Profits Of Supply Chain Members Research Articles

Differential Pricing and Emission Reduction in Remanufacturing Supply Chains with Dual-Sale Channels under CCT-Mechanism

In order to make optimal decisions for pricing and emission reduction, a remanufacturing supply chain system with dual-sale channels is investigated. With regard to the preferences of consumers for different channels and carbon cap-and-trade mechanisms, profit-maximization models are developed on supply chain members and systems in decentralized and centralized cases. Based on a backward induction, the corresponding formulae for decision variables are obtained. Then the effect of the industry emission control coefficient is analyzed and the optimal decisions of two cases are compared. Finally, the coordination mechanism and numerical analysis are presented. The result indicates that: (1) As the free carbon allowances granted by the government to the manufacturer increases, the investment in carbon reduction from the manufacturer will increase. As the industry emission control coefficient increases, the carbon emissions per product and the prices of new and remanufactured products will decrease, while the demands of the new and remanufactured products and the profits of supply chain members and systems will increase. (2) As the direct sale channel preference coefficient increases, the profits of the manufacturer and the system will increase while the retailer’s profit will decrease. Correspondingly, the carbon emissions of unit product will decrease, and the sales of the direct sale channel will increase while the sales of the retail channel will decrease. (3) The decision in the coordinated case not only ensures emission reduction and system profit to reach the level of the centralized case, but also raises the profits of supply chain members in the decentralized case. Therefore, it is preferable to other decisions. (4) As the carbon trading price increases, the emission reduction investment from the manufacturer will increase while the profits of the supply chain and its members will increase.

Differential Pricing Models on a Remanufacturing Supply Chain Considering Product Quality Upgrade under Carbon Trading Mechanism

To study the influence of product quality upgrade on pricing decisions, a remanufacturing supply chain with a manufacturer and a retailer is investigated. Based on the carbon trading mechanism, differential pricing decision models for the remanufacturing supply chain without and with product quality upgrade are developed and solved by the backward induction through the mathematics and engineering calculation software maple18. Through the comparative analysis, we get the following results: (1) New product quality upgrade is beneficial to raise the sales price and expand market demand of new products and the profits of supply chain members and system, but it will increase total carbon emissions. (2) To reduce total carbon emission, the government should encourage enterprises to invest in emission reduction and guide consumers to buy remanufactured products.

Research on Quality Investment and Pricing Decision Sequence of Complex Equipment Supply Chain Considering Manufacturer's Incentive Strategy

For the demand uncertainty of complex equipment two-stage supply chain, the influence of different quality investment and pricing decision sequence on expected revenue and demand, with the consideration of incentive strategy between manufacturers to suppliers, manufacturer determines the basic quality and compensation for suppliers, suppliers determine the parts wholesale price and quality investment, then manufacturer decides the complex equipment product price. This paper set up two quality investment and price decentralized decision sequence: a Stackelberg game model, a vertical Nash game. Conditions of suppliers decisions are obtained, and the changes of pricing, quality investment, demand and profit of supply chain members are analyzed. It shows that making quality investment and wholesale price decisions simultaneously is best for manufacturers and integrated supply chain; determining quality investment and then set the wholesale price at the same time is the best choice for the whole suppliers. For individual suppliers, there is no absolutely dominant decision-making sequence. By comparing the model and different parameters, the paper provides a management basis for improving the quality and performance of supply chain subjects.

Dynamic generic and brand advertising decisions under supply disruption

Enterprise captures market share from competitors through brand advertising and increases consumer demand for this category of products through general advertising. In this paper, considering a supply chain with a manufacturer who is responsible for generic advertising and a retailer who undertakes brand advertising, a Stackelberg differential game-theoretic model is established to examine the impact of supply disruption faced by the manufacturer on the optimal decision-making and profits of supply chain members. When the supply of raw materials is disrupted, the optimal advertising strategies and advertising subsidy scheme designed for the initially estimated product sales need to be revised. The key to solving this problem is to explicitly consider possible deviation profit margins of supply chain members and total market demand for products caused by changes in the original product supply. Considering that the deviations of the profit margins and the total market demand are arbitrary, we analytically derive several propositions and obtain the optimal advertising strategies and the advertising subsidy scheme before and after the supply disruption. Then, we explore the impact of supply disruption through numerical analysis and provide management insights that are helpful for managers to re-design the advertising strategies and advertising subsidy schemes under supply disruption.

