Profit Of Retailer Research Articles

Sales channel competition for supply chain with the blockchain technology

AbstractThe emerging blockchain‐supported platforms (BSPs) become prevalent with higher product quality and guaranteed authenticity, making the competition between BSP and traditional sales channels (TSC) gain attention. To explore the optimal operation strategies for retailers in TSC and BSP, we develop the vertically differentiated model to describe the channel competition and derive optimal decisions for two retailers. Then, the BSP's comparative advantage and the value of blockchain technology are analyzed. Next, we examine how blockchain quality disclosure and network externalities affect channel competition, as well as the impact of government policies. We find that (i) a higher quality improvement in BSP will simultaneously increase both retail prices and retailers’ profit under some circumstances. Meanwhile, the counterfeit sold in the TSC and channel switching hassle in the BSP make retailers’ products less competitive and reduce profits, respectively. (ii) Being a BSP retailer is not necessarily better, as blockchain's effect on product quality and consumer experience determines market share and profitability. Whether consumers can benefit from blockchain depends on the basic value of the BSP product and the aggregate level of consumer utility from the BSP. (iii) Blockchain‐based quality disclosures and network externalities might not always benefit BSPs, they could increase BSP retailers’ costs or increase competition in the market. (iv) The strict supervision policy reduces the TSC retailer's profit and product quality. Meanwhile, the technology subsidy policy contributes to the development of the BSP, but the BSP retailer needs to be wary of uncontrolled price increases due to policy spillover effects.

Measuring the effects of customized targeted promotions on retailer profits: prescriptive analytics using basket-level econometric analysis

Measuring the effects of customized targeted promotions on retailer profits: prescriptive analytics using basket-level econometric analysis

Optimal Base-Stock Inventory-Management Policies of Cement Retailers under Supply-Side Disruptions

The current study aims to identify some optimal base-stock inventory-management policies that maximize the expected long-run profitability of cement retailers under potential supply-side disruptions. Unlike existing articles, the proposed economic order-quantity model considers periodically varying random demand rates of deteriorating items together with partially back-ordered shortages in the face of those random disruptions. This study computes the global concavity to execute the exemplary aspect for the optimal base-stock level under a slew of cost components and a fixed cycle length. Regarding the optimal pricing-related policies, this study proposes that cement retailers should stock from nearby supplier points. Unlike existing articles, we find that changes to either the unit-holding cost or the unit-lost sales cost have hardly any determining effect on the long-run profitability of retailers. When supply-side disruptions are more likely to occur during peak seasons, this study advocates for a planned capacity addition and higher base-stock levels of cement bags.

Robust pricing and inventory strategies for an omnichannel retailer under carbon tax and cap-and-offset regulations

While an increasing number of retailers use the buy-online-and-pick-up-in-store (BOPS) service to improve operational efficiency, it increases the uncertainty between the offline and online channels. Furthermore, the implementation of different carbon regulations creates certain challenges for an omnichannel retailing system because of the tradeoff between the economy and the environment. These factors motivate us to study the joint pricing and inventory decisions of an omnichannel retailer regrading the stochastic demand of BOPS customers with limited information under carbon tax and cap-and-offset regulations. A distributionally robust newsvendor model is developed for the omnichannel retailer under carbon tax regulation to derive the joint decisions on the sales price and inventory. An interesting result indicates that under carbon tax regulation, differential pricing strategy increases the profit of the omnichannel retailer. The distributionally robust newsvendor model under cap-and-offset regulation is solved by the Karush-Kuhn–Tucker (KKT) conditions. The comparison shows that adopting uniform pricing strategy under cap-and-offset regulation brings more profits than adopting it under carbon tax regulation. Finally, a numerical study is conducted to illustrate and complement the theoretical results. The value of addition demand information is also tested. Key findings show that the omnichannel retailer gains higher profit and emits more carbon emissions under cap-and-offset regulation than under carbon tax regulation. Under each type of regulation, the performance of robust solutions is close to that with normal distribution.

