Two-part Tariff Contract Research Articles

Coordinate pharmaceutical supply chain with medical institutions’ public welfare under the centralized drug bulk-buying program

Coordinate pharmaceutical supply chain with medical institutions’ public welfare under the centralized drug bulk-buying program

Research on the Game Model of Green Technology Investment in a Two-Echelon Manufacturing Supply Chain Under Carbon Tax Regulation

Using a Stackelberg game model, this research examines the impact of government-imposed carbon taxes on the sustainability of a two-echelon supply chain. The analysis focuses on the interactions between upstream suppliers and downstream manufacturers, taking into account how manufacturers’ carbon emissions influence market demand, as well as how sustainability levels and price affect this demand. The results show that a centralized system has a lesser potential for total profit development in the supply chain than a decentralized system. To encourage investment in green technologies throughout the supply chain, this paper proposes two coordination mechanisms: a green subsidy and a two-part tariff contract. Numerical study reveals that a win–win scenario for the supply chain requires suppliers to share part of the costs. Furthermore, under a two-part tariff contract, successfully managing fixed costs can result in total profit levels comparable to those in a centralized system. The research also makes strategy recommendations, such as differentiating carbon levies, improving supply chain coordination, and assessing fixed costs. These aim to provide theoretical and practical implications for supply chain management in order to assist businesses and policymakers in effectively responding to the problems of climate change.

Optimal decisions and coordination of a supply chain in the hybrid recycling mode with traceability and fairness concern

Considering the case of recycling competition between a manufacturer and a retailer, we construct game models under centralised and decentralised decision-making with or without fairness concern, respectively. By comparatively analysing the optimal decisions and profits under the three models, we design an improved two-part tariff contract to realise supply chain coordination. We have the following findings: First, in the supply chain with traceability, consumers’ preference for traceability and the impact of traceability on recycling are not only beneficial to the environment but also to each enterprise. Second, the retailer’s concern for fairness can harm the profits of the manufacturer and system. Moreover, the retailer’s disproportionate focus on fairness of the distribution of revenues hinders the introduction and development of the traceability system, leading to lower recycling volume and demand. Third, the traceability system is most efficient under centralised decision-making, attaining the highest traceability level, recycling volume, and system profit. The retail price and manufacturer’s recycling price are lower than those under decentralised decision-making. Our findings also suggest that improved two-part tariff contract can enhance the chain members’ performance. While fairness concern and fierce recycling competition hinder implementation of the coordination mechanism, and improved traceability facilitates the attainment of coordination.

Cooperation of firms’ environmental innovation in a supply chain under government regulation

Cooperation of firms’ environmental innovation in a supply chain under government regulation

Developing sustainable and efficient customer-centric strategies for a three-stage dual-channel green supply chain: a game-theoretic approach with two-part tariff contract

Developing sustainable and efficient customer-centric strategies for a three-stage dual-channel green supply chain: a game-theoretic approach with two-part tariff contract

Licensing of a product innovation by an outside innovator to a Stackelberg duopoly

ABSTRACT We examine the optimal strategy of an outside innovator owning a quality-improved product when licensing it to a Stackelberg duopoly. We show that only a single licence is granted, regardless of whether there is quantity or price competition in the marketplace. However, both the licensee and contractual terms in each context differ. Under quantity competition, the licence is granted to the market-leading firm by means of a non-distorting contract, whereas under price competition the licence is granted to the market-following firm by means of a distorting two-part tariff contract with per-unit royalty. From a welfare perspective, exclusive licensing is beneficial in both contexts compared to the pre-licensing scenario, although under price competition, consumers can be harmed if the innovation is small. Finally, licensing leads price competition to yield a less efficient outcome than quantity competition due to greater market collusion. Licensing by means of three-part tariff contracts is also discussed, as well as licensing when potential licensees operate as a mixed duopoly.

The impacts of retailer's carbon tax on the price and carbon reduction decisions in supply chain

The impacts of retailer's carbon tax on the price and carbon reduction decisions in supply chain

Dual channel sales in supply chain: live streaming or traditional e-commerce

In recent years, live streaming is becoming a popular channel to sell products all over the world. Compared to traditional e-commerce channel, live streaming channel may not only bring consumers more shopping convenience, but also pose consumers more privacy concern. This paper considers a supply chain consisting of a manufacturer and an e-tailer who sells through dual channels (i.e., live streaming and traditional e-commerce) to explore how shopping convenience and privacy concern affect the optimal decisions. We build game models of two pricing (exogenous and endogenous) and two incentive contracts (wholesale price and two-part tariff). We find that the optimal promotion efforts are decreasing in shopping convenience while increasing in privacy concerns under the wholesale price contract, and independent of them under the two-part tariff contract when pricing is not a decision (such as iPhone); the optimal promotion efforts are increasing in shopping convenience while decreasing in privacy concern when pricing is a decision (such as the seasonal products). Whether the retail pricing is a decision or not, supply chain coordination can be achieved by the two-part tariff contract, but not through the wholesale price contract. Further, the two-part tariff contract is more favorable to the manufacturer if the exogenously given retail price is low, and the wholesale price contract is more favorable to the manufacturer if the retail price is high; the two-part tariff contract is always more beneficial for the supply chain than the wholesale price contract. Finally, we extend our analysis to relax a more realistic form with a variable effort elasticity and verify the robustness of the theoretical results.

