Retailer-led Supply Chain Research Articles

Uncertain retailer-led supply chain contract design under asymmetric delivery reliability information: sequential ordering and pricing decisions

Uncertain retailer-led supply chain contract design under asymmetric delivery reliability information: sequential ordering and pricing decisions

Research the effect of anticipated regret and fairness concerns on retailer-led supply chain.

Considering the consumer's anticipated regret caused by price discount, the impact of anticipated regret and manufacturers' fairness concerns on pricing and profits is explored, and a revenue-sharing contract to optimize the profits of supply chain is explored. In centralized decision-making model with manufacturer's fairness neutrality and retailer-led decentralized decision-making model with the manufacturer's fairness concerns, numerical simulation and model comparison is used to analyse regret sensitivity coefficient, consumer heterogeneity, the fairness concern coefficient on pricing decisions and profit coordination. Our results reveal that consumer's anticipated regret has a negative impact on product prices, retailer's profit and manufacturer's profit. Manufacturer's fairness concerns also increase product price and reduce profits of all parties. Retailer-led supply chain can share the revenue to achieve Pareto optimization. When formulating promotional strategies, retailers should consider the characteristics of anticipated regrets of consumers.

Impact of pricing leadership on blockchain data acquisition efforts in a circular supply chain

Motivated by the industrial observation of the increasing application of blockchain in the supply chain and its improvement in terms of consumer demand, this study examines the impact of investment decisions of blockchain data acquisition nodes upstream and downstream of the supply chain on firms’ product recycling and pricing, market demand, and profits. The influences of different pricing leadership (i.e. supplier-led vs. retailer-led) in a supply chain are also thoroughly investigated. First, the presence of a strong retailer dramatically reduces suppliers’ incentive to invest in blockchain. However, the supplier is still likely to invest more in a retailer-led supply chain than that in a supply chain led by itself under certain conditions; that is, the cost of blockchain is relatively small, or consumers’ sensitivity to blockchain or product recycling benefits is rather large. Second, the total number of blockchain data acquisition nodes, market demand, and supply chain profit in a retailer-led supply chain are higher than in a supplier-led supply chain. Finally, interestingly, the supplier will be better off in a retailer-led supply chain when the return effect of product recycling is relatively high, while the cost-effectiveness of blockchain investment is relatively low.

Does the carbon trading mechanism affect social and environmental benefits of the retailer-led supply chain: Strategic decisions of emissions reduction and promotion

Governments, enterprises, and customers have become more concerned about environmental protection. Following the world’s largest carbon trading market (EU ETS), China has also implemented a market-based carbon trading mechanism (CAT) to reduce CO2. Simultaneously, customers have low-carbon preferences for environmental products. Thus, the enterprises’ strategic decisions and collaboration modes have changed. This article develops the Stackelberg game model to explore the impacts of CAT and customers’ low-carbon preference on the carbon emission reduction and promotion strategies in a retailer-led supply chain (such as RT-Mart, Walmart, Amazon, etc.). In this model, the retailer decides whether to promote environmentally safe products and the manufacturer decides whether to reduce CO2. We find that carbon trading market price and customers’ low-carbon preference are key factors influencing the retail price, total carbon emissions, and social welfare. Interestingly, there is not always a positive correlation between customers’ low-carbon preference and social welfare. To achieve Pareto improvement of social welfare, manufacturers and retailers require co-optimization. Theoretically, our research enriches the research streams of the CAT policy and socially responsible operations of the supply chain. Moreover, managerial insights are provided for retailer-led supply chain stakeholders and emission reduction regulators, which contribute to enhancing the social and environmental benefits of the supply chains.

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

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

Dynamic game analysis on pricing and service strategy in a retailer-led supply chain with risk attitudes and free-ride effect