Retailer's ordering decisions with consumer panic buying under unexpected events

A disruption in demand caused by unexpected events, such as extreme weather and epidemics can trigger panic buying by consumers, adversely affecting firms' inventory management. From the demand side, focusing on event-sensitive products, this paper develops an analytical model to examine how consumer panic buying behaviors resulting from unexpected events affects a retailer's ordering decisions and expected profits under both practices without and with purchase restriction policies. The main results are as follows. First, consumer panic buying behavior pushes the retailer to increase the order quantity in the first period and reduce the order quantity in the second stage. Second, regardless of the possibility of unexpected events, a moderate panic buying level is most beneficial to the retailer. Third, a large inventory capacity is always advantageous for the retailer to cope with unexpected events without a purchase restriction policy, whereas only when the inventory capacity is at a moderate level, the retailer can benefit from consumer panic buying under a purchase restriction policy. In addition, the impact of consumer panic buying behavior on the retailer's profit remains unchanged under the risk of supply interruption. However, considering an emergency order, when panic buying is not too intensive to lead to a loss of demand in the first period, it can still harm the retailer in some cases.

Roadmap for value chain analysis on broiler marketing in Makassar

Makassar City is a potential area for the development of the broiler marketing value chain. The main challenge in developing the broiler value chain is high price fluctuations, both input and output. Value chain analysis on broiler marketing in Makassar aims to identify and analyze value chain channels, distribution of costs and benefits, as well as market characteristics. Analysis of the distribution of costs and benefits is carried out using the Hayami method. The results of the research show that there are irregular price fluctuations and imbalances in market structure at each level of the value chain. Each marketing chain of broiler chickens in Makassar City gains a disproportionate profit at each marketing level with the value creation contribution made and the risks borne by each marketing level. The total profits of large retailers are greater than those of brokers and small retailers, while the value creation activities and risks of large retailers are smaller than those of brokers. Unnatural fluctuations in the price of chicken meat are the impact of the government’s lack of role as a supervisor and regulator in the value chain activities of broiler marketing. The development of the broiler marketing value chain must focus on regulatory oversight, improving access to markets, information and capital to increase the competitiveness of business actors.

Optimal decisions and coordination mechanism in a green supply chain with loss‐averse consumers in environmental quality

AbstractWe consider consumers' loss aversion in environmental quality and develop a two‐period game theoretical model to investigate the optimal pricing and environmental quality decisions for a green supply chain where a manufacturer sells products to consumers through a retailer. We then introduce a two‐part tariff contract to coordinate the supply chain for both periods. We suggest that optimal decisions in the second period depend on the reference point of the first period in the decentralized supply chain. A higher reference point leads to the increased environmental quality of products, prices, and profits of supply chain members in the second period. However, when the reference point is sufficiently high, the environmental quality will be lower to avoid excessive environmental investment costs. Furthermore, consumers' loss aversion reduces the environmental quality of products when the reference point is low. As consumers' loss aversion increases, the manufacturer's profit rises, while the wholesale and retail prices and the retailer's profit show a decreasing and then increasing trend. Finally, we find that a two‐part tariff contract enables the two‐period supply chain to be coordinated and achieve Pareto improvements in profit and environmental quality. This study sheds valuable light on understanding consumer environmental preferences and irrational behavior for supply chain decision‐making and green product design.

Research on the Impact of New Parts Price Increase on the Stability of Closed-Loop Supply Chain

In the closed-loop supply chain system of component remanufacturing, new parts suppliers are likely to be affected by certain factors that lead to sudden increases in supply prices, and this sudden increase in new parts prices may trigger the chain collapse of the closed-loop supply chain system and impact the stability of the closed-loop supply chain. Therefore, this paper combines closed-loop supply chain theory, evolutionary game theory, and system dynamics theory, which are internalized to construct a complex system model. Furthermore, the impact of different price increases of new parts on the stability of the closed-loop supply chain is analyzed through scenario simulation. The results show that a 25% increase in the price of new parts will delay the time for remanufacturers and retailers to reach a stable state of product flow, reduce the profitability of remanufacturers and retailers, and inhibit the willingness of remanufacturers to carry out high-green production in the early stage. A 50% increase in the price of new parts can break the closed-loop supply chain from the remanufacturer, severely undermining the stability of the closed-loop supply. According to the simulation results, this paper presents a timely government dynamic reward and punishment optimization scheme for remanufacturers to improve the tolerance level of the closed-loop supply chain for the price increase of new parts and to provide a reference for enhancing the stability of the closed-loop supply chain and optimizing the government supervision strategy.