Pricing strategies and profit coordination under a double echelon green supply chain

The green characteristics of the product will not only attract more environmental consumers, but also affect the cost of the enterprise. In order to investigate equilibrium decisions and profit coordination methods of green supply chain, a set of Stackelberg game models considering different pricing strategies, profit coordination modes and information pattens are constructed and analyzed, in which two competitive retailers purchase a type of green product from a manufacturer who commits to green investment. We discover that the pricing strategy has an evident impact on the profit level of supply chain members but has no effect on the green degree of the product, both the manufacturer and the retailer with higher market potential tend to choose consistent wholesale price, while the retailer with lower market potential prefers inconsistent wholesale price. In addition, the green degree which reflects the product’s environmental protection degree of the manufacturer is positively related to environmental consciousness of customers and negatively correlated with green degree cost coefficient. Furthermore, an improved coordination model based on two-part tariff can not only reach the profit level under the centralized scenario, but also make the retailers benefit from the profit increasing. Finally, an asymmetric information model with uncertain market demand and asymmetric information between retailers is studied. The results show that the equilibrium profits of supply chain members are obviously affected by uncertain demand and asymmetric information. The retailer with information advantage gains more profit than the retailer without information advantage when the demand is uncertain. Those conclusions are conducive to improving the cooperation level of members and promoting the sustainable development of green supply chain.

The Game Analysis of Low Carbon Supply Chain Emission Reduction Considering Channel Power under the Concern of Fairness

The emission reduction strategies of different channel power structures is studied under the fair, neutral and fair concerns of manufacturers, and compares the emission reduction levels, wholesale and retail prices, and the changes and differences in the profits of supply chain members under various circumstances. The research shows that the increase of emission reduction cost factor is not conducive to the improvement of emission reduction level, price and profit. The profit level of manufacturer under the manufacturer-led structure is not conducive to the manufacturer-led structure due to other structures, but is conducive to the improvement of the profit level of manufacturer under other structures. Manufacturer’s equity concern behaviour is beneficial to the improvement of manufacturer’s utility, in which the equity concern factor should be kept at a certain level under Nash vertical structure. Equity concerns and emission reduction strategies under decentralized decision-making are not conducive to the improvement of the overall supply chain effectiveness.

A Coordination Mechanism of Supply Chain with a Retailer and Two Competitive Suppliers

To deal with coordination problem of a supply chain consisting of two competitive suppliers and a dominant retailer, considering these factors such as cooperation effort degrees and competition on the supply chain members, we establish a two-stage model considering cooperation effort degrees and competition of the suppliers from the perspectives of decentralized decision and centralized decision and exploit it to discuss the optional decisions and explore the impact of cooperation effort degrees on the profits of supply chain members. Then, we use a group negotiation model to establish a coordination mechanism. The results reveal that the decision variables and overall profit of the supply chain of suppliers and retailers under centralized decisions are better than those under the decentralized decisions. Besides, the degree of competition and price sensitivity have positive and negative effects on the efforts of suppliers and retailers, respectively. Meanwhile, the degree of cooperation between suppliers and retailers affects the profits of supply chain members and the whole supply chain in different degrees. Finally, the proposed value-added profit distribution mechanism can effectively deal with conflict problem and guarantee supply chain members and supply chain to maximize their profits and adopt the centralized decision.

Robust optimization approach for pricing and shelf space decisions with uncertain demand

Pricing and shelf space allocation are two main operational decisions in retailing industry. This study simultaneously optimizes these two decisions in a supply chain with two manufacturers and one retailer under uncertainty of demand and price sensitivity parameters. Two manufacturers have different conditions in terms of parameters affecting demand and production. A robust optimization model and an exact solution approach are developed to find the optimal solution. The results show that price sensitivity, market potential and production costs can have a synergistic effect on optimal values. Moreover, the market potential can be relied on in managerial decisions as it has significantly positive impact on profitability. This parameter is found to be the most important tool for securing profitability of supply chain members.

