Competitive pricing and ordering decisions in a multiple-channel supply chain

Chung-Chi Hsieh, Yih Long Chang, Cheng-Han Wu

Research output: Contribution to journalArticle

47 Citations (Scopus)

Abstract

In this paper, we consider multiple manufacturers and a common retailer in a supply chain facing uncertain demand. Each manufacturer produces a different yet substitutable product sold through the common retailer, and a portion of the manufacturers sell their products through the direct channels in addition to the retail channel. We characterize the members equilibrium decisions of prices and quantities under the decentralized uncoordinated and centralized integrated settings, and derive the closed-form solutions to explore the impact of channel structure and parameters on the members decisions and performance. We further study a coordination mechanism for the members pricing and ordering decisions when they operate under a decentralized setting. We show that when certain profit allocation conditions are met, the decentralized system will achieve the centralized integrated overall optimal profit and each chain member will get a better profit than with the decentralized uncoordinated system. Using numerical analyses, we derive many managerial insights with respect to supply chain system parameters and structure.

Original languageEnglish
Pages (from-to)156-165
Number of pages10
JournalInternational Journal of Production Economics
Volume154
DOIs
Publication statusPublished - 2014 Jan 1

Fingerprint

Supply chains
Profitability
Costs
Pricing
Profit
Multiple channels
Supply chain
Integrated
Retailers
Retail
Channel structure
Supply chain system
Uncertain demand
Coordination mechanism
Closed-form solution

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

Cite this

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Competitive pricing and ordering decisions in a multiple-channel supply chain. / Hsieh, Chung-Chi; Chang, Yih Long; Wu, Cheng-Han.

In: International Journal of Production Economics, Vol. 154, 01.01.2014, p. 156-165.

Research output: Contribution to journalArticle

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