Allocating the surplus induced by cooperation in distribution chains with multiple suppliers and retailers

The coordination of actions and the allocation of profit in supply chains under decentralized control plays an important role in improving the profits of retailers and suppliers in the supply chain. We focus on supply chains under decentralized control in which noncompeting retailers can order from multiple suppliers to replenish their stocks. The goal of the firms in the chain is to maximize their individual profits. As the outcome under decentralized control is inefficient, coordination of actions between cooperating agents can improve individual profits. Cooperative game theory is used to analyze cooperation between agents. We introduce multi-retailer-supplier games and show that agents can always achieve an optimal profit by cooperating and forming the grand coalition. Moreover, we show that there will always be stable allocations of total profit among the firms which cannot be improved by any coalition. In addition, we propose and characterize a stable allocation of the total surplus induced by cooperation.

The optimal decision for automobile enterprises considering shareholding strategies and dual‐credit policy

AbstractThis article develops a new energy vehicle (NEV) supply chain comprising a manufacturer and a retailer, considers the incentive effect of the dual‐credit policy, proposes three shareholding strategies (manufacturer shareholding, retailer shareholding, and cross‐shareholding), and investigates the optimal decisions of NEV enterprises. Our results indicate that increased credit trading price, manufacturer shareholding ratio, and retailer shareholding ratio all improve NEV low‐carbon levels and manufacturer profits. In contrast, the performance of retailer profits is more complex and requires a lower range of shareholding ratio in most situations to achieve growth. Meanwhile, the cross‐shareholding strategy is the optimal choice for the manufacturer. However, the retailer only sometimes benefits from a cross‐shareholding strategy, and the manufacturer shareholding strategy can lead to the highest retailer profits in most cases. Furthermore, these findings can provide critical managerial insights for automobile enterprises and governments.

Structural power of female executives and retailer profitability: A contingent resource-based perspective

Although the retail sector already has a much larger presence of female executives than other industry sectors, it remains unclear whether female executives should be endowed with more power to be effective leaders in the top management team (TMT) of a retail organization. Drawing on the TMT structural power perspective, we argue that structural power of female executives (SPFE) is crucial to improve a retailer’s operating performance measured by profitability. We find that SPFE is indeed positively associated with retailer profitability. Further, drawing on the contingent resource-based view, we hypothesize and find that comparable store sales and industry munificence positively, while inventory turnover negatively, moderate the relationship between SPFE and retailer profitability. Taken together, our research has important implications for public retailers to manage their TMT composition and power allocation.

Research on the Optimal Strategy of Supply Chain System Considering Carbon Emission Reduction Level

In response to the decision-making problem of a secondary supply chain system composed of manufacturers and retailers, the optimal strategy of a master-slave game was studied, considering carbon emissions reduction. We compared and analyzed the differences in optimal strategies with and without coordination mechanisms, and explored the impact of sensitivity on the optimal strategy. Research has shown that the optimal profit of manufacturers and retailers under coordination mechanisms is greater than that without coordination mechanisms; Wholesale prices, carbon reduction levels, retail prices, and manufacturer profits are all negatively correlated with price sensitivity and positively correlated with carbon reduction sensitivity, while retailer profits are the opposite; There is an optimal cost sharing ratio that maximizes retailer profits.

Internal incentives for carbon emission reduction in a capital-constrained supply chain: A financial perspective.