PurposeThe convenience of online shopping enables the manufacturer to develop direct channels. To counter manufacturer encroachment, the retailer tends to provide presale service to attract more customers. Meanwhile, the service provided by the retailer also has a positive impact on the manufacturer's sale volume, which is usually called the showrooming effect or free-ride. The purpose of this paper is to explore the dynamic game of pricing and service strategy in a dual-channel supply chain with risk attitudes and free-ride.Design/methodology/approachThis paper considers the risk attitude, characterized by mean-variance theory. First, the optimal pricing and service strategy of two static models under two scenarios are derived. Second, dynamic games are then considered to explore the evolution of the decisions. The classical optimization method is used to solve the problem, and numerical experiments are done to analyze the complex characteristic of the system.FindingsThe result shows that the retailer is willing to provide a higher level of service if his risk preference is higher. The offline retail price and online retail price are positively related to the retailer's risk preference. Besides, the free-ride behavior can reduce the offline retail price and the level of service provided by the retailer. Furthermore, the study indicates that the system is more likely to enter chaos if the retailer's risk preference is higher. Additionally, consumers' service sensitivity and cost coefficient affect the stability of the system.Originality/valueThe study provides a different perspective on supply chain management considering risk attitudes and free-ride The findings of the study can offer theoretical and practical guidance for enterprises to choose adjustment measures according to their risk preference.

Green product diffusion: The impacts of asymmetric retailers’ strategic product decisions

With the continuous deterioration of the environment and the improvement of consumer green awareness, more and more producers began to launch green products. For example, many automobile companies began to produce new energy vehicles. However, whether a new product can be successfully introduced to the market depends not only on the product’s quality improvement, but also on its sales channels. In this paper, we model a supply chain composed of a manufacturer and two asymmetric retailers to analyze how the retailers’ strategic decisions affect the introduction of a newer green product. Backward induction is adopted to survey the dynamic decisions of the supply chain members. Given the leading retailer’s product choice, the follower-up retailer’s product choices and decision optimums are defined by specific thresholds of consumer green valuation and production costs. Results show that the follower-up retailer would make completely different responses within a same threshold range when the leading retailer takes different product decisions. In other words, even if the leading retailer chooses green new products, the follower will not necessarily imitate the choice of green products, and it could be more advantageous to choose the old generation products (for price competition). Furthermore, results show that green product introduction does not necessarily bring Pareto improvement to both the two retailers. Finally, we derive the specific intervals in which green products can be successfully introduced into the market. Our modelling work and results provide instructive managerial insights on green product introduction in a retailer led supply chain.

Collaboration and sharing in a retailer-led supply chain with yield uncertainty and loss aversion

Collaboration and sharing in a retailer-led supply chain with yield uncertainty and loss aversion

The role of retailer’s app channel in a supply chain with quality decision and different power structures

The role of retailer’s ability to add app channel in a supply chain with quality decision and different power structures is investigated in this paper. Applying a game-theoretic approach, we find that, first, under certain conditions, retailer’s ability to add app channel can induce the manufacturer to adjust the wholesale price and product quality in the opposite direction with the manufacturer being the leader. Second, for the manufacturer and the retailer, retailer’s ability to add app channel can result in two distinct profit situations regardless of the power structure of supply chain: win–win and lose–win. Moreover, in a retailer-led supply chain, adding app channel will make the whole supply chain better off when the return cost is relatively low or high, while make the whole supply chain worse off when the return cost is moderate. Third, we identify a region of the return cost under which the manufacturer, the retailer, the supply chain and consumers can gain from adding app channel, leading to a Pareto improvement.

Store brand introduction and quantity decision under asymmetric cost information in a retailer-led supply chain

The paper focuses on the topic of introducing store brands under asymmetric cost information in a retailer-dominant supply chain. We assume that the manufacturer privately knows the production cost for national brands, while the retailer only knows the distribution of the cost information. There exists a signal game between the manufacturer and the retailer after introducing store brands. In such case, when the true production cost for national brands is high, the manufacturer has to distort downward the production quantity to make the retailer believe the production cost is indeed high. Such distortion may amplify double marginalization. As a result, the retailer becomes worse off while the manufacturer becomes better/worse off from introducing store brands. In addition, the manufacturer does not share information to the retailer without introducing store brands, while the manufacturer may prefer to sharing information to the retailer with introducing store brands.

Collaboration and sharing in a retailer-led supply chain with yield uncertainty and loss aversion

This paper addresses a retailer-led supply chain in which a loss-averse supplier subject to yield uncertainty sells products to a risk-neutral retailer facing stochastic demand. An option contract is introduced to develop collaboration and sharing models to improve channel performance and achieve supply chain coordination. We derive the closed-form solution for the optimal production policy, and show that option contract is a viable alternative to effectively mitigate the serious conflicts between the dominant retailer and the supplier, which leads to a win-win situation. We analyse how the loss-averse behaviour of the supplier affects the production strategy and contract design. Also, we discuss how to share profit between the retailer and the supplier to achieve Pareto-improvement. In addition, we examine the role of option contract for achieving channel coordination and Pareto-improvement under loss aversion and single-side uncertainty. [Received: 5 November 2019; Accepted: 31 May 2020]