Green design strategies of competing manufacturers in a sustainable supply chain

In view of the intensive green product design race in manufacturing industry, we construct Stackelberg models (NMG, OMG, and TMG models) to study the green design competition between two manufacturers with one common retailer. Using analytical and numerical studies, we examine impacts of relevant parameters on optimal decisions and profit of supply chain members, and explore manufacturers’ green design strategy adoption and pricing strategy of supply chain members. Our results show that the ratio of green design’s depressing effect on rival’s demand over stimulating effect on own demand plays an important role. When it is sufficiently large, the prices of non-green product and profit of manufacturers can be counter-intuitively stimulated by green design cost parameter, and depressed by green design’s stimulating effect on own demand. A non-green manufacturer facing a non-green rival will not turn green only when he is much weaker than the rival in terms of market potential, and the adoption of green design is rather easy and has a large ratio between its two effects on demand. Also, a non-green manufacturer facing a green rival can benefit from strategically not adopting green design when demand stimulation is small. The retailer is most likely to be in favor of both manufacturers’ adoption. When a non-green manufacturer turns green, he will always adopt a higher wholesale pricing strategy. The other manufacturer fine tunes wholesale price hinging on the ratio between green design’s two effects on demand. The retailer follows suit when adjusting the retail prices.

Bundling or Unbundling? Pricing Strategy for Complementary Products in a Green Supply Chain

Retailers usually sell complementary products jointly with a discounted price to attract more consumers. However, the difference of complementary degree between products leads to the diversity of pricing. In parallel, with the development of green supply chains, the extra cost of manufacturers to conduct ecological product design makes the pricing of complementary products further complicated. Thus, it is important to clarify the pricing strategy for complementary products in a green supply chain. Based on the Stackelberg games between two manufacturers and a retailer, this paper constructs three pricing models to simultaneously analyze the changes in the optimal profits of supply chain members and the optimal green manufacturing degree of complementary products. The results demonstrate that: (i) In most cases, two manufacturers prefer the pure bundling pricing strategy, but the strategy preference of the retailer is complex. (ii) The green manufacturing is mutually beneficial for complementary manufacturers and worth advocating. (iii) The increasing sensitivity of consumers to the green manufacturing level of one product will also be detrimental to the improvement of the optimal green manufacturing level of its complementary products.

Pricing and Coordination of Green Closed-Loop Supply Chain With Fairness Concerns

Due to serious environmental pollution and waste of resources, the government advocates the development of a sustainable circular economy, and academia and manufacturing are gradually paying attention to the green closed-loop supply chain. In this paper, a green closed-loop supply chain consisting of a manufacturer and a retailer is considered. The manufacturer would cost a great deal to recycle waste products for remanufacturing while developing and producing green products, which may concern about the fairness of the profit distribution. Based on game theory, four different game scenarios are proposed, which are a centralized model and three decentralized models including manufacturer considering fairness neutrality, the retailer considering manufacturer’s fairness concerns and the retailer ignoring manufacturer’s fairness concerns. This paper compares and analyzes the optimal decision-making of the manufacturer and retailer in different scenarios, discusses the impact of manufacturer’s fairness concerns on various decision variables, the profits of supply chain members and the overall profits, and then studies the effect of green efficiency on green closed-loop supply. The results show that this behavior would cause less damage to the green closed-loop supply chain and is more conducive to ensuring the environmental quality of green products, recycling and reuse of waste products and consumer rights when the retailer considers the manufacturer’s fairness concerns behavior. By designing a revenue-sharing contract to coordinate the supply chain, it can effectively achieve the Pareto improvement of the green closed-loop supply chain with fairness concerns.

Stimulating sustainability investment level of suppliers with strategic commitment to price and cost sharing in supply chain

Abstract Sustainable development is a global issue requiring supply chain members to invest in sustainable technology to protect the environment. Manufacturers can motivate suppliers to increase sustainability investment level through various types of contracts, such as price commitment and cost-sharing contracts. In this context, we consider a two-echelon sustainable supply chain with a manufacturer and a supplier. We use price commitment as basis to study several scenarios, such as centralized/decentralized decision system, pure price commitment contract, commitment to wholesale price and cost-sharing contract, and two-part tariff contract. Accordingly, we mainly discuss if these contracts can improve the sustainability investment level of suppliers and if Pareto improvement can be achieved. Results show that the pure price commitment contract can neither improve suppliers sustainability investment level nor coordinate the supply chain. By contrast, with a combination on price and sharing ratio, commitment to wholesale price with cost sharing is beneficial in enhancing suppliers sustainability investment level and can achieve the Pareto improvement in profit for supply chain members. Lastly, numerical results reveal that main contract parameters, such as basic wholesale price, sensitivity of wholesale price to sustainability investment level, and coefficient of sustainability effect, greatly influence the profits of supply chain members. The commitment to wholesale price with cost-sharing contract can likewise achieve the Pareto improvement in a certain condition.

