scholarly journals Differential Game Analysis of Optimal Strategies and Cooperation in Omni-Channel Organic Agricultural Supply Chain

2019 ◽  
Vol 11 (3) ◽  
pp. 848 ◽  
Author(s):  
Qifan Hu ◽  
Bing Xu
Keyword(s):  
Supply Chain ◽  
Differential Game ◽  
Cost Sharing ◽  
Consumer Preferences ◽  
Optimal Strategies ◽  
Revenue Sharing ◽  
Online Retailer ◽  
Organic Products ◽  
Income Ratio ◽  
Decision Mode

This paper aims to investigate the optimal strategies for both centralized and decentralized modes in a two-echelon omni-channel organic agricultural supply chain (OASC) which consists of one farmer cooperative and one online retailer. Furthermore, the contracts of cooperation between the members in OASC are discussed. Based on both theory differential game and bi-level programming, we utilize the Nerlove–Arrow model and Stackelberg model to examine five cases of decision modes for both agents in the OASC. Then, we achieve the optimal strategies where the specified sets of organic growing effort, organic traceability technology effort, propaganda input, and service input can guarantee the maximization of the related profits. As a result, we could obtain the values of the corresponding optimal profits. For the centralized decision mode, the farmer cooperative and the online retailer make decisions with the goal of maximizing the overall profits of the OASC. Meanwhile, for the decentralized decision mode with four different cases, each member will independently make a decision with the goal of maximizing his own profit respectively. In detail, as for the fully decentralized decision mode, no contracts exist in OASC; regarding the decentralized decision mode with an information traceability cost sharing contract, two members pay the information traceability cost together; and for the decentralized decision mode with a revenue sharing contract, two members share the revenue together; as to the decentralized decision mode with a comprehensive contract, there are two cooperative ways that information traceability cost sharing and revenue sharing can be achieved. In addition, we also considered factors such as the consumer preferences of organic products and the cross influence between channels in models. Finally, through sensitivity analysis and comparison of optimal strategies and profits, we found that: (1) high consumer preferences of organic products and high cross influence between channels are profitable; and (2) the choice of contract is influenced by the relative size of the offline marginal income ratio and the online marginal income ratio.

scholarly journals Coordinating Pricing and Advertising Decisions for Supply Chain under Consignment Contract in the Dynamic Setting

Complexity ◽  
2018 ◽  
Vol 2018 ◽  
pp. 1-11 ◽  
Author(s):  
Zhihui Wu ◽  
Lichao Feng ◽  
Dongyan Chen
Keyword(s):  
Supply Chain ◽  
Differential Game ◽  
Optimal Strategies ◽  
Feasible Region ◽  
Comparison Analysis ◽  
On Demand ◽  
Dynamic Setting ◽  
State Dependent ◽  
Differential Game Theory ◽  
Advertising Effort

In this paper, via the differential game method, the problems of the pricing and advertising decision are investigated by considering the effect of number of the platform users on demand. In addition, a novel contract is developed to coordinate the supply chain. Firstly, the optimal strategies of the pricing and advertising are given in the decentralized and centralized scenarios by applying the differential game theory. Also, the comparison analysis concerning on the optimal strategies is proposed in two decision scenarios. It is shown that the centralized scenario could lead to the higher advertising effort of each member and a lower retail price. Next, we construct the state-dependent contract with hope to coordinate the supply chain and then improve the performance of the supply chain. Finally, a numerical example is provided to illustrate the impacts of the price-elasticity index of demand and the effectiveness of the number of retailer’s platform users onto the feasible region of the corresponding contract.

scholarly journals Coordinating Contracts for Two-Echelon Supply Chain with Price and Promotional Sensitive Demand

2016 ◽  
Vol 10 (7) ◽  
pp. 132
Author(s):  
Hooman Abdollahi ◽  
Mohammad Talooni
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Supply Chain Coordination ◽  
Revenue Sharing ◽  
Profit Sharing ◽  
Promotional Effort ◽  
Revenue Sharing Contract ◽  
Pricing Decision ◽  
The Cost

<p class="zhengwen"><span lang="EN-GB">In this paper three coordinating contracts in supply chain namely (i) revenue-sharing contract (ii) cost-sharing contract (iii) profit-sharing contract are proposed for two echelon supply chain coordination perspective under promotion and price sensitive demand. In our model buyer makes the promotional decision and undertakes the promotional sales effort cost. It is shown that in decentralized channel the results are sub-optimal. It is found analytically that the revenue-sharing contract coordinates pricing decision but not promotional decision for all values of the promotional effort cost. It is also found that the cost-sharing contract fails to coordinate channel. The profit-sharing contract is demonstrated to coordinate both the pricing and the promotional decisions in the channel.</span></p>

scholarly journals Differential Game Analyses of Logistics Service Supply Chain Coordination by Cost Sharing Contract