Logistics service outsourcing choices in a retailer-led supply chain

Motivated by the practice, we investigate logistics service outsourcing choices in a retailer-led supply chain where the retailer offers logistics service by itself or outsources it to a third party logistics service provider. Results show that offering logistics service by the retailer is not always the optimal choice although it alleviates the double marginalization effect. Regarding the value of cost-sharing contracts in such a supply chain, we find that a variable cost sharing contract benefits the retailer but hurts the logistics service provider. When a part of fixed cost is shared by the retailer, a win–win outcome will be achieved.

System dynamics-based model for supply chain organizational collaboration

In order to explore the impact of the system-driven supply chain, collaborative operations, and organizational characteristics on supply chain operational performance, this paper based on the system dynamics method to simulate the established information collaborative supply chain model, analyze market demand data, inventory before and after the supply chain sharing The changes of inventory fluctuations in the supply chain and related calculations are compared with the simulation results under the current model to prove the importance of implementing information collaboration in the supply chain of a large retailer-led supply chain. The research in this paper shows that with the supply chain information collaboration model, the average value of the manufacturer’s order quantity has dropped by 30.4%. Affected by this, the dispersion coefficient has also dropped from 0.76 to 0.6, and the average number of orders in the distribution center has also dropped by 12.2%; With the supply chain information synergy model, the average value of the raw material inventory of manufacturers has dropped significantly, from 3400 in the current model to 2500 in the information synergy model, a decrease of 27%, the standard deviation has also decreased by 57%, and the dispersion coefficient has dropped from 0.98 to 0.50; The standard deviation rate of the inventory of the distribution center is 30%; from the perspective of the overall retail supply chain, the inventory has fallen by 14%, the standard deviation has fallen by 34%, and the dispersion coefficient has dropped from 0.76 in the current model to the information collaboration model. 0.6, it can be seen that the mode of supply chain information coordination has a great effect on reducing supply chain costs and improving supply chain efficiency.

Greening products in a supply chain under market segmentation and different channel power structures

This paper investigates product line expansion in which a green version of an existing conventional brown product is launched. We use a game-theoretic approach to study a supply chain consisting of one retailer and one manufacturer, either of which can be the leader of the supply chain. Our model assumes a market segmented based on the consumers’ willingness to pay for the green feature of the product and incorporates a fixed cost related to launching the green product. Through our analysis, we define four pricing and positioning strategies for brown and green products. We explicitly express the conditions under which it is more profitable to expand the conventional product line with a green product and determine the region where each pricing strategy applies in the centralized system as well as in the two decentralized systems with each member as the leader of the supply chain. Our results also show that a manufacturer-led supply chain is better prepared than a retailer-led supply chain to overcome the fixed cost, launch the green product, and grasp benefits from the growth of the green consumer segment at an early stage of its development. We design two coordination mechanisms that allow the decentralized supply chain to achieve its first-best performance.

Supply chain coordination with risk-averse retailer and option contract: Supplier-led vs. Retailer-led

We investigate the coordination of both the supplier-led and the retailer-led supply chains under option contract. Specifically, we consider the option pricing, ordering, and producing problems in a supply chain consisting of a risk-neutral supplier and a risk-averse retailer behaving under the conditional value-at-risk (CVaR) criteria. The results show that, in a supplier-led supply chain, the supplier's production quantity equals the retailer's order quantity only if the penalty cost is high enough. In a retailer-led supply chain, the retailer will set the option price as low as possible in order to shift more risks to the supplier. By comparing results under both supply chain structures, we find that the retailer purchases more options at a lower price in the retailer-led supply chain, but the supplier's production quantities remain the same under both supply chain structures. Finally, we prove that both the supplier-led and the retailer-led supply chains can be coordinated under the same conditions, which is different from the conclusions obtained by previous studies.

