scholarly journals Contract Manufacturer’s Encroachment Strategy considering Fairness Concern in Supply Chain

2021 ◽  
Vol 2021 ◽  
pp. 1-24
Author(s):  
Jing Shi
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Retail Price ◽  
Reservation Price ◽  
Numerical Examples ◽  
Fairness Concerns ◽  
Private Brand ◽  
Fairness Concern ◽  
The Impact ◽  
Positive Effect

More and more contract manufacturers have started to establish their own brands besides providing manufacturing service for retailers who operate exclusive well-known brands. This paper studies the encroachment strategy of a contract manufacturer in a supply chain and the impact of fairness concern. Four scenarios are investigated by building game models: no fairness concern, the retailer’s fairness concern, the contract manufacturer’s fairness concern, and both members’ fairness concern. The results show that when there is no fairness concern, the contract manufacturer always has motivation to encroach. However, when there exists fairness concern, only when the reservation price is sufficiently high, the contract manufacturer will encroach. Fairness concern has certain strength to stop the contract manufacturer’s encroachment. When the reservation price is sufficiently low, the encroachment of the contract manufacturer benefits the retailer, or else it will harm the benefit of the retailer. The effect of fairness concern on profit margin and wholesale price decisions is opposite under different encroachment strategies. However, the fairness concern has no impact on the retail price of the private brand. Under encroachment strategy, contract manufacturer’s or both members’ fairness concerns have positive effect on the retailer’s profit in certain conditions. However, the fairness concern always decreases the contract manufacturer’s profit no matter what the form it is. Numerical examples show that it is best for the supply chain that both members have fairness concern under no encroachment. However, when the contract manufacturer has a private brand, it is best for the supply chain that no one has fairness concern when the advantageous inequity concern parameter is sufficiently low. When the advantageous inequity concern parameter is sufficiently high, it is best for the supply chain that both members have fairness concern.

The Impact of Dual-Fairness Concerns Under Different Power

2019 ◽  
Vol 15 (3) ◽  
pp. 1-26
Author(s):  
Tianjian Yang ◽  
Guangdong Liu ◽  
Yao Wei ◽  
Xuemei Zhang ◽  
Xinglin Dong
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Equilibrium Structure ◽  
Retail Price ◽  
Green Supply Chain ◽  
Power Structures ◽  
Optimal Decisions ◽  
Fairness Concerns ◽  
Total Profit ◽  
The Impact

By analyzing the impact of different fairness concerns on a green supply chain, this study determines the optimal decisions under different power structures and conducts a comparative analysis of them. The findings of this study are summarized as follows: 1) under the manufacturer-dominated structure, retail price, wholesale price, product greenness, the manufacturer's profit, the total profit of the supply chain, the manufacturer's utility, and the retailer's utility are all negatively correlated with fairness concerns, but positively correlated with the retailer's profit; 2) under the retailer-dominated structure, fairness concerns have no impact on retail price, product greenness, or the total profit of the supply chain, are positively correlated with wholesale price and the manufacturer's profit and utility, and are negatively correlated with the retailer's profit and utility; 3) under the Nash equilibrium structure, fairness concerns have no impact on the green supply chain.

scholarly journals Research on the Dynamics Game Model in a Green Supply Chain: Government Subsidy Strategies under the Retailer’s Selling Effort Level

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-15 ◽  
Author(s):  
Xigang Yuan ◽  
Xiaoqing Zhang ◽  
Dalin Zhang
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Dynamic Game ◽  
Retail Price ◽  
Green Supply Chain ◽  
Government Subsidy ◽  
Principal Agent Theory ◽  
Effort Level ◽  
The Impact ◽  
Selling Effort

Based on dynamic game theory and the principal-agent theory, this paper examined different government subsidy strategies in green supply chain management. Assuming that the retailer’s level of selling effort involved asymmetric information, this study analyzed the impact of different government subsidy strategies on the wholesale price, the product greenness level, retail price, the level of selling effort, the manufacturer’s profit, and the retailer’s profit. The results showed that (1) the government’s subsidy strategy can effectively not only improve the product greenness level but also increase the profits of an enterprise in a green supply chain, which helps the retailer to enhance their selling effort; (2) regardless of whether the retailer’s level of selling effort was high or low, as the government’s subsidy coefficient increased, the wholesale price continued to decrease, and the product greenness level and retailer’s selling effort level also increased.