A game theoretic approach to coordinate price promotion and advertising policies with reference price effects in a two-echelon supply chain

In this paper, the price promotion and manufacturer national advertising are investigated in a manufacturer-retailer supply chain with reference price effects of consumers taken into account. A centralized game is studied followed by the two Stackelberg games of “consumer price promotion” and “retailer-consumer price promotion”. In the Stackelberg games, the manufacturer plays the role of the leader and the retailer is the follower. The results obtained indicate that the reference price and the memory factor of the costumer have profound effects on the profits of supply chain members, optimal depth of price promotion and advertising level. If sensitivity of the consumer to the gap between the price and the reference price is large enough, reference price has a considerable effect on the consumer's tendency to buy and the price promotion increases channel profits. Also, it is observed that the memory of the costumer has a positive effect on profits of supply chain members. Moreover, it is also shown that there exists an indifference point for the memory factor at which the reference price impact factor has no effect on the optimal values of the decision variables. Finally, it is observed that channel efficiency is improved by advertising.

Remanufacturing Models Under Technology Licensing with Consideration of Environmental Issues

Recently, the environmental and economic benefits of remanufacturing result in increasing interest of this concept. Due to supreme importance of this issue, in this paper, a closed-loop supply chain (CLSC) including a manufacturer, a distributor, and third-party logistics provider is considered. Three multi-level leader-follower Stackelberg game models are presented in order to investigate whether a manufacturer in addition to manufacturing new products should do remanufacturing or sets a fee for technology licensing of distributors and cooperate with them in remanufacturing. Furthermore, we conduct a sensitivity analysis to show how government can mitigate the bad economic, environmental, and social impacts of remanufacturing by setting an emissions tax price and evaluation of impacts of changing remanufacturing parameters on the profit of supply chain members on the three proposed models.

Greenness and Pricing Decisions of Cooperative Supply Chains Considering Altruistic Preferences.

With the development of the economy and science technology, global resource shortages and environmental pressures have become the focus of attention. More and more consumers tend to buy non-polluting and environmentally friendly green products, and many manufacturers and retailers are beginning to produce or sell green products to enhance their competitive advantage in the market. Considering the green preference attributes of consumers, the altruistic preference is introduced into the supply chain, and we establish four models: two cooperative manufacturers and one retailer are completely self-interested, one retailer has altruistic preference, two cooperative manufacturers have altruistic preferences, and two cooperative manufacturers and one retailer have altruistic preferences. We address the optimal greenness and pricing decisions of supply chain members, and analyze the impact of altruistic preferences on supply chain decision-making and profits. The results show that the altruistic preference coefficient can significantly affect the decision-making and the profits of supply chain members, and when two manufacturers and one retailer consider altruistic preferences, the altruistic preference coefficients adopted by the three parties are in the certain ranges, the supply chain members’ altruistic preference coefficients can increase the whole supply chain profit. Through analysis, in the three cases where the retailer has altruistic preferences, two manufacturers have altruistic preferences, and two manufacturers and one retailer have altruistic preferences, two manufacturers should adopt higher altruistic preference coefficients, and the retailer should adopt a lower altruistic preference coefficient, and the product greenness under the three altruistic preferences is higher than the product greenness when there is no altruistic preference.

A Coordinated Revenue-Sharing Model for a Sustainable Closed-Loop Supply Chain

This study takes a sustainable closed-loop supply chain composed of one manufacturer and two price-competitive retailers as the object and considers the two-way risk aversion characteristics of manufacturers and retailers in examining the coordination mechanism in a closed-loop supply chain. Using game theory, optimal decision-making on wholesale prices, retail prices, and recycling prices are explored under decentralized and centralized decision-making scenarios, and representative expressions are established. By analyzing the effects of the risk aversion coefficient on players’ optimal strategies, we found that the manufacturer’s and retailers’ risk aversion coefficients have different effects on the wholesale price, retail price, and recycling price under decentralized decision-making, while in a centralized decision-making scenario, the effects are the same. The comparison also found that the wholesale price and recovery price under the centralized decision-making scenario are higher than those under decentralized decision-making. To achieve closed-loop supply chain coordination, we propose a revenue-sharing contract that we demonstrate by coordinating price competition with risk aversion and analyze a range of parameters that influence the revenue-sharing contract. The results show that the proposed contract can increase the profits of supply chain members by identifying the optimal revenue-sharing ratio.