Green product design considering functional-product reference

Consumers' reference behaviors are largely ignored in previous research on green product design. This study investigates a green-product design problem in a two-echelon supply chain by considering consumers' reference behaviors, where the reference point is associated with a functional product that has a utility-based reference form. Tax regulation and the environmental awareness of consumers are also considered in investigating their effects on the green-product design and pricing strategies. Analytical results show that consumers' reference behaviors significantly influence the green-product design and pricing decisions. When faced with consumers who have different recognition levels of reference, the product design and pricing strategies should be adjusted. Tax regulation and consumer green awareness also affect the firms' decisions. Tax regulation can encourage firms to increase the greenness degree of their product only when the tax level or the green development cost is at a low level, while consumer green awareness always plays a positive role in green design. By comparing the results between different supply chain structures, we find that the retailer-led supply chain outperforms the manufacturer-led supply chain in environmental performance improvements. The best environmental performance is achieved when the supply chain is coordinated.

Retailer-led supply chain contract coordination with supplier group evaluation

With the expansion of the enterprise scale, the original single supplier model has gradually evolved into a supplier group model. The evaluation of the retailer by the supplier group will have a certain impact on the retailer's decision. At the same time, as the status of retailers increases, retailers gradually grasp the dominance of the supply chain and use their channel advantages to charge channel cost to suppliers. Therefore, it is necessary to study the coordination problem of the supply chain when there is a supplier group's evaluation of the retailer and the retailer is dominant. This paper establishes the supply chain coordination decision model under the stackelberg game model and finds that the wholesale price contract and the traditional revenue sharing contract cannot achieve the overall optimal supply chain.

Retailer-led supply chain contract coordination with supplier group evaluation

With the expansion of the enterprise scale, the original single supplier model has gradually evolved into a supplier group model. The evaluation of the retailer by the supplier group will have a certain impact on the retailer's decision. At the same time, as the status of retailers increases, retailers gradually grasp the dominance of the supply chain and use their channel advantages to charge channel cost to suppliers. Therefore, it is necessary to study the coordination problem of the supply chain when there is a supplier group's evaluation of the retailer and the retailer is dominant. This paper establishes the supply chain coordination decision model under the stackelberg game model and finds that the wholesale price contract and the traditional revenue sharing contract cannot achieve the overall optimal supply chain.

The impact of cap-and-trade mechanism and consumers’ environmental preferences on a retailer-led supply Chain

Governments and consumers are paying more attention to environmental protection. China, Korea, and several European countries have implemented market-based cap-and-trade systems to reduce carbon emissions. At the same time, consumers are willing to pay more for low-carbon products. The decisions of manufacturers and retailers may be impacted by these factors. This paper considers a scenario with a model economy under the effects of a cap-and-trade policy, with consumers who prefer low-carbon products, and develops an evolutionary game (EG) model to examine the evolution of behaviors for powerful retailers (such as Amazon, Gome, Walmart, etc.) and manufacturers in a retailer-led supply chain. In such a supply chain, the retailers can choose whether or not to promote low-carbon products and manufacturers can choose whether or not to reduce carbon emissions. A Stackelberg game structure is used to identify the optimal decisions for manufacturers and retailers. A model is developed to investigate the stability of the equilibrium solutions of the evolutionary game. System dynamics is used to simulate and analyze dynamic and transient behaviors, and is used to simulate the evolutionary game in a Chinese appliance industry. The simulation results show that the emissions cap, the market price of carbon credits, and the consumers’ preferences for low-carbon products are key factors influencing the retailers’ and manufacturers’ behavior. To increase long-term profits for both retailers and manufacturers, the retailers and the manufacturers should make sustainable decisions in tandem.

Retail service investing: An anti-encroachment strategy in a retailer-led supply chain

Noting the rise of dominant retailers, we explore the retailer’s strategies to deter the manufacturer from encroaching in a retailer-led setting where the manufacturer keeps his own direct selling cost private. Our results show that the dominant retailer is always worse off while the manufacturer is always better off by manufacturer encroachment in a retailer-led supply chain when the fixed encroaching cost is negligible. This gives rise to a question that whether there exist effective anti-encroachment strategies for the retailer. We investigate a noted and prevailing strategy of retailers, retail service investing, to examine if it can help the retailer to prevent encroachment. Results show that the retail service level is reduced by encroachment. Retail service investing may actually be an effective anti-encroachment measure for the dominant retailer, especially when retail service investing is highly efficient and the retailer holds a great downward estimation deviation on the direct selling cost of the manufacturer. Retail service investing may lead to Pareto improvement for both the supply chain members and consumers. Additionally, the manufacturer may have incentives to share cost information with the retailer, depending on the retailer’s estimation deviation on the direct selling cost. Finally, we find that a prisoner’s dilemma may occur for a moderate fixed cost of encroachment.