Dynamic cooperative advertising strategy in OAO supply chain with customer return

2020 ◽  
Vol 54 (5) ◽  
pp. 1537-1553
Author(s):  
Duanyang Cao ◽  
Xumei Zhang ◽  
Lingli Yang ◽  
Jian Xiao
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Stackelberg Game ◽  
Influence Factors ◽  
Third Party ◽  
Direct Channel ◽  
Decentralized System ◽  
Optimal Advertising ◽  
Retail Channel ◽  
Customer Returns

Nowadays many manufacturers are increasingly adopting their own online direct channel and the offline retail channel to sell their products as the quick development of e-commerce and third party logistics. To gain more and more market share, the manufacturer and the retailer implement unconditional return strategy, which does not affect secondary sales. We build a differential game model for the optimal advertising and the optimal advertising cost sharing proportion for centralized and decentralized OAO (Online and Offline) supply chain considering customer returns rates. We further analyze how the returns rates affect the optimal decisions of the manufacturer and the retailer. The results show that the returns rates, the brand reputation and the influence factors of retail channel goodwill on demand of online direct channel strongly influence the optimal advertising decisions. Furthermore, the retailer does not support for the manufacturer advertising efforts in Stackelberg game. Compared with the centralized OAO supply chain, the decentralized system results in channel inefficiency. To coordinate the channels, we design a two-way advertising cost-sharing contract. By this contract, each member of the supply chain reaches a win-win situation and is willing to cooperate. Numerical studies verify the conclusions of this paper.

scholarly journals Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain

2020 ◽  
Vol 12 (8) ◽  
pp. 3236
Author(s):  
Gan Wan ◽  
Gang Kou ◽  
Tie Li ◽  
Feng Xiao ◽  
Yang Chen
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Good Combination ◽  
Green Supply Chain ◽  
Game Model ◽  
Mathematical Function ◽  
Pricing Strategies ◽  
Direct Channel ◽  
Retail Channel ◽  
Offline Channels

Due to the popularization of the concept of “new retailing”, we study a new commercial model named O2O (online-to-offline), which is a good combination model of a direct channel and a traditional retail channel. We analyze an O2O supply chain in which manufacturers are responsible for making green products and selling them through both online and offline channels. The retailer is responsible for all online and offline channels’ orders, and the manufacturer gives the retailer a fixed fee. We construct a mathematical function model and analyze the greenness and pricing strategies of centralized and decentralized settings through the retailer Stackelberg game model. Due to the effects of the double marginalization of supply chain members, we adopt a simple contract to coordinate the green supply chain. The paper’s contributions are that we obtain pricing and greening strategies by taking the cooperation of offline channels and online channels into consideration under the O2O green supply chain environment.

OPTIMAL STACKELBERG STRATEGIES FOR CLOSED-LOOP SUPPLY CHAIN WITH THIRD-PARTY REVERSE LOGISTICS

2012 ◽  
Vol 29 (05) ◽  
pp. 1250026 ◽  
Author(s):  
NI-NA YAN ◽  
BAO-WEN SUN
Keyword(s):  
Supply Chain ◽  
Reverse Logistics ◽  
Closed Loop ◽  
Stackelberg Game ◽  
Wholesale Price ◽  
Third Party ◽  
Closed Loop Supply Chain ◽  
Decentralized System ◽  
Stackelberg Strategies ◽  
Scrap Recycling

Closed-loop supply chain (CLSC), especially the reverse logistics system with the third-party reverse logistics providers (3PRLP) is very important for materials return, remanufacturing, repair, recovery, recycling, and reusing. In this paper, based on a one-leader and multi-follower Stackelberg game with the manufacturer being the leader, we model a multi-echelon CLSC with 3PRLP under the consideration of impacts of environmental legislation on scrap recycling. Furthermore, in order to encourage the 3PRLP to exert him to return activities we design a target rebate-punish contract between the manufacturer and the 3PRLP under both stochastic price-dependent demands and stochastic effort-dependent returns. We analyze the closed-form analytic expressions for both united optimization strategies in centralized closed-loop system and the Stackelberg strategies in decentralized system, and conclude that the wholesale price contract may not coordinate the forward supply chain and the target rebate-punish may coordinate the reverse chain under certain conditions. Finally, according to the practice of Chinese steel enterprises we carry out some simulation experiments to validate our theoretical analyses and gain some insights into the impacts of reverse logistics activities on the practitioners operations and decisions.