Capital constraints hinder enterprises' carbon reduction efforts and affect the sustainability of the supply chain. To alleviate this limitation, the core enterprise considers offering two financial-based carbon reduction incentive mechanisms: cost-sharing mechanism (CS) and preferential financing mechanism (PF). In a supply chain with the dual sensitivity of market demand to price and carbon reduction, we model each incentive mechanism, discussing their impact, value, and selection strategies. The results show that neither party under CS pursues an excessively high share ratio. Only a below-threshold sharing ratio can promote the supplier's carbon reduction behavior and improve efficiency for both parties. Conversely, PF has a stable incentive effect on the supplier's carbon reduction behavior and can effectively increase the retailer's profits. However, a reasonable carbon reduction standard is needed to attract the supplier. In addition, as market demand becomes more sensitive to carbon reduction, the feasible range of CS narrows and that of PF expands. We compare players' preferences of PF and CS and find a Pareto region in which all players prefer PF to CS. Finally, we test the robustness of our findings by an extending model. Our study provides guidance for supply chain decisions facing dual pressures of financial constraints and carbon reduction.

Pricing Game Models of Hybrid Channel Supply Chain: A Strategic Consumer Behavior Perspective

The current sales model combining online and offline channels meets the diverse requirements of consumers. However, consumers’ inter-channel switching behavior and strategic behavior also pose significant challenges to pricing decisions in the hybrid channel. Using game theory and consumer utility theory, a retailer-driven pricing model is developed to study the optimal pricing problem for each channel in a mixed-channel supply chain considering the characteristics of channel competition and the waiting behavior of strategic consumers. Study results show there is a negative correlation between the proportion of strategic consumers and the optimal pricing and profit of each channel, and as the proportion of strategic consumers rises, the optimal pricing and profit of manufacturers and retailers all trend downward. Incorporating strategic consumers into the pricing model will assist the supply chain in elucidating the behavior of consumer heterogeneity during various decision-making periods and in making reasonable pricing decisions. Effective guiding strategies, such as pre-discount and purchase restrictions, can reduce the profit loss caused by strategic consumer behavior. The optimal combination of pre-announcement discount and strategic consumer ratio can generate the greatest profit for retailers and the supply chain.

A bane or a boon? Profit‐margin‐guarantee contract in a channel with downstream competition

In recent decades, manufacturers have relied on giant retailers or e‐tailers to distribute their products. Given this evolution, some retailers have started demanding a profit‐margin‐guarantee contract (PMG contract), under which the manufacturer must ensure that the retailer's profit margin does not fall below a certain level (PMG rate). Conventional wisdom suggests that a PMG contract creates a life‐or‐death struggle for the manufacturer and that a retailer with a PMG contract can gain a competitive edge over his competitors. This study investigates the strategic impact of the PMG contract in a competitive environment. We consider a distribution channel consisting of one manufacturer and two competing retailers. In this channel, the manufacturer has signed a PMG contract with one retailer (signed retailer) but not with the other (unsigned retailer). Our analyses show that in response to the PMG contract, the manufacturer can adopt a “ cost‐independent” pricing strategy (i.e., setting the wholesale price independent of the production cost) to strategically trigger or void the PMG contract. For this reason, interestingly, the manufacturer is not always hurt by, nor does the signed retailer always benefit from, the PMG contract. Depending on the production cost and the downstream competition intensity, the PMG contract may yield a win–win, win–lose, lose–win, or lose–lose outcome for the manufacturer and the signed retailer. Moreover, the unsigned retailer may be able to free ride on the PMG contract, making her even better off under this unfavorable competitive situation. Nevertheless, the PMG contract cannot yield a win–win–win outcome for all firms, whereas a lose–lose–lose outcome may arise under certain conditions. Our results have useful managerial and regulatory implications.

Pricing coordination of a dual-channel supply chain considering offline in-sale service

With the rapid development of e-commerce, the problem of pricing conflicts between online and offline channels has become increasingly prominent. And the in-sale service has become an important factor influencing consumers' purchase decisions. To study the impact of in-sale service, this paper establishes a dual-channel supply chain model considering offline in-sale service. Using Stackelberg's game theory and backward induction, it solves the optimal pricing of supply chain members and makes comparisons in both cooperative and non-cooperative situations. Finally, it coordinates the supply chain through a two-part tariff contract. The results show that (1) The optimal wholesale price and offline retail price are positively correlated with in-sale service quality. And the opposite of the optimal online direct selling price. (2) With the quality of in-sale service improving, the retailer's profit will increase and then decrease but the manufacturer's profit will always decrease under non-cooperation. The total profit of the supply chain will rise and then fall under cooperation. (3) The two-part tariff coordination maximizes profits with the manufacturer reducing the wholesale price and the retailer paying a transfer cost. (4) Cooperative decision is better than the non-cooperative decision in terms of the supply chain as a whole.