Green initiative in a two-echelon Supply chain with co-ordination and contract

In recent times, environmental responsibility is an important factor that determines the success of a Supply Chain. In this study, we have considered green production in the light of various co-ordinations and contracts. This is a two-echelon Supply chain consisting of one manufacturer who designs and develops a green product and the retailer sells it to the environmentally aware customers and the awareness is converted to actual purchasing behaviour by the retailers marketing strategy and the manufacturer’s product design and development which includes technology usage to develop the greenness,packaging and several other factors which were not studied earlier. All these factors are involved in our demand function which is distinct from the existing literature. The model is developed under three contracts, Price-only, green marketing cost sharing and two-part tariff contracts. This is an well-established fact that co-ordination enhances the economic benefits to every tier member of a chain. Our findings also establish that co-ordination and co-operation among members will enhance their environmental sustainability. In this way they can carry out their social responsibilities towards our environment. It is also noticed that as the environmental consciousness of the consumers increases, the cost sharing contract is more profitable for manufacturer than that for retailer whereas the price only contract is profitable for the retailer.

Managing Industry 4.0 supply chains with innovative and traditional products: Contract cessation points and value of information

Managing Industry 4.0 supply chains with innovative and traditional products: Contract cessation points and value of information

Firms’ shareholding behavior in green supply chains: Carbon emissions reduction, power structures, and technology spillovers

Leaders in green supply chains are increasingly focusing on improving strategic synergy with followers through shareholding strategies. By constructing Stackelberg models, we explore the operational mechanisms in two models, manufacturer-led and retailer-led, which have forward and backward shareholding strategies, respectively. Compared with non-shareholding models, we find that the retailer's pricing becomes more sensitive to changes in the market environment after applying shareholding strategies, while the manufacturer's pricing depends on its power status. Interestingly, leaders and entire supply chains prefer shareholding strategies, while followers prefer shareholding strategies in good market environment or in bad market environment with their shares held by leaders below certain thresholds. Moreover, both forward and backward shareholding strategies can effectively promote carbon emissions reduction. Improving manufacturers' technology spillover positively impacts pricing and carbon emissions reduction and profits, and a reasonable shareholding ratio can encourage manufacturers to increase the level of technology spillover. Finally, a two-part tariff contract can effectively coordinate the vertical shareholding supply chain. The results provide decision guidance for managers in applying shareholding strategies to build a strategic alliance to improve firms' economic and environmental performance.

Blockchain adoption and contract coordination of poverty alleviation supply chain considering altruistic preference

Blockchain adoption and contract coordination of poverty alleviation supply chain considering altruistic preference

Effects of information superiority and green optimism on green supply chains under different power structures

Effects of information superiority and green optimism on green supply chains under different power structures

Emission-reduction contract with cost information asymmetry for emission reduction service providers: Loose or tight

Emission-reduction contract with cost information asymmetry for emission reduction service providers: Loose or tight

Recycling channel design and coordination in a reverse supply chain with customer green preference

Recycling channel design and coordination in a reverse supply chain with customer green preference

Exclusive and non-exclusive licensing with shelving

Exclusive and non-exclusive licensing with shelving

Innovation Diffusion and Strategic Outside Option in a Bargaining Game

AbstractWe develop an optimal licensing model of a product innovation in which the (external) patent holder negotiates sequentially a two-part tariff contract with two potential licensees that have a positive and strategic outside option. We study the role of this strategic outside option in determining technology diffusion and efficiency of the bargaining. Although rich enough contracts allow the solution of the well known opportunism problem, the strategic outside option of the second negotiator implies deviation from industry profit maximization, which reduces the profitability of nonexclusive licensing. As a result, exclusive licensing still prevails under certain conditions. We extend our analysis to assess the profitability for the innovator to integrate vertically with either firm in the market. The internal patent holder always sells the innovation to the rival non-affiliate as a way to co-opt the latter and improve the profits of the former. As a result, vertical integration as compared with vertical separation may imply a positive quality improving effect. The private and social profitability of vertical integration depends on the type of bargaining between the negotiators and on the distribution of their bargaining power.

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

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

Pricing and contract preference in maritime supply chains with downstream competition impact of risk-aversion and contract unobservability

Pricing and contract preference in maritime supply chains with downstream competition impact of risk-aversion and contract unobservability

Price and Quantity Competition under Vertical Pricing

We consider a vertically related market where one quantity-setting and another price-setting downstream firm negotiate the terms of a two-part tariff contract with an upstream input supplier. In contrast to the traditional belief, we show that the price-setting firm produces a higher output and earns a higher profit than the quantity-setting firm when bargaining is decentralised. Additionally, both firms produce the same output, whereas the profit is higher under the price-setting firm than the quantity-setting firm when bargaining is centralised.