scholarly journals Decisions and Coordination in E-Commerce Supply Chain under Logistics Outsourcing and Altruistic Preferences

Mathematics ◽  
2021 ◽  
Vol 9 (3) ◽  
pp. 253
Author(s):  
Yuyan Wang ◽  
Zhaoqing Yu ◽  
Liang Shen ◽  
Runjie Fan ◽  
Rongyun Tang
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Stackelberg Game ◽  
Consumer Preferences ◽  
Third Party ◽  
Altruistic Behavior ◽  
Fixed Cost ◽  
Equilibrium Solutions ◽  
Factors Affecting ◽  
Dual Channel

Considering the peculiarities of logistics in the electronic commerce (e-commerce) supply chain (ESC) and e-commerce platform’s altruistic preferences, a model including an e-commerce platform, third-party logistics service provider, and manufacturer is constructed. Based on this, three decision models are proposed and equilibrium solutions are obtained by the Stackelberg game. Then, an “altruistic preference joint fixed-cost” contract is proposed to maximize system efficiency. Finally, numerical analysis is used to validate the findings of the paper. The article not only analyzes and compares the optimal decisions under different ESC models, but also explores the intrinsic factors affecting the decisions. This paper finds that the conclusions of dual-channel supply chains or traditional supply chains do not necessarily apply to ESC, and that the effect of altruistic behavior under ESC is influenced by consumer preferences. Moreover, there is a multiparty win–win state for ESC, and this state can be achieved through the “altruistic preference joint fixed-cost” contract. Therefore, the findings of this paper contribute to the development of an e-commerce market and the cooperation of ESC members.

scholarly journals A Building-Material Supply Chain Sustainable Operations under Fairness Concerns and Reference Price Benefits

Complexity ◽  
2021 ◽  
Vol 2021 ◽  
pp. 1-14
Author(s):  
Huimin Xiao ◽  
Youlei Xu ◽  
Shiwei Li
Keyword(s):  
Supply Chain ◽  
Building Material ◽  
Cost Sharing ◽  
Reference Price ◽  
Dynamic Models ◽  
Stackelberg Game ◽  
Noncooperative Game ◽  
Sustainable Operations ◽  
Effort Level ◽  
Fairness Concerns

This paper incorporates fairness concerns and consumer reference price effects into a two-echelon building-material closed-loop supply chain consisting of a manufacturer and a retailer. By establishing four differential game models, we investigate the sustainable operations and cooperation of this supply chain. The four game models are a Nash noncooperative game, Stackelberg game with cost sharing, Stackelberg game with fairness concerns and cost sharing, and centralized decision model. By using dynamic models and optimal control theory, we obtain the two members’ optimal equilibrium strategies in the supply chain. Analytical results show that the consumer reference price effect has a positive impact on the manufacturer’s effort level, retailer’s publicity level, and product brand goodwill, which can improve the supply chain performance. The retailer’s partial commitment to cost sharing can enhance the production enthusiasm of the manufacturer, improve the brand reputation of the product, and enhance the two members’ individual profitability. The distributional fairness concerns of the manufacturer not only prevent the manufacturer and retailer from achieving Pareto improvement but also lead to the decline of the manufacturer’s effort level and profitability. The research conclusions of this paper can provide some insights into the cooperation and sustainable development of the supply chain.

Manufacturing and selling tactics for a green supply chain under a green cost sharing and a refund agreement

2020 ◽  
Vol 15 (4) ◽  
pp. 1419-1450 ◽  
Author(s):  
Ata Allah Taleizadeh ◽  
Mahsa Noori-Daryan ◽  
Shib Sankar Sana
Keyword(s):  
Sensitivity Analysis ◽  
Supply Chain ◽  
Cost Sharing ◽  
Green Supply Chain ◽  
Chain Model ◽  
Content Type ◽  
Decentralized System ◽  
Quality Item ◽  
Decision Variables ◽  
Refund Rate

