Pricing in spatial classification system in non-symmetric market demand based on the calculations of double interval grey numbers

Abstract

PurposeThe contemporary landscape of supply chains necessitates a comprehensive integration of multiple components encompassing production, distribution and customer engagement. The pursuit of supply chain harmony underscores the significance of pricing strategies within the framework of dual-channel distribution, particularly when confronted with the dynamics of asymmetric demand performance.Design/methodology/approachThis paper delves into a nuanced decision-making challenge anchored in a dual-channel distribution context featuring a retailer and two distinct products. Notably, the retailer’s decision-making process employs the computational framework of dual grey numbers, a robust tool for handling uncertainty.FindingsThis study revolves around applying game theory to manufacturers. Each manufacturer presents its aggregated price proposition to the retailer. Subsequently, the retailer identifies the optimal pricing configuration among the manufacturers' aggregate prices while adhering to constraints such as spatial classification and inventory costs. This article’s contribution extends to delineating the retailer’s capacity to discern the influence of product market potential and the aggregate product cost on the overall demand.Originality/valueThe model’s innovation lies in its harmonious fusion of spatial classification, pricing strategies and inventory control. Notably, this novel integration provides a platform for unraveling the intricate interplay between non-symmetric market potential, production costs and cross-sensitivity. The investigation is underscored by the utilization of the double interval grey numbers, a powerful computational approach that accommodates the inherent uncertainty pervasive in the domain. This study fills a gap in the existing literature by offering an integrated framework unifying spatial allocation, pricing decisions and inventory optimization.