2014 ◽  
Vol 2014 ◽  
pp. 1-10 ◽  
Author(s):  
Haifeng Zhao ◽  
Bin Lin ◽  
Wanqing Mao ◽  
Yang Ye
Keyword(s):  
Supply Chain ◽  
Differential Game ◽  
Cost Sharing ◽  
Supply Chain Coordination ◽  
Coordination Mechanism ◽  
Stackelberg Equilibrium ◽  
Logistics Service ◽  
Service Supply Chain ◽  
The Cost ◽  
Relationship Of

Cooperation of all the members in a supply chain plays an important role in logistics service. The service integrator can encourage cooperation from service suppliers by sharing their cost during the service, which we assume can increase the sales by accumulating the reputation of the supply chain. A differential game model is established with the logistics service supply chain that consists of one service integrator and one supplier. And we derive the optimal solutions of the Nash equilibrium without cost sharing contract and the Stackelberg equilibrium with the integrator as the leader who partially shares the cost of the efforts of the supplier. The results make the benefits of the cost sharing contract in increasing the profits of both players as well as the whole supply chain explicit, which means that the cost sharing contract is an effective coordination mechanism in the long-term relationship of the members in a logistics service supply chain.

scholarly journals Supply chain contracting coordination for fresh products with fresh-keeping effort

2017 ◽  
Vol 117 (3) ◽  
pp. 538-559 ◽  
Author(s):  
Qi Zheng ◽  
Petros Ieromonachou ◽  
Tijun Fan ◽  
Li Zhou
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Optimal Decision ◽  
Decision Variable ◽  
Coordination Problem ◽  
Content Type ◽  
Revenue Sharing Contract ◽  
Decentralized Decision Making

Purpose Fresh product loss rates in supply chain operations are particularly high due to the nature of perishable products. The purpose of this paper is to maximize profit through the contract between retailer and supplier. The optimized prices for the retailer and the supplier, taking the fresh-keeping effort into consideration, are derived. Design/methodology/approach To address this issue, the authors consider a two-echelon supply chain consisting of a retailer and a supplier (i.e. wholesaler) for two scenarios: centralized and decentralized decision making. The authors start from investigating the optimal decision in the centralized supply chain and then comparing the results with those of the decentralized decision. Meanwhile, a fresh-keeping cost-sharing contract and a fresh-keeping cost- and revenue-sharing contract are designed. Numerical examples are provided, and managerial insights are discussed at the end. Findings The results show that the centralized decision is more profitable than the decentralized decision; a fresh product supply chain (FPSC) can only be coordinated through a fresh-keeping cost- and revenue-sharing contract; the optimal retail price, wholesale price and fresh-keeping effort can all be achieved; and the profit of a FPSC is positively related to consumers’ sensitivity to freshness and negatively correlated with their sensitivity to price. Research limitations/implications This research is based on the assumption that demand is relatively stable. It has not addressed when demand is stochastic. Practical implications The findings would be useful for managers in fresh food sector in terms of how to deal with suppliers in order to maximize total profit while also provide freshest food to the customers. Originality/value Few studies have considered fresh-keeping effort as a decision variable in the modelling of supply chain. In this paper, a mathematical model for the fresh-keeping effort and for price decisions in a supply chain is developed. In particular, fresh-keeping cost-sharing contract and revenue-sharing contract are examined simultaneously in the study of the supply chain coordination problem.

scholarly journals Joint emission reduction dynamic optimization and coordination in the supply chain considering fairness concern and reference low-carbon effect

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Ziyuan Zhang ◽  
Liying Yu
Keyword(s):  
Supply Chain ◽  
Dynamic Optimization ◽  
Cost Sharing ◽  
Emission Reduction ◽  
Revenue Sharing ◽  
Marginal Effect ◽  
Low Carbon ◽  
Equilibrium Solutions ◽  
Fairness Concern ◽  
The Impact

<p style='text-indent:20px;'>In the context of low-carbon economy, in order to explore the impact of the fairness concern and reference low-carbon effect on supply chain members' balanced emission reduction decisions and profits, supply chain joint emission reduction dynamic optimization models under four different scenarios are built, in which the manufacturer's optimal emission reduction strategy, the retailer's optimal low-carbon promotion strategy and other equilibrium solutions are solved by differential game theory. On the basis of analysis, a contract is designed to achieve the coordination of the supply chain when members are fairness concern. Some findings are as follows. First, when consumers' purchasing behavior is significantly affected by the reference low-carbon effect, and they have higher expectations for the product's emission reduction level, consumers' reference low-carbon effect will discourage the manufacturer's enthusiasm to reduce emissions, and do harm to the profits of the manufacturer and the retailer. Second, the fairness concern behavior of both parties will aggravate the adverse effects of reference low-carbon effect, bring a detrimental effect on the performance of the supply chain, aggravate the double marginal effect of the supply chain, and cause continuous negative social influence. Third, the bilateral cost-sharing contract can encourage the manufacturer to increase emission reduction investment, the retailer to increase low-carbon promotion investment, and can achieve a Pareto improvement of both parties' profits and utilities. In addition, the two cost-sharing ratios are only proportional to the marginal revenue and fairness concern intensity of both parties. Finally, when the two cost-sharing ratios and the revenue-sharing coefficient meet a certain relationship and are within a reasonable range, the bilateral cost sharing-revenue sharing hybrid contract can reduce the double marginal effect and achieve supply chain coordination.</p>