The revenue and cost sharing contract of pricing and servicing policies in a dual-channel closed-loop supply chain

In a dual-channel closed-loop supply chain (CLSC), the products are sold online and offline in the forward channel, while the retailer provides reverse-channel service to recycle used products for remanufacturing in the offline channel. The problem of forward channel conflicts and improving the quality of reverse-channel recycling products have become important issues that need to be addressed urgently. Therefore, we combine the revenue-sharing contract in the forward channel with the channel investment cost-sharing contract, and introduce the Stackelberg game to investigate the contract coordination mechanism. Furthermore, we try to mitigate the problem of poor-quality recycling due to information asymmetry in the recycling channel by grading collection. The results show that the proposed contract can increase the profits of supply chain members in both the online and the offline channel by properly setting the revenue-sharing ratio and cost-sharing ratio. In addition, the revenue-sharing–cost-sharing mechanism in the dual-channel CLSC can increase the retailer's efforts regarding servicing and recycling. Finally, the strategy of grading collection promotes the efficiency of recycling.

Pricing decisions for substitutable products with green manufacturing in a competitive supply chain

Abstract In this paper, we examine the pricing strategies in a two-stage supply chain with two competitive manufacturers and one retailer. We address six game models: the centralized model (Model I), the MS-Bertrand model (Model II), the MS-Stackelberg model (Model III), the RS-Bertrand model (Model IV), the RS-Stackelberg model (Model V) and the cost-sharing contract model (Model VI) to explore the optimal pricing strategies of substitutable products. We address the optimal green manufacturing level, retail prices, wholesale prices and the profits of supply chain members as well as the whole supply chain under different models. Numerical examples are provided to demonstrate the efficiency and effectiveness of the proposed models. First the impact of green investment on the green manufacturing level and supply chain performance is examined. Then the impact of price elasticity, cross-price sensitivity and green manufacturing coefficient on the green manufacturing level is analyzed. We find that the centralized model is the best, and the cost-sharing contract model will be better than the four decentralized models when the cost-sharing proposition is in a certain interval. Additionally, in decentralized scenarios, the Stackelberg model has an advantage for manufacturers while the Bertrand model is superior for the retailer. Our results also indicate that green manufacturing will benefit the manufacturer involved in green investment.

The Effect of Marketing Effort on Dual-Channel Closed-Loop Supply Chain Systems

This paper explores a dual-channel closed-loop supply chain (CLSC) system consisting of a manufacturer and a retailer. The manufacturer is the CLSC Stackelberg leader. We investigate the effect of exerting marketing effort on the optimal decisions and profits of supply chain members by considering several marketing effort supported models, namely the models when the manufacturer is the investor, the retailer is the investor, and the centralized CLSC system, respectively. We propose a two-part tariff contract for coordinating the CLSC. We analytically reveal that the two-part tariff contract can coordinate the CLSC when the manufacturer is the investor but unable to coordinate supply chain when the retailer is the investor. Finally, we present the numerical analysis to uncover insights on how the consumers' preference toward the direct channel affects the optimal decisions in the dual-channel CLSC system.

Prisoner’s dilemma on behavioral choices in the presence of sticky prices: Farsightedness vs. myopia

When making decisions in a dynamic environment, myopic supply chain members tend to ignore the future effects of their decisions on the evolution of state dynamics. By contrast, far-sighted decision-makers consider about the impacts of current decisions on both current profits and future profits. In order to study how behavioral choices affect the operation decisions and profits of supply chain members, we develop a differential game with sticky prices, where one manufacturer purchases components from one supplier and makes final products for end customers. The supplier decides on its wholesale price while the manufacturer sets its production quantity. Either of supply chain members has two behavioral choices: myopia and farsightedness. We derive and compare equilibrium solutions under four different behavioral combinations. Our analysis shows that there always exists a prisoner’s dilemma caused by behavioral choices: farsightedness is a dominant strategy for either the supplier or the manufacturer, but both to act myopically makes both of them better off. Furthermore, comparing with other scenarios, the whole supply chain obtains the highest profit when both players are myopic. In addition, we introduce a revenue sharing contract with static wholesale price to mitigate the adverse impacts of the prisoner’s dilemma.