Supply Chain Power Structures Research Articles

Information sharing format preferences under different supply chain power structures

Purpose This paper aims to study the preferences of the supply chain (SC) members on various power structures under demand information asymmetry considering competing retailers. Design/methodology/approach A two-level SC with one manufacturer and two retailers is designed. The retailers are in Bertrand competition. The manufacturer who holds the confidential demand information chooses the appropriate information sharing (IS) format. Three IS formats are provided, i.e. no IS (the manufacturer never shares with the retailers), partial IS (the manufacturer shares with one retailer), full IS (the manufacturer shares with all retailers). In addition, the authors model two power structures based on the decision sequences in the SC, i.e. retailers or manufacturer-dominant SC. The authors characterize the equilibrium solutions and payoffs and then investigate the members’ preferences for IS formats. Findings It is shown that in retailers (manufacturer)-dominant SC, the retailers prefer full (no) IS, but the manufacturer prefers no (full) IS. Moreover, the authors analyze the members’ preferences on power structures under demand information asymmetry, which has a relationship with the degrees of demand uncertainty and competition intensity. Originality/value The analysis regarding the preferences of the SC members on power structure under demand information asymmetry provides valuable managerial insights to enhance cooperation and achieve a win-win result.

Non-cooperative and Nash-bargaining game of a two-parallel maritime supply chain considering government subsidy and forwarder's CSR strategy: A dynamic perspective

In recent years, sustainable and environmental issues have increasingly raised concerns of the government and enterprises. Motivated by the environmental regulations of IMO and shippers' green preferences, new energy vessels (NEV) have been developed, and there are still many traditional fuel vessels (TFV) providing maritime transport services. Considering the reality of the shipping market, a two-parallel maritime supply chain (MSC) involving a NEV carrier, a TFV carrier, and a freight forwarder with corporate social responsibility (CSR) has been constituted. The government may encourage the NEV carrier to make green innovation (GI) by providing subsidies. Most existing research on supply chain decisions considered different supply chain power structures or coordination issues and assumed that enterprises are entirely rational. However, in practice, bargaining games between stakeholders are common. Consequently, non-cooperative game (NCG), two types of Nash-bargaining game, i.e. horizontal Nash-bargaining game (HNBG) and vertical Nash-bargaining game (VNBG) are formulated in this paper. Based on bounded rationality, we investigate the dynamic price and GI adjustment strategies of MSC participants under government subsidy (GS) and freight forwarder's CSR (FCSR) with three game patterns. Furthermore, the impacts of adjustment parameters, GS, and FCSR on equilibrium strategies and expected profits are also explored. Setting NCG as the benchmark case, we uncovered that both HNBG and VNBG help improve the NEV carrier's equilibrium green innovation level (GIL), and HNBG (VNBG) raises (lowers) equilibrium prices of two carriers (freight prices and selling prices). In addition, HNBG (VNBG) can stabilize the adjustment of GI (freight prices and selling prices). For all MSC participants, excessive adjustment strategies harm robust revenues. We also found that GS and FCSR have different impacts on the dynamic decision-makings. When adjustment parameters are in their stable regions, GS always benefits the NEV carrier and the freight forwarder. But the impact of GS on the TFV's revenues may be related to the intensity of FCSR. Moreover, the effect of FCSR on stakeholders' expected profits depends on the choice of game pattern. Finally, we revealed that the TFV carrier's CSR-sharing behavior helps improve the stability of the MSC dynamic decisions and promotes the mutual benefit of MSC participants.

Pricing and investment decisions when facing heterogeneous customers under different supply chain power structures

This paper examines the pricing and joint investment decisions of a two-echelon supply chain with a manufacturer and a retailer under power structures. A manufacturer invests in a specific quality level to produce a quality product. Meanwhile, a retailer invests in the extended warranty service provision as an after-sales service. This study investigates the interplay of these two investments assuming two heterogeneous customer demands exist. Three decision-making analytical power structure models are developed, namely centralized, manufacturer-led decentralized, and retailer-led decentralized models. In both decentralized models, the Stackelberg game determines the optimal price and investment decisions to maximize member's profit. However, independently optimal decision-making with these models does not coordinate the supply chain and its members. Thus, this study proposes wholesale price contracts considering power structures to coordinate effectively and achieve a win–win situation. A numerical analysis has been performed to determine the optimal level for quality investment, extended warranty length, pricing, and supply chain performance. Furthermore, a sensitivity analysis explores key parameter's impact on heterogeneous customer demands and supply chain performance.