scholarly journals The Influence of Buyer Power on Supply Chain Pricing with Downstream Competition

2019 ◽  
Vol 11 (10) ◽  
pp. 2924
Author(s):  
Qiu Zhao
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Consumer Welfare ◽  
Retail Price ◽  
Retail Market ◽  
Pricing Decisions ◽  
Buyer Power ◽  
Downstream Competition ◽  
The Impact ◽  
Vertical Market

This paper aims to investigate the impact of buyer power on the wholesale price and retail price of, in the case, downstream competition. Based on a summary of the competitive characteristics of China’s retail market, a model of a vertical market was constructed to examine the influence of buyer power on the pricing decisions of manufacturers and retailers, and to analyze the mechanism of price decisions. The results showed that the buyer power of national retailers reduced the wholesale price, but the impact on local retailers remained uncertain. Although increasing buyer power initially increased the local retailer’s wholesale price and caused the ‘waterbed effect’, we found that this effect reverted when the buyer power reached a point at which the ‘anti-waterbed effect’ appeared. The opposite was true of the retail price. However, buyer power reduced the average retail price, and consumer welfare improved.

scholarly journals An Efficient Approach for Coordination of Dual-Channel Closed-Loop Supply Chain Management

2018 ◽  
Vol 10 (10) ◽  
pp. 3433 ◽  
Author(s):  
Muhammad Arshad ◽  
Qazi Khalid ◽  
Jaime Lloret ◽  
Antonio Leon
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Wholesale Price ◽  
Third Party ◽  
Equilibrium Strategy ◽  
Recycling Rate ◽  
Closed Loop Supply Chain ◽  
Dual Channel ◽  
Fairness Concern ◽  
The Impact

In this paper, a closed-loop supply chain composed of dual-channel retailers and manufacturers, a dynamic game model under the direct recovery, and an entrusted third-party recycling mode of the manufacturer is constructed. The impact of horizontal fairness concern behavior is introduced on the pricing strategies and utility of decision makers under different recycling models. The equilibrium strategy at fair neutrality is used as a reference to compare offline retails sales. Research shows that in the closed-loop supply chain of dual-channel sales, whether in the case of fair neutrality or horizontal fairness concerns, the manufacturer’s direct recycling model is superior to the entrusted third-party recycling, and the third-party recycling model is transferred by the manufacturer. In the direct recycling model, the horizontal fairness concern of offline retailers makes two retailers in the positive supply chain compete to lower the retail price in order to increase market share. Manufacturers will lower the wholesale price to encourage competition, and the price will be the horizontal fairness concern coefficient, which is negatively correlated. In the reverse supply chain, manufacturers increase the recycling rate of used products. This pricing strategy increases the utility of manufacturers and the entire supply chain system compared to fair neutral conditions, while two retailers receive diminished returns. Manufacturers, as channel managers to encourage retailers to compete for price cuts, can be coordinated through a three-way revenue sharing contract to achieve Pareto optimality.

scholarly journals Pricing Decisions of a Supply Chain with Multichannel Retailer under Fairness Concerns

2019 ◽  
Vol 2019 ◽  
pp. 1-22 ◽  
Author(s):  
Xueping Zhen ◽  
Dan Shi ◽  
Sang-Bing Tsai ◽  
Wei Wang
Keyword(s):  
Supply Chain ◽  
Stackelberg Game ◽  
Rapid Development ◽  
Wholesale Price ◽  
Selling Price ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Fairness Concern ◽  
Dual Channel Supply Chain ◽  
Offline Channels