Purpose This paper aims to deal with optimal pricing and production tactics for a bi-echelon green supply chain, including a producer and a vendor in presence of three various scenarios. Demand depends on a price, refund and quality where the producer controls quality and the vendor proposes a refund policy to purchasers to encourage them to order more. Design/methodology/approach In the first scenario, the members seek to optimize their optimum decision variables under a centralized decision-making method while in the second scenario, a decentralized system is assumed where the members make a decision about variables and profits under a non-cooperative game. In the third scenario, a cost-sharing agreement is concluded between the members to provide a high-quality item to the purchasers. Findings The performance of the proposed model is investigated by illustrating a numerical example. A sensitivity analysis of some key parameters has been done to study the effect of the changes on the optimal values of the decision variables and profits. From sensitivity analysis, the real features are observed and mentioned in this section. Originality/value This research examines the behavior of partners in a green supply chain facing with a group of purchasers whose demand is the function of a price, greenery degree and refund rate. This proposed mathematical model is developed and analyzed which has an implication in supply chain model.

Optimal decisions and coordination strategy of a capital-constrained supply chain under customer return and supplier subsidy

2018 ◽  
Vol 13 (2) ◽  
pp. 278-301 ◽  
Author(s):  
Gongbing Bi ◽  
Ping Chen ◽  
Yalei Fei
Keyword(s):  
Supply Chain ◽  
Trade Credit ◽  
Stackelberg Game ◽  
Modeling Framework ◽  
Content Type ◽  
Initial Capital ◽  
Joint Operations ◽  
Fixed Proportion ◽  
Customer Returns ◽  
Credit Financing

Purpose The purpose of the paper is to explore impacts of financing and supplier subsidy on capital-constrained retailer and the value of returns subsidy contract under a situation where the retailer makes joint operations and finance decisions. Design/methodology/approach This paper considers a two-level supply chain, including a retailer and a supplier. Facing problems of capital constraints and even customer returns, the newsvendor-like retailer orders from a well-capitalized supplier. The supplier allows the retailer a delay in payment and provides a subsidy contract to alleviate its problems if it is profitable. Considering their difference of initial capital status, the retailer is assumed to be Follower of Stackelberg Game and the supplier is the Leader. Findings The supplier return subsidy contract has some merits for both of partners in the chain. And it does not coordinate the supply chain when the retailer has enough initial capital; however, when the retailer is capital constrained, it does. In addition, the retailer’s initial capital level significantly affects the supplier’s subsidy decision. Research limitations/implications Return rate is simplified to a fixed proportion of completed demand. In addition, trade credit is only financing source in this paper, and other types of financing methods, such as bank credit, can be taken too. Originality/value This paper first incorporates trade credit financing and customer returns into a modeling framework to investigate the capital-constrained retailer’s joint operations and finance decisions and the value of supplier’s subsidy contract.

Coordination and Decision of Supply Chain Under

2019 ◽  
Vol 12 (3) ◽  
pp. 21-46 ◽  
Author(s):  
Guangdong Liu ◽  
Tianjian Yang ◽  
Yao Wei ◽  
Xuemei Zhang
Keyword(s):  
Supply Chain ◽  
Numerical Analysis ◽  
Cost Sharing ◽  
Supply Chain Coordination ◽  
Pareto Improvement ◽  
Optimal Price ◽  
Decentralized System ◽  
Risk Neutral ◽  
Future Work ◽  
Dependent Demand

In order to investigate supply chain coordination and decision under customer balking and stochastic demand, the article considers a two-echelon supply chain consisting of one manufacturer with risk-neutral and one retailer with risk-neutral and develops two models in a centralized and a decentralized system and the three contracts are designed to coordinate supply chain and the optimal price and customer balking strategies are obtained. The results show that the revenue and cost-sharing contract can coordinate supply chain under customer balking and price-dependent demand and achieve the Pareto-improvement; the expected sales quantity and expected reduced sales quantity are influenced conversely by the threshold of inventory and probability of a sale under customer balking. In addition, numerical analysis is given to verify the effectiveness of revenue and cost-sharing contract and the paper gives some managerial insights and puts forward to the future work at last.

scholarly journals The Optimal Pricing of Dual-Channel Supply Chain with the Third Party Product Recovery and Sales Effort