Allocation of the Carbon Emission Abatement Target in Low Carbon Supply Chain Considering Power Structure

The proposal of China’s dual carbon strategy is not only a kind of pressure but also an opportunity for enterprises. Both upstream and downstream enterprises in the supply chain pay more attention to carbon emission reduction, and consumers are gradually turning to a low-carbon preference. How carbon reduction targets are allocated among supply chain members with different technical efficiency and market opportunities will directly affect supply chain performance and social welfare. Power structure is an important factor that dominates the decision-making of the supply chain, so we establish the low-carbon supply chain model under three different power structures: manufacturer-led, retailer-led, and power pairs between two parties. We study the government distribution decisions of carbon emissions reduction targets under different supply chain power structures and discuss the influence of supply chain power structures on carbon emissions reduction distribution decisions and social welfare. The study found that if the carbon emissions reduction target increases, the government will adjust the allocation strategy to increase the proportion of enterprises whose emissions cuts have less impact on market demand. The study also found that the government will allocate more emissions reduction to enterprises with higher emissions reduction efficiency, and enterprises whose emissions reductions have a greater impact on market demand. When supply chain enterprises have equal power, the supply chain will have greater social welfare and market demand, but not necessarily greater supply chain profits.

Remanufacturing and Product Recovery Strategies Considering Chain-to-Chain Competition and Power Structures

In addition to its economic potential and environmental significance, remanufacturing shows strategic importance in competition. Product recovery, a fundamental part of the remanufacturing system, should be aligned with the competition between supply chains. Moreover, the power structure of the supply chain influences interactive decisions. In this study, we investigate how supply chain competition and power structure influence product recovery strategies. We model the problem in two competing supply chains, where the manufacturers sell products through the respective retailers. Either manufacturer can choose between two product recovery strategies: collecting the used products for remanufacturing directly (that is, direct recovery) or assigning the task of product recovery to the retailer (indirect recovery). In addition, we conduct full-blown exploration of the impact of power structures, including Stackelberg-Manufacturer as the leader, Stackelberg-Retailer as the leader, and vertical Nash. The results reveal the joint inter- and intra-channel implications of the product recovery strategies.

Agricultural insurance and power structure in a capital-constrained supply chain

This study focuses on an agricultural supply chain with a capital-constrained manufacturer, a bank and an insurer under three power structures: insurer-led Stackelberg (IS), bank-led Stackelberg (BS) and vertical Nash (VN). By establishing a two-level Stackelberg game, we examine the application condition and role of agricultural insurance under three channel structures and reveal the preferences of the supply chain and its participants for different channel structures. This study shows that, in either model, the manufacturer purchases agricultural insurance when the bank is highly loss-averse, but the probability of the manufacturer adopting agricultural insurance in the BS model is lower than that of the VN model but higher than that of the IS model. In these three models, the manufacturer’s application of agricultural insurance increases the profits of the manufacturer, bank and insurer but reduces supply chain efficiency. In addition, from the perspective of the profit level and profit share of supply chain participants, for the manufacturer, the VN model of the two-level supply chain power structure betters than the BS and IS models of the three-level supply chain power structure, but the BS model is superior to the IS model; for the bank and the insurer, the higher their leadership positions in which power structure model, the better the power structure model. From the perspective of the overall profit and efficiency of the agricultural supply chain, the model preference of the supply chain is the same as that of the manufacturer. The findings provide new theoretical insights for the application of agricultural insurance and power relationship in the agricultural supply chain.

Optimizing the competitive sustainable process and pricing decision of digital supply chain: A power-balance perspective

In recent years, sustainability and digitalization issues have emerged in supply chain management (SCM), attracting attention from academics and businesses. Furthermore, digital servitization changes value creation processes and subsequently influences supply chain relationships and power structures. Further, the success of digital supply chains (DSC) is closely related to the corporate social responsibility (CSR) practiced by the competing channels due to the resulting competitive environment. This study explores the optimality of competitive sustainability service, digitalization service, and pricing decisions under Manufacturer Stackelberg (MS) game setting, Retailer Stackelberg (RS) game setting, Vertical Nash (VN), and integrated system (IS) model; therefore, it contributes to the literature on DSC systems which often focuses on optimizing price-only. In addition, it examines the environmental and economic benefits of taking advantage of green innovation products and digitalization processes. Results of implementing the model showed that when manufacturers combine digitalization, sustainability, and CSR activities, supply chain profits increase in all four power balance structures. However, the Model IS is sophisticated enough to synchronize the economic, environmental, and social gains of the system, leading to significant improvements in the performance indices. Furthermore, it is observed that the total DSC profit under the VN model is the highest. Whereas, manufacturers generate higher profits with Model MS, and retailers generate higher profits with Models RS and VN. Finally, we provide managers with guidance regarding the establishment of green innovation offerings by understanding the industrial organization's progress toward digitalization.