With the rapid development of the Internet, many traditional retailers have built their online channels. The fairness concern may play an important role in a dual-channel supply chain with a multichannel retailer. This paper establishes a Stackelberg game model in which a manufacturer produces and sells products through direct online channel and a retailer sells directly to consumers through online and offline channels. The manufacturer’s fairness concern (advantageous inequity) and the retailer’s fairness concern (disadvantageous inequity) are considered. Four scenarios are investigated: no fairness concern (NF), the retailer fairness concern (RF), the manufacturer fairness concern (MF), and both the manufacturer and the retailer fairness concern (MRF). The theoretical analysis shows that if the manufacturer’s advantageous inequity concern is low, the profit of the whole supply chain in the MRF scenario is the greatest. Otherwise, the supply chain profit in the NF or RF scenario is the greatest. That is, the manufacturer’s and the retailer’s fairness concern may increase the profit of the supply chain. This study also finds that the manufacturer’s advantageous inequity concern can increase the social welfare. The retailer should not concern about fairness if the manufacturer has high fairness concern. Besides, this paper shows that the manufacturer’s selling price cannot be affected by the fairness concern. Adjusting the wholesale price is the only thing that the manufacturer can do to reduce disadvantageous or advantageous inequity. In the RF scenario, the role of the retailer’s disadvantageous inequity concern is to reallocate the supply chain profit. Our findings provide some managerial insights on the pricing decision when the multichannel retailer and the manufacturer consider the fairness.

scholarly journals A Closed-Loop Supply Chain Problem with Retailing and Recycling Competition

2014 ◽  
Vol 2014 ◽  
pp. 1-14
Author(s):  
Chuanchao Xu ◽  
Bo Li ◽  
Yanfei Lan ◽  
Yi Tang
Keyword(s):  
Supply Chain ◽  
Closed Loop ◽  
Retail Price ◽  
Closed Loop Supply Chain ◽  
Numerical Examples ◽  
Forward Channel ◽  
The Impact ◽  
Retail Products ◽  
Chain Problem ◽  
Stackelberg Leader

We investigate a durable product retailing and recycling problem in a closed-loop supply chain consisting of a single manufacturer and two competitive retailers, in which the manufacturer collects used products via retailers from the consumers and has sufficient channel power over the retailers to act as a Stackelberg leader; the retailers compete in retail products and recycling used products. In order to analyze the impact of retailing and recycling competitions on the profits of the manufacturer and the competitive retailers, two collection models (coordinated collection (ModelC) and decentralized collection (ModelD)) are established, respectively. Then, based on game theory, we derive the optimal retail price, the optimal repurchase price, and the optimal profits of the manufacturer and the retailers. The managerial insights demonstrate that more intense retailing competition induces the increase of the manufacturer's profits in both forward and reverse channels and retailers' profits in the forward channel and the decrease of retailers' profits in the reverse channel, while more intense recycling competition induces the decrease of the profits of the manufacturer and retailers in both forward and reverse channels. Finally, numerical examples are given to illustrate the effectiveness of the proposed models.

scholarly journals The Impact of Rebate Distribution on Fairness Concerns in Supply Chains

Mathematics ◽  
2021 ◽  
Vol 9 (7) ◽  
pp. 778
Author(s):  
Xi Jiang ◽  
Jinsheng Zhou
Keyword(s):  
Supply Chain ◽  
Positive Impact ◽  
Fairness Perception ◽  
Effort Level ◽  
Profit Distribution ◽  
Fairness Concerns ◽  
Normal Method ◽  
The Stability ◽  
Fairness Concern ◽  
The Impact

The reasonable distribution of supply chain profits among supply chain members is the core of the stability of a supply chain. Manufacturer rebates are a normal method to improve the performance of a supply chain and balance profit distribution. Based on consideration of the behavior preferences of supply chain members, in this paper, we study the influence of rebate distribution on supply chain utility. We establish a supply chain utility model, including the proportion of distribution, fairness concern coefficient and effort level, and discuss three different situations of supply chain members. The results show that (i) a manufacturer’s rebate can more effectively improve the utility in a supply chain with fairness perception; (ii) with other conditions unchanged, the fairness perception of supply chain members will have a positive impact on their own utility; and (iii) at the same time, when the party who has more discourse power in the supply chain has a sense of fairness, this is conducive to realizing the stable development of the supply chain through changes in the proportion of rebate distribution.

scholarly journals Optimal Emission Reduction and Pricing in the Tourism Supply Chain Considering Different Market Structures and Word-of-Mouth Effect

