral commission rate contract can reduce platform profit and service provider surplus, and improve consumer surplus and social welfare.Originality/valueThis study analyzes the unilateral commission rate contract and the bilateral commission rate contract of the platform, and discusses which contract is beneficial to the platform, consumers and service providers. In addition, this study provides a basis for the operation decision of a P2P service sharing platform and the pricing decision of service providers.

Research on pricing strategy of online education products considering consumers' matching degree and price comparison behavior

PurposeThe uncertainty of consumers' perceived value makes online education enterprises face great challenge in developing the pricing strategy. So the purpose of this paper is to research the pricing strategies of online education products by considering knowledge consumers' characteristics.Design/methodology/approachConsidering consumer matching degree and price comparison, this study establishes the utility functions of consumers in normal sales period and discount selling period. On this basis, the research builds pricing models of the online education enterprise under the strategy of price undertaking and intertemporal pricing strategy. It further discusses the impact of consumer matching degree, consumer price sensitivity and different types of consumers on the product price and profit of online education enterprises, and reveals the optimal pricing strategy of the enterprise.FindingsConsumer matching degree and price sensitivity coefficient have positive effects on product price and enterprise profit, but they have different effects on product demand; there are differences in the perceived value of the three types of consumers, and matching consumers are the optimal consumer group; the intertemporal pricing strategy is better than the strategy of price undertaking only when the price sensitivity coefficient is greater than a critical value.Originality/valueThis study enriches the literature on the pricing model of online education products and owns a practical significance to guide the online enterprise to make marketing strategies to increase profit.

The Coordination of Multi-Stage Discounts in a Dual Channel Fresh Agricultural Produce Supply Chain: Minimizing the Loss of Quantity and Quality

This paper explores the coordination of the agricultural cooperative to supermarket or E-commerce supply chain, under the condition of quantity loss with a mixed decay function of exponential and logistical distribution. The nature of this process is analyzed, and the corresponding demand and supply functions with single- and multi-stage discount strategies are constructed, respectively, to create a working model. The optimal discount ratios for supermarkets and agricultural cooperatives in decentralized and centralized decision-making modes coupled with single- and multi-stage discounts are calculated, respectively. Finally, a universal optimal strategy is designed, which can be applied to various quantity decay scenarios and makes the discount strategy more generalized. The results show that discounts can coordinate supply chains more effectively; not only would fresh agricultural produce be sold out before it starts to rot, but also the benefit conflicts arising from both supermarkets vs. cooperatives and traditional vs. E-commerce channels could be equilibrated. Further, multi-stage discounts are more difficult to coordinate than single-stage ones, the corresponding optimal discount ratios rely on the initial quantity of fresh agricultural produce in the supply chain, its market share in the traditional distribution channel, the potential market size, retail price, the price sensitivity coefficient of the channel, the cross-elasticity coefficient of prices between different channels, and the properties of the quantity loss. It is concluded that, regardless of what kind of quantity and quality loss occurs, whether decentralized or centralized decision making is selected, or whether the supermarket’s or agricultural cooperative’s discount ratio is considered, a universal price discount consisting of a fixed term and a drift term could both maximize supply chain profit and coordinate this dual-channel supply chain.

Recycling mode and strategy of closed-loop supply chain by automotive battery manufacturer led

In this paper, four single-channel recycling models are constructed under the condition that the automotive battery manufacturer plays a dominant role in the closed-loop supply chain (CLSC) of automotive battery recycling. In order to encourage automotive battery recyclers to expand the scale of recycling market and promote the whole society to improve the utilization level of used automotive battery. This paper also considers the government's recycling subsidy to automotive battery recyclers. On this basis, the impacts of automotive battery recycling effort coefficient, consumer automotive battery recycling price sensitivity coefficient, and government subsidy coefficient on the equilibrium results are further analyzed. The results show that automotive battery recyclers should invest reasonable recycling effort to avoid squeezing the profit margin of recycling due to excessive investment in recycling effort cost. Automotive battery recyclers should also pay attention to the sensitivity of consumers to the price of recycling, formulate reasonable automotive battery recycling prices, and tap the potential demand of recycling market. The government should give reasonable subsidy to automotive battery recyclers, in addition to encourage them to expand the scale of recycling, so as to improve the level of automotive waste battery recycling in the whole society.

Carbon Trading Mechanism, Low-Carbon E-Commerce Supply Chain and Sustainable Development

Considering the carbon trading mechanism and consumers’ preference for low-carbon products, a game decision-making model for the low-carbon e-commerce supply chain (LCE-SC) is constructed. The influences of commission and carbon trading on the optimal decisions of LCE-SC are discussed and then verified through numerical analysis. On this basis, the influence of carbon trading on regional sustainable development is empirically analyzed. The results show that the establishment of carbon trading pilots alleviates the negative impact of unfair profit distribution. Increasing the commission rate in a reasonable range improves the profitability of LCE-SC. Nevertheless, with the enhancement of consumers’ low-carbon preference, a lower commission rate is more beneficial to carbon emission reduction. The total carbon emission is positively related to the commission rate. However, the unit carbon emission decreases first and then increases with the commission rate. The influence of the carbon price sensitivity coefficient on the service level is first positive and then negative, while the influence on the manufacturer’s profit goes the opposite. The empirical analysis confirms that the implementation of carbon trading is conducive to regional sustainable development and controlling environmental governance intensity promotes carbon productivity.