Pricing strategy of innovative product in supply chain considering anticipated regret

Product innovation is a significant marketing strategy for enterprises to attract customers. However, innovative products may not meet consumers’ expectations, where consumers would regret and return after purchasing the products. Firstly, a Stackelberg game is constructed in this paper model under different supply chain power structures. And then, the impact of consumers’ anticipated regret and innovation attributes are discussed on the equilibrium results and supply chain profit through theoretical comparison and numerical simulation. The results show that: (1) Sales enterprise can adopt the strategy of pricing penetration to promote the demand and avoid selling risk. (2) Enterprise can provide customers with high value-added services to increase profit. (3) Manufacturing enterprise can adopt the additive value strategy to promote consumption and gain extra profit. The conclusion can provide reference opinions for enterprises’ innovation and pricing decision-making. However, the different regret coefficients for innovative products and current products are not considered in this paper. Further the situation is considered in which consumers purchase current product, discount product and innovative product.

Impacts of Power Structure on Introduction of Green Store Brand

Over the past decades, the store brand has undergone a key change and achieved a remarkable improvement. Based on the industry observations, there is a wide belief that the retailers are more and more inclining to add values that cater to the consumers into their store brands. The green store brand, one kind of the burgeoning store brands, has been introduced by many retailers recently. In this paper, we investigate the conditions for retailer to introduce a green store brand and the impacts of supply chain power structure on the retailer’s product strategy. We built and solved six game models with respect to three supply chain power structures with and without the green store brand. The results show that: (i) the threshold to introduce the green store brand is lowest in RS power structure while highest in VN power structure, and the thresholds to only sell the green store brand under different power structures are the same; (ii) the green store brand may be introduced as a profitable product that has the real sale or just a threatening tool to compel the manufacturer to make a concession in wholesale price; (iii) once the green store brand is introduced, it is always detrimental to the manufacturer regardless of power structure; (iv) the green store brand can alleviate the double marginalization effect with respect to the national brand in most cases but aggravate it if the power structure is RS, and the ratio of potential margin is relatively low.

Shipping companies’ choice of low sulfur fuel oil with government subsidy and different maritime supply chain power structures

ABSTRACT Due to the restriction of sulfur content in fuel oil in the Emission Control Areas (ECAs), ships passing through ECAs have to adopt low-sulfur fuel oil (LSFO), and government will provide appropriate subsidies to shipping companies using LSFO. However, due to the different bargaining power between ports and shipping companies, it is necessary to study how the governmental subsidies affect the carriers’ choices of using LSFO under different power structures. In this paper, a game model considering one terminal and two carriers is developed to study the equilibrium solutions of two carriers under different power structures (terminal-dominated game, carriers-dominated game, Nash game), and then we analyze the impacts of government subsidies on maritime supply chain. The results show that whether for terminal or carriers, being leader in the game can always bring them higher profits. With the increase of the government subsidy, the demand of the carrier using LSFO will increase while the demand of the carrier who doesn’t use LSFO will decrease. High government subsidy not only reduces the profits of carriers not using LSFO but also puts the carriers more likely into the prisoner’s dilemma. The total demands and social welfare are maximized under Nash game.

Green Product Design and Pricing Decisions in a Risk-Averse Supply Chain under Alternative Power Structures

Motivated by the prevailing green product design and the different supply chain power structures, this paper aims to analyse the role of power relationship and risk-aversion in economic and environmental performance of sustainable supply chain. Three game theory models, including the manufacturer Stackelberg (MS) model, retailer Stackelberg (RS) model, and vertical Nash (VN) model, are developed to study the pricing and greenness level decisions in a two-echelon sustainable supply chain, where one risk-averse manufacturer sells green products through one risk-averse retailer. This paper shows that when selling through a more risk-averse retailer, the risk-averse manufacturer prefers to provide a product with a higher level of greenness and achieve a greater utility regardless of the power structure. A manufacturer as a follower may have stronger motivation to increase the product’s level of greenness than one in a more balanced supply chain when the green technology investment coefficient is sufficiently low. With regard to the power structure, the channel leadership is not necessary to for the manufacturer to achieve higher utility, which depends on the green technology investment coefficient, greenness level sensitivity, and players’ risk aversion.