2021 ◽  
Vol 13 (7) ◽  
pp. 3893
Author(s):  
Xijia Huang ◽  
Shuai Zhu ◽  
Jia Wang
Keyword(s):  
Supply Chain ◽  
Word Of Mouth ◽  
Wholesale Price ◽  
Retail Price ◽  
Local Operator ◽  
Carbon Reduction ◽  
Price Demand ◽  
Tourism Supply Chain ◽  
The Impact ◽  
Tour Operator

In the context of carbon tax policy and word-of-mouth, local operators and tour operators in the tourism supply chain need to determine optimal wholesale price, carbon reduction level, and retail price of tour packages strategies. To address these decision-making issues, while considering the word-of-mouth effect, our paper considers a local operator determining wholesale price and carbon reduction level of the tour package and a tour operator determining retail price of the tour package. According to different bargaining powers, we study three scenarios: the local operator leading Stackelberg (LL), the tour operator leading Stackelberg (TL), and the static Nash game (NG). We develop three theoretical models and present some insights. We find that tourist’s sensitivity to word-of-mouth has positive (negative) impacts on optimal wholesale price, carbon reduction level, retail price, demand, and profits if the impact of word-of-mouth is positive (negative), while the impact of word-of-mouth is always having positive impacts on optimal decisions, demand, and profits. Interestingly, the NG market structure contributes the most environmentally-friendly products but mostly hurts the environment. The local operator under LL can obtain the largest profit, which is even larger than the profit of the tour operator, while the tour operator under NG and TL can obtain more profit than the local operator.

Optimal Decision-Making of Low-Carbon Supply Chain Incorporating Fairness Concerns

2019 ◽  
Vol 7 (3) ◽  
pp. 283-294 ◽  
Author(s):  
Guangxing Wei ◽  
Yanling Yao ◽  
Yanhong Qin
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Carbon Emissions ◽  
Retail Price ◽  
Optimal Decision ◽  
Low Carbon ◽  
Carbon Supply ◽  
Fairness Concerns ◽  
Optimal Decision Making ◽  
Fairness Concern

Abstract The optimal decision-making of the low-carbon supply chain incorporating fairness concerns, such as the effort of reducing carbon emissions, the whole sale price and retail price, is analyzed by taking the Nash bargaining solution as the fairness reference point. The following conclusions are found. Firstly, the wholesale price is strongly influenced by the fairness concern of the manufacturer but weakly influenced by that of the retailer, although both statistically significantly. Secondly, both the manufacturer’s and retailer’s fairness concerns reduce carbon emissions dramatically to nearly the same extent. Thirdly, the effect of the manufacturer’s fairness concern on the retail price is so tiny that it can almost be ignored, while the retailer’s fairness concern changes the retail price remarkably.

scholarly journals Impact of Retailer’s Vertical and Horizontal Fairness Concerns on Manufacturer’s Online Channel Mode

2021 ◽  
Vol 2021 ◽  
pp. 1-12
Author(s):  
Xuemei Zhang ◽  
Chenhao Ma ◽  
Haoran Chen ◽  
Guohu Qi
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Channel Structure ◽  
Direct Selling ◽  
Dual Channel ◽  
Fairness Concerns ◽  
Online Channel ◽  
Channel Mode ◽  
Dual Channel Supply Chain ◽  
The Impact

This paper investigates a dual-channel supply chain consisting of a manufacturer and a retailer, where the retailer exhibits vertical and horizontal fairness concerns. The manufacturer or the retailer direct selling and e-commerce platform agency selling modes are employed to characterize the impact of retailer’s fairness concerns on the online channel mode strategy. Results show that the retailer’s fairness concerns only affect the wholesale price and online channel mode strategy. Without the retailer’s fairness concerns, the manufacturer direct selling mode is the best strategy for the manufacturer, which harms the retailer’s utility. With the retailer’s fairness concerns, the manufacturer may choose the manufacturer direct selling or e-commerce platform agency selling mode. When the fairness concern parameters meet a certain range, the e-commerce platform agency selling mode strategy is better for the supply chain members, which can solve the interest conflict between supply chain members. These research findings help dual-channel supply chain members understand how to choose the channel structure strategy to balance the supply chain members’ interests by considering fairness concerns.

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