The Distributionally Robust Inventory Strategy of the Overconfident Retailer under Supply Uncertainty

To factor in the retailer’s overconfidence when dealing with the inventory problem with supply uncertainty, this paper develops a distributionally robust optimization model by only considering the mean and variance of the yield rate distribution. We first show that overconfidence would prompt the retailer to order more under low-profit conditions, whereas it reduces the order quantity under high-profit conditions. The analysis results imply that the pull-to-center effect still exists when only supply uncertainty applies, and the asymmetry that the deviation is higher under low-profit conditions is proved. The performance of overconfidence is also characterized in the expected profits of both retailer and supplier. Numerical studies show that even though the retailer may suffer losses, the supplier can benefit from the retailer’s overconfidence in the low-profit case, which would positively increase the joint expected profit of the supply chain. Two extensions to the base model are also considered, including the scenario with both demand and supply uncertainties and an overconfident multi-product problem with budget constraints. This research provides tractable results to predict how the decision-maker is biased, and such insights would help the applications of de-biasing techniques in practice.

When showrooming is not a threat: Uncovering opportunities for showroomer retention

Showrooming is an increasingly common behavior that challenges the profitability of store-based retailers when the purchase is done at a competing online retailer. However, showrooming can also be a loyal behavior, although few studies differentiate between loyal and competitive showrooming. This study aims to provide multichannel retailers with knowledge about how to retain consumers who enter their stores with the intention to showroom. To this end, the influence of situational variables and loyalty towards the retailer are considered. With information from 466 showroomers and applying the fsQCA methodology, the results allow us to conclude that online price advantage and salesperson quality play a role in favoring loyal showrooming and preventing competitive showrooming respectively. Additionally, product category and the purchase device influence the transition from competitive showrooming intention to behavior. From these results, several managerial implications are proposed for store-based retailers.

Manufacturer encroachment strategies and decision timing considering the product traceability preferences under e‐commerce

AbstractBlockchain technology is applied for product traceability in e‐commerce supply chains. In this context, the paper investigates the channel problem and decision timing problem considering product traceability. Using game‐theoretic framework, the manufacturer encroachment strategies, order quantities and profits under different channel structure, and traceability level are characterized. Research shows that selling traceability products can expand potential market demand and increase the sales volume of products and the profits of manufacturers and retailers. Under encroachment, members with information advantage can maximize their own profits. Additionally, manufacturers can regain the high ground by adjusting traceability levels to influence wholesale prices.

Research on low-carbon dual channel supply chain considering product substitution under government carbon tax and low-carbon subsidy.

Since dual channel supply chain has become one of the main modes of supply chain, its research has acquired great significance. This paper constructs a low-carbon dual channel supply chain composed of one manufacturer and one retailer. The manufacturer produces low-carbon product and high carbon product with substitution relationship. The retailer sells high carbon product in traditional channel. The manufacturer also sells low-carbon product in direct channel. The government, manufacturer and retailer conduct a three-level Stackelberg game. This paper studies the optimal decisions of the government, manufacturer and retailer under the three modes of carbon tax + subsidy, carbon tax only and subsidy only. It has been found that for social welfare, the carbon tax + subsidy model is higher than the subsidy model and carbon tax model. For manufacturer profit, the subsidy mode is the highest, followed by the carbon tax + subsidy mode. For retailer profit, the carbon tax + subsidy model is equal to the carbon tax model. The increase in the proportion of consumers who prefer high carbon product in the total market or product cost of low-carbon product, will increase the profit of traditional channel and reduce the profit of direct channel.