Decision Optimization and Interest Coordination of Dual-Channel Supply Chain Embedded by Two-Echelon Logistics Service Providers under the Dominance of Retailer

Taking the dual-channel supply chain embedded by two-echelon logistics service providers as the research object, this paper studies the optimal decisions of each decision maker under the centralized and decentralized decision-making mode led by the retailer. Based on the decentralized decision-making mode, an improved coordination mechanism of residual profit sharing is designed to realize the interest coordination, in which the bargaining power of all participants is fully considered. The results show that, under the decentralized decision-making mode, the profit of FLSP increases first and then decreases as the sensitivity coefficient of cross-service level increases, while the profits of other decision makers and the supply chain system decrease with the increase of sensitivity coefficient of cross-service level. The relative size of the price sensitivity coefficient of online and offline channel has an inconsistent impact on the profit of FLSP, while it has a consistent impact on the profits of other decision makers. The profit of FLSP fluctuates greatly with changes in the sensitivity coefficient, and it is difficult to be guaranteed in the entire supply chain system. On this basis, an improved coordination mechanism of residual profit sharing is designed. The results show that, after the introduction of bargaining power coefficient of the Nash negotiation model, the variation coefficient of the profits of all decision makers is smaller after coordination, and the profit growth rates are more uniform.

Fresh Agricultural Products Supply Chain Coordination and Volume Loss Reduction Based on Strategic Consumer.

The reduction of fresh agricultural product volume loss throughout the supply chain system is of high importance due to their perishable nature and impact on society, the economy, and environment. In this paper, three models for two-stage pricing, coordination, and volume loss reduction of the supply chain where third-party logistics service providers and retailers act as a Stackelberg leader and a follower for fresh agricultural products are developed, taking into account both volume loss during transport and quality loss in retail in the presence of strategic consumers. The following results are drawn from the contract for sharing revenues and service costs: (1) The supply chain achieve coordination and the products are healthier for consumers; (2) the coordination leads to a reduction in the three types of volume losses simultaneously only if the lowest marginal costs of the supply chain occur under certain conditions; and (3) the increase in the service sensitivity coefficient, the increase in the freshness discount coefficient under certain conditions, the decrease in the consumer benefit discount coefficient under certain conditions, and the decrease in the price sensitivity coefficient lead to an increase in the profit of the supply chain and a reduction in the three types of volume losses.

Coordination of Supply Chain under Blockchain System-Based Product Lifecycle Information Sharing Effort

The study proposes a supply chain contractual coordination model based on the product lifecycle information sharing effort and consumers' price sensitivity to a product with the Blockchain system. This paper examined the following five scenarios: (1) centralized supply chain with Blockchain system-based product lifecycle information sharing investment; (2) Stackelberg leader retailer processed and invested Blockchain system scenario; (3) retailer processed the Blockchain system cost-sharing scenario; (4) retailer processed Blockchain system investment through bargaining the revenue-sharing model; (5) Blockchain system investment under the cost and revenue-sharing contract. The study used the game theory reverse induction method to compare the Nash equilibrium solutions under different decision-making scenarios and discussed the chain member’s constraint condition of Blockchain system investment. We simulated and analysed the products’ lifecycle information sharing effort cost factor, the influence of price sensitivity coefficient, and expected profits of the supplier and retailer. The study results show that the product lifecycle information sharing effort under the Blockchain system increases the profit of the whole chain and decreases with the increase of customer’s price sensitivity coefficient.

GAME MODEL FOR ONLINE AND OFFLINE RETAILERS UNDER BUY-ONLINE AND PICK-UP-IN-STORE MODE WITH DELIVERY COST AND RANDOM DEMAND

Online retailers are increasingly adding buy-online and pick-up-in-store (BOPS) modes to order fulfilment. In this paper, we study a system of BOPS by developing a stochastic Nash equilibrium model with incentive compatibility constraints, where the online retailer seeks optimal online sale prices and an optimal delivery schedule in an order cycle, and the offline retailer pursues a maximal rate of sharing the profit owing to the consignment from the online retailer. By an expectation method and optimality conditions, the equilibrium model is first transformed into a system of constrained nonlinear equations. Then, by a case study and sensitivity analysis, the model is validated and the following practical insights are revealed. (I) Our method can reliably provide an equilibrium strategy for the online and offline retailers under BOPS mode, including the optimal online selling price, the optimal delivery schedule, the optimal inventory and the optimal allocation of profits. (II) Different model parameters, such as operational cost, price sensitivity coefficient, cross-sale factor, opportunity loss ratio and loss ratio of unsold goods, generate distinct impacts on the equilibrium solution and the profits of the BOPS system. (III) Optimization of the delivery schedule can generate greater consumer surplus, and makes the offline retailer share less sale profit from the online retailer, even if the total profit of the BOPS system becomes higher. (IV) Inventory subsidy is an indispensable factor to improve the applicability of the game model in BOPS mode.