Effects of take-back legislation on pricing and coordination in a closed-loop supply chain

<p style='text-indent:20px;'>This study investigates the effects of take-back legislation and channel structures on pricing, collection, and coordination in a closed-loop supply chain (CLSC). By establishing the centralized, manufacturer-led, and retailer-led CLSC models, we analyze the equilibrium solutions of channel players and the government. We obtain the following results. (1) The manufacturer can accept a higher collection target and exit the market later in the centralized model than in decentralized decision-making models. Moreover, the manufacturer exists the market earlier in the retailer-led model with regulation compared with the manufacturer-led model. (2) The government's optimal collection target is the same under manufacturer-led and retailer-led models when the regulation comes into force. (3) Revenue-sharing and two-part tariff contracts can effectively coordinate manufacturer-led and retailer-led CLSCs under take-back legislation. Finally, we conduct several numerical examples and obtain relevant managerial insights. Our results indicate that the correlation between take-back legislation and channel structure has a significant impact on the pricing and coordination decisions of the CLSC; furthermore, the government should flexibly set the collection target when facing different supply chain and channel power structures in a CLSC.</p>

Evaluating the effects of quality regulations on the pharmaceutical supply chain

This paper considers a two-echelon pharmaceutical supply chain comprising two pharmaceutical manufacturers and a pharmacy. We derive optimal decisions for three different supply chain power structures considering two scenarios: one scenario featuring quality regulation, and one without. By comparing the equilibriums of the two regulatory scenarios under different power structures, we then evaluate the effects of quality regulation and power structure on pharmaceutical firms' decisions, profits and social welfare. Our results show that the product differentiation between two pharmaceutical manufacturers will be reduced through quality regulation, serving to intensify price competition between them. This has a negative impact on the two pharmaceutical manufacturers but a positive effect on the pharmacy's profit. However, an appropriate level of minimum quality standards can enhance social welfare and the economic performance of the whole pharmaceutical supply chain, resulting in a win-win outcome. In addition, our results demonstrate that the balanced power structure has a positive effect on the pharmaceutical supply chain's economic performance and social welfare.

Optimal carbon tax design for achieving low carbon supply chains

This research addresses the timely challenge of climate changes by investigating how a carbon emissions taxation scheme can be designed to reduce carbon emissions without hindering long-term economic development. Considering different power structures and green technology investment efficiencies, this research examines the optimal carbon tax design with respect to several key supply chain features. Our findings show that no matter whether customers are sensitive to the carbon emissions or not, the carbon tax should be differentiated across industry sectors, and the supply chain power structure and cost efficiencies in carbon emissions reduction should be taken into account. It is also crucial to have the proper channel leadership to achieve the sustainability objectives.

Original design manufacturer's warranty strategy when considering retailers' brand power under different power structures

AbstractIn recent years, the original design manufacturer (ODM) has increasing interests in multichannel cooperation with different retailers. This paper considers the problem in which the ODM cooperates with two competing retailers. The manufacturer produces two substitute products and markets them through two competing retailers. For both products, the manufacturer bundles them with basic warranties and the retailers brand them with their own branding. We quantitatively model the product demands and derive the optimal decisions under two common supply chain power structures: manufacturer Stackelberg and retailer Stackelberg. We observe that when the competition between the two retailers becomes fiercer, the manufacturer charges more for both products, the product substitutability and supply chain power structures do not affect the products' price and warranty decisions, and there does exist a brand ratio interval in which the product branded by the high‐reputation retailer will not get a better warranty from the manufacturer, violating the signalization of the warranty. The leader gets the power to get higher profit while the total profit of the whole supply chain remains the same under both power structures.

Inventory Management Under Power Structures With Consignment Contract Subject to Inventory Inaccuracy

This paper focuses on who should control the inventory and who should lead the supply chain under consignment contract. The supply chain consists of one supplier and one retailer, and inventory inaccuracy occurs on the retailer's side. Vendor-managed inventory (VMI) and retailer-managed inventory (RMI) models are analyzed in two different supply chain power structures: where the supplier is the Stackelberg leader (referred as SVMI and SRMI) and where the retailer is the Stackelberg leader (referred as RVMI and RRMI). The inventory availability and the channel cost sharing rate are examined to investigate the impact of these two factors on supply chain performance under four cases. It is important to find that whatever the values of the inventory availability and the channel cost sharing rate may be, the retailer always prefers SVMI. However, there is a threshold value of inventory availability (channel cost sharing rate) such that the supplier prefers SVMI only if the inventory availability (channel cost sharing rate) is larger (less) than the threshold value; and it prefers RRMI only if the inventory availability (channel cost sharing rate) is less (larger) than the threshold value. Therefore, both leading retailer and leading supplier have the incentive to act as the follower.

