Pricing and service effort strategy in a dual-channel supply chain with showrooming effect

Li, Guo; Li, Lin; Sun, Jiasen

doi:10.1016/j.tre.2019.03.019

Cited by 267 publications

(134 citation statements)

References 48 publications

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“…This is a standard formulation in supply chain models, where

θ

can have different interpretations. For example,

θ

could denote the service level (Desai, ; Desai & Srinivasan, ; Li et al, ; Tsay & Agarwal, ), the advertising effort (Desai, ), and greening effort (Azevedo et al, ; Ghosh & Shah, , ; Manget & Munnich, ; Swami & Shah, ). Interestingly, Azevedo et al () investigate the relationship between greening practices of the supply chain members and study its impact on supply chain outcomes.…”

Section: The Modelmentioning

confidence: 99%

Can incomplete information lead to better social outcomes?

Lahkar

Ramani

2020

Manage Decis Econ

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We consider a supply chain where manufacturers can be differentiated along two dimensions-product quality and cost of social responsibility effort. There are two types of manufacturers: high and low. Under complete information, high-type manufacturers exert a greater level of social responsibility effort in comparison with the low-type manufacturers. We then show that under incomplete information, high-type manufacturers have an incentive to exert an even greater level of social responsibility effort. Surprisingly, the extent of effort put in by high-type firms cannot be lower and, in some cases, can be strictly higher under incomplete information.

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“…This is a standard formulation in supply chain models, where

θ

can have different interpretations. For example,

θ

Section: The Modelmentioning

confidence: 99%

Can incomplete information lead to better social outcomes?

Lahkar

Ramani

2020

Manage Decis Econ

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“…The differentiation price υ is used as the market segmentation tool that divides a monolithic market share into two market segments subject to linear price sensitivity of β. Linear price-dependent deterministic demand is among the widely used for modeling pricing decisions in many applications, such as newsvendor pricing [101,103], pricing in RM [21,104,105], and pricing in SC [106][107][108]. Earlier studies have noted linear price-dependent demands are most suited because their ability to capture many realistic market scenarios while yet being simplistic [21,101,106,109].…”

Section: Deterministic Demandmentioning

confidence: 99%

“…Linear price-dependent deterministic demand is among the widely used for modeling pricing decisions in many applications, such as newsvendor pricing [101,103], pricing in RM [21,104,105], and pricing in SC [106][107][108]. Earlier studies have noted linear price-dependent demands are most suited because their ability to capture many realistic market scenarios while yet being simplistic [21,101,106,109]. The notion of differentiation price in the presence of cannibalization (demand leakage) described earlier in [16], and extended by a number of studies to split the market share optimally among the two market segments [6,7,23,58,59].…”

Section: Deterministic Demandmentioning

confidence: 99%

Price Differentiation and Inventory Decisions in a Socially Responsible Dual-Channel Supply Chain with Partial Information Stochastic Demand and Cannibalization

Raza

2020

Sustainability

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Corporate social responsibility (CSR) has received much of the attention in supply chain management, in particular the pricing decisions. Most existing models that enable CSR integration into pricing decisions in a supply chain context assume deterministic demand and focus on a single distribution channel. Despite the fact that dual-channel supply chain (DCSC) has received popularity, most pricing decisions models in DCSC assume fixed and deterministic market share distribution between channels, and no demand leakages (cannibalization). This paper addresses these gaps by proposing a CSR enabled DCSC model pricing in which the demand is considered to be stochastic and market share distribution between channels in DCSC is optimally determined using a differentiation price, and the impact of demand leakages is also taken into consideration. Unlike existing studies, which only enable pricing decisions due to deterministic demand consideration, comprehensive DCSC models are proposed that provide joint decisions framework on CSR investment, pricing, and inventories. We have also considered the extension of the demand scenario when the distribution of demand is unknown. The two most common coordination schemes, the centralized (integrated) and the decentralized coordination is explored for the three demand situations: (i) deterministic demand; (ii) stochastic with full information; and (iii) stochastic with partial information. We are able to find analytical (closed-form) solutions for most demand situations. The centralized coordination performed better compared to the decentralized for all demand scenarios. The models are benchmarked when the demand is stochastic with known and unknown distributions, as well as, the case of the deterministic demand. A detailed numerical analysis is also presented in order to study the impact of using the price differentiation for market segmentation, the demand leakage, and partial knowledge on the stochastic demand on the players’ decisions and revenues in the supply chain.

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“…Li and Ma [ 35 ] studied the influence of the manufacturer’s risk attitude on the market strategies of both participants under two market conditions of service spillover effect and non-service spillover effect. Li and Li [ 36 ] considered three strategies of the no-service, ex-ante, and ex-post service effort strategies, the influence of showrooming effect on enterprise pricing and service efforts in dual-channel supply chains are studied. Fan et al [ 37 ] studied the pricing and service cooperation decision-making of supply chain members under BOPS mode.…”

Section: Literature Reviewmentioning

confidence: 99%

The Complexity Entropy Analysis of a Supply Chain System Considering Recovery Rate and Channel Service

Shi

Deng

et al. 2019

Entropy

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In this paper, we study a dual-channel closed-loop supply chain in which a manufacturer considers the market waste products recovery and remanufacture, and a retailer considers provide services to customers. We build a Stackelberg game model and a centralized game model in a static and dynamic state, respectively, and analyze the two dynamic models by mathematical analysis and explore the stability and entropy of the two models using bifurcation, the basin of attraction, chaotic attractors, and so on. The influences of service level and profit distribution rate on the system’s profit are discussed. The theoretical results show that higher price adjustment speed will lead to the system lose stability with a larger entropy value. In the Stackelberg game model, the stability of the system increases as the service value and the recovery rate increases; in the centralized model, the stability of the system decreases with the increase of the service value and increases with the recovery rate increases. When the Stackelberg game model is in a stable state, the manufacturer’s profit increases first and then decreases, and the retailer’s profit first decreases and then increases as the service value of the retailer increases. The research will serve as good guidance for both the manufacturer and retailer in dual-channel closed-loop supply chains to improve decision making.

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Pricing and service effort strategy in a dual-channel supply chain with showrooming effect

Cited by 267 publications

References 48 publications

Can incomplete information lead to better social outcomes?

Can incomplete information lead to better social outcomes?

Price Differentiation and Inventory Decisions in a Socially Responsible Dual-Channel Supply Chain with Partial Information Stochastic Demand and Cannibalization

The Complexity Entropy Analysis of a Supply Chain System Considering Recovery Rate and Channel Service

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