COORDINATING TWO-ECHELON SUPPLY CHAINS UNDER STOCK AND PRICE DEPENDENT DEMAND RATE

2013 ◽  
Vol 30 (02) ◽  
pp. 1250051 ◽  
Author(s):  
SHIBAJI PANDA
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Integrated System ◽  
Cost Structure ◽  
Inventory Level ◽  
Selling Price ◽  
Implicit Information ◽  
Demand Rate

Coordination is imperative for improving supply chain performance. In this paper, we focus on coordination of a two-echelon supply chain consisting of a manufacturer and a price-setting retailer, which operates for a single product. Customer demand is influenced by retailer's instantaneous inventory level and selling price. The integrated system and the decentralized scenario, by considering manufacturer as the Stackelberg leader, are discussed. It is shown that conventional revenue sharing contract cannot coordinate the system but revenue and cost sharing (RCS) contract is able to coordinate the system and leads to a win–win outcome. The key contract parameters — cost sharing fraction, along with revenue sharing fraction and wholesale price are determined under explicit and implicit information of retailer's cost structure. Finally, it is shown that range of cost sharing fraction that leads to win–win situation is independent of the format of cost structure of retailer. Numerical examples are provided to illustrate the development of the model.

Price premium effect, supply contracts and strategic decision making under environmental considerations

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Vinay Ramani ◽  
Sanjeev Swami ◽  
Debabrata Ghosh
Keyword(s):  
Decision Making ◽  
Supply Chain ◽  
Cost Sharing ◽  
Revenue Sharing ◽  
Green Supply Chain ◽  
Price Premium ◽  
Theoretic Approach ◽  
Content Type ◽  
Technological Adoption ◽  
Revenue Sharing Contract

Purpose The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology adoption effort leading to a price premium effect for the supply chain players. Design/methodology/approach The paper uses game theoretic approach to analyze the model of inter-firm interaction in a vertical channel setting consisting of a retailer and manufacturer. The paper studies strategic decisions of the channel members in a decentralized and centralized structure and extends this to decision making under contractual settings. Findings A two-part tariff completely coordinates the green supply chain, while a cost sharing and revenue sharing contract only achieve partial coordination. Nevertheless, a cost sharing, as well as a revenue sharing contract, increases the greening and technological adoption effort by the manufacturer while yielding the supply chain members a strictly larger profit. Furthermore, a revenue sharing contract in comparison to a cost sharing contract, leads to a larger greening and technological adoption effort by the manufacturer, lower wholesale and retail prices and a strictly larger profit for both the manufacturer and the retailer. Originality/value This paper contributes to the green supply chain pricing, technology and contract literature considering strategic interactions between a manufacturer and retailer in a supply chain under price premium effects of greening activities and technological advancements.

scholarly journals Optimal Strategies for Low Carbon Supply Chain with Strategic Customer Behavior and Green Technology Investment

2016 ◽  
Vol 2016 ◽  
pp. 1-13 ◽  
Author(s):  
Wen Jiang ◽  
Xu Chen
Keyword(s):  
Supply Chain ◽  
Carbon Emissions ◽  
Optimal Strategies ◽  
Revenue Sharing ◽  
Green Technology ◽  
Customer Behavior ◽  
Investment Strategies ◽  
Low Carbon ◽  
Technology Investment ◽  
Carbon Supply

Climate change is mainly caused by excessive emissions of carbon dioxide and other greenhouse gases. In order to reduce carbon emissions, cap and trade policy is implemented by governments in many countries, which has significant impacts on the decisions of companies at all levels of the low carbon supply chain. This paper investigates the decision-making and coordination of a low carbon supply chain consisting of a low carbon manufacturer who produces one product and is allowed to invest in green technology to reduce carbon emissions in production and a retailer who faces stochastic demands formed by homogeneous strategic customers. We investigate the optimal production, pricing, carbon trading, and green technology investment strategies of the low carbon supply chain in centralized (including Rational Expected Equilibrium scenario and quantity commitment scenario) and decentralized settings. It is demonstrated that quantity commitment strategy can improve the profit of the low carbon supply chain with strategic customer behavior. We also show that the performance of decentralized supply chain is lower than that of quantity commitment scenario. We prove that the low carbon supply chain cannot be coordinated by revenue sharing contract but by revenue sharing-cost sharing contract.

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