Cooperative advertising models under different channel power structure

Cooperative (co-op) advertising is an arrangement between manufacturer and retailer, where two members initiate their respective advertising to help develop brand, motivate sales, and other purposes. This paper focuses on cooperative advertising in a supply chain consisting of one manufacturer and one retailer. As two basic elements of a supply chain, the channel power structure and information structure affect the firm’s pricing and advertising decisions. We attempt to investigate how they optimally decide their marginal returns and advertising investments. Utilizing the Stackelberg game theory, we derive the equilibrium of five scenarios in two different cases, i.e., (1) either the manufacturer or the retailer is acting as the Stackelberg leader and (2) whether the Stackelberg leader knows the advertising investment of his follower. Then we make a comparison and obtain some managerial implications as follows: (1) the supply chain power structure and the relative advertising effectiveness coefficient exert great influence on the optimal supply chain decisions, (2) the supply chain members’ profit is not parallel to their corresponding power structure, if the retailer’s advertising effectiveness is greater than the manufacturer’s, the Manufacturer-dominated Stackelberg game is a win–win strategy, and vice versa, (3) the dominant member can improve his and the overall performance of the supply chain by having the advertising information of the other.

Governmental cap regulation and manufacturer’s low carbon strategy in a supply chain with different power structures

Considering the cap-and-trade regulation and manufacturer’s two types of strategies: adopting green technology (GT) and purchasing carbon credits (PC), we develop game models to investigate the manufacturer’s production and emission abatement decisions as well as the governmental emission cap regulation in a supply chain with three power structures (Manufacturer Stackelberg (MS), Retail Stackelberg (RS) and Vertical Nash (VN)), and analyze how a manufacturer’s low carbon strategy changes with the various governmental cap under the three supply chain power structures. The main conclusions are as follows. If the manufacturer adopts green technology strategy, supply chain power structure will not affect social welfare. High consumer’s low-carbon preference is more beneficial to the social welfare, the government should advocate the consumer’s preference for low carbon product. If the manufacturer purchases carbon credits, the government under the power structure of VN will gain the most social welfare.

Firms’ green R&D cooperation behaviour in a supply chain: Technological spillover, power and coordination

In response to the global fight against climate change, a growing number of firms cooperate with their supply chain partners on green innovations. This study explores firms' green R&D cooperation behaviour in a two-echelon supply chain in which a manufacturer and a retailer first cooperate to invest green R&D and then organise production according to a wholesale price contract. Through a comparison with non-cooperation models, we evaluate the effects of green R&D cooperation on the economic, environmental and social performances of the supply chain while simultaneously considering the technological spillover and supply chain power relationship. Our findings show that the R&D cooperation's improvement of firms' economic performance is mainly determined by firms' own green contribution level. This level is dependent on firms' green R&D investment efficiency and spillover as well as on their relevant power relationship with their supply chain partners. Interestingly, there is a Pareto improvement region in which the green R&D cooperation has a positive impact on firms, customers and the environment. In the case of a non-Pareto improvement region, supply chain coordination can be achieved through a two-part tariff contract. This applies to all three of the supply chain power structures investigated in this research.

Impacts of Power Structure on Supply Chain with a Store Brand

In a framework where both power structure and consumer heterogeneity (brand loyalty and different willingness-to-pay for perceived quality) count, we study six noncooperative games (two Stackerberg and one Nash games with and without a store brand) between a national-brand manufacturer and a store-brand retailer. Our results contribute to the theoretical literature on store brand in four aspects: (a) revealing that the mechanism whereby store brands alleviate double-marginalization problem varies with supply-chain power structures; (b) finding that it is the power manufacturer with a low-loyalty national brand that suffers most from the store brand entry; (c) finding that a category follower retailer is more inclined to introduce its store brand than a power one, and should optimally position its store brand close to the low-loyalty national brand supplied by a power manufacturer; (d) showing that the store brand may lead the manufacturer and the retailer to be trapped in the prisoners’ dilemma.