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-18 ◽  
Author(s):  
Limin Wang ◽  
Qiankun Song ◽  
Zhenjiang Zhao
Keyword(s):  
Supply Chain ◽  
Product Recovery ◽  
Third Party ◽  
Optimal Pricing ◽  
The Third ◽  
Dual Channel ◽  
Retail Channel ◽  
The Third Party ◽  
Dual Channel Supply Chain ◽  
Decentralized Model

The optimal pricing of dual-channel supply chain with the third party product recovery and sales effort is considered in this paper. The optimal selling pricing of direct channel and retail channel in the forward supply chain and the optimal collection pricing of retail channel and the third party in the backward supply chain are given for the general case under the centralized and decentralized model. Then, the effect of sales effort of the retailer and the optimal pricing strategy with sales effort under the centralized and decentralized model are provided and analyzed. Finally, the comparative analysis of four situations is carried out by numerical results.

scholarly journals Pricing Decisions of a Dual-Channel Closed-Loop Supply Chain under Uncertain Demand of Indirect Channel

2016 ◽  
Vol 2016 ◽  
pp. 1-13 ◽  
Author(s):  
Jie Gao ◽  
Xiong Wang ◽  
Qiuling Yang ◽  
Qin Zhong
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Stackelberg Game ◽  
Uncertain Demand ◽  
Direct Channel ◽  
Closed Loop Supply Chain ◽  
Pricing Decisions ◽  
Dual Channel ◽  
Decentralized Decision Making ◽  
The Impact

The dual-channel closed-loop supply chain (CLSC) which is composed of one manufacturer and one retailer under uncertain demand of an indirect channel is constructed. In this paper, we establish three pricing models under decentralized decision making, namely, the Nash game between the manufacturer and the retailer, the manufacturer-Stackelberg game, and the retailer-Stackelberg game, to investigate pricing decisions of the CLSC in which the manufacturer uses the direct channel and indirect channel to sell products and entrusts the retailer to collect the used products. We numerically analyze the impact of customer acceptance of the direct channel (θ) on pricing decisions and excepted profits of the CLSC. The results show that when the variableθchanges in a certain range, the wholesale price, retail price, and expected profits of the retailer all decrease whenθincreases, while the direct online sales price and manufacturer’s expected profits in the retailer-Stackelberg game all increase whenθincreases. However, the optimal recycling transfer price and optimal acquisition price of used product are unaffected byθ.

scholarly journals Dynamic Pricing Game in a Dual-channel Closed-loop Supply Chain with Heterogeneous Players and Delay Decision

2021 ◽  
Author(s):  
Yuhao Zhang ◽  
Tao Zhang
Keyword(s):  
Supply Chain ◽  
Nash Equilibrium ◽  
Dynamic Pricing ◽  
Closed Loop ◽  
Stackelberg Game ◽  
Consumer Preference ◽  
Direct Channel ◽  
Closed Loop Supply Chain ◽  
Dual Channel ◽  
Delay Decision

Abstract In this paper, we study a dual-channel closed-loop supply chain(CLSC), where the manufacturer wholesales the new product through the traditional retail channel and distributes the remanufactured product via a direct channel established by himself. We focus on developing two dynamic Stackelberg game models under the assumption of the retailer is an adaptive agent and the manufacturer is a bounded rational player with non-delay and delay decisions. The existence and locally asymptotic stability of Nash equilibrium is investigated, and also the complex dynamics of each model is illustrated including period-doubling bifurcation, Neimark-Sacker bifurcation, strange attractor and chaotic phenomena. Numerical simulations are conducted to examine the impacts of key parameters on the complex behaviors of the long-run dynamic Stackelberg game and the performance of chain members under various scenarios. The results reveal that the excessively high value of the price adjustment speed of the manufacturer, the consumer discount perception for the remanufactured product as well as the consumer preference degree to the direct channel have adestabilization effect on the Nash equilibrium. Besides, the delay decision adopted by manufacturer no matter in the traditional or direct channel does not always necessarily make the system more stable, but the appropriately delay weights can expand the stability domain of the system. Moreover, the manufacturer would suffer a significant profit loss while the retailer can capture more profits when the dual-channel CLSC system falls into periodic cycles and chaos motions. At last, the variable feedback control method is utilized to eliminate the delayed system chaos.

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