The pricing strategy of dual-channel supply chain with risk-averse agents and heterogeneous preference consumers

Wang, Rufeng; Chang, Zhiyong; Yan, Shuli

doi:10.1108/k-07-2020-0476

Cited by 8 publications

(7 citation statements)

References 43 publications

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“…Aiming at the supply chain interruption, Kang et al discussed the impact of insured manufacturers in the dual-channel supply chain on the expected profit of the supply chain interruption (Kang et al, 2020). Some scholars have conducted research on the pricing strategy of dual-channel supply chain (Yi et al, 2021;Li et al, 2021a, b;Wang et al, 2021d).…”

Section: ) Routing Problemmentioning

confidence: 99%

Bridging the research-practice gap in supply chain risks induced by the COVID-19

Wang

Zhang²,

Li³

2022

BIJ

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PurposeThis study aims to explore the gap between research and practice on supply chain risks due to COVID-19 by exploring the changes in global emphasis on supply chain risk research.Design/methodology/approachThis work designed a research framework to compare the research of supply chain risks before and during the COVID-19 pandemic based on machining learning and text clustering and using the relevant publications of the web of science database.FindingsThe results show that scholars' attention to supply chain crisis has increased in the wake of the COVID-19 outbreak, but there are differences among countries. The United Kingdom, India, Australia, the USA and Italy have greatly increased their emphasis on risk research, while the supply chain risk research growth rate in other countries, including China, has been lower than the global level. Compared with the pre-pandemic period, the research of business finance, telecommunications, agricultural economics policy, business and public environmental occupational health increased significantly during the pandemic. The hotspots of supply chain risk research have changed significantly during the pandemic, focusing on routing problem, organizational performance, food supply chain, dual-channel supply chain, resilient supplier selection, medical service and machine learning.Research limitations/implicationsThis study has limitations in using a single database.Social implicationsThis work compared the changes in global and various countries' supply chain risk research before and during the pandemic. On the one hand, it helps to judge the degree of response of scholars to the global supply chain risk brought about by COVID-19. On the other hand, it is beneficial for supply chain practitioners and policymakers to gain an in-depth understanding of the relationship between the COVID-19 pandemic and supply chain risk, which might provide insights into not only addressing the supply chain risk but also the recovery of the supply chain.Originality/valueThe initial exploration of the changing extent of supply chain risk research in the context of COVID-19 provided in this paper is a unique and earlier attempt that extends the findings of the existing literature. Secondly, this research provides a feasible analysis strategy for supply chain risk research, which provides a direction and paradigm for exploring more effective supply chain research to meet the challenges of COVID-19.

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Section: ) Routing Problemmentioning

confidence: 99%

Bridging the research-practice gap in supply chain risks induced by the COVID-19

Wang

Zhang²,

Li³

2022

BIJ

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“…(2018) took interest in studying the optimal remanufacturing and pricing decisions under uncertain market demand scenario in the CLSC which composed of two risk sensitive retailers and a single OEM, the results show that when one retailer is more risk-averse, another retailer is likely to set a higher selling price; the OEM will achieve higher recovery to receive higher revenue, while the two retailers will both decline their profits. Wang et al. (2021b) conducted a specific research on the optimal pricing decisions on a dyadic supply chain composed of a single risk-averse manufacturer and one risk-averse retailer, the result showed that the wholesale price and retailing price will be lower than that in the scenario when the two members are both risk-neutral.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Ke et al (2018) took interest in studying the optimal remanufacturing and pricing decisions under uncertain market demand scenario in the CLSC which composed of two risk sensitive retailers and a single OEM, the results show that when one retailer is more risk-averse, another retailer is likely to set a higher selling price; the OEM will achieve higher recovery to receive higher revenue, while the two retailers will both decline their profits. Wang et al (2021b) conducted a specific research on the optimal pricing decisions on a dyadic supply chain composed of a single risk-averse manufacturer and one risk-averse retailer, the result showed that the wholesale price and retailing price will be lower than that in the scenario when the two members are both risk-neutral. constructed a CLSC which is made up of one capital-constrained OEM and a single riskaverse supplier, the OEM can get the capital flow from bank loan, trade credit and partial trade credit with bank loan (PTC-with-BL), coming to the conclusion that the PTC-with-BL K 52,8 scheme would be better than the other financing schemes when the supplier's risk-averse factor is high, which can strengthen both member's marginal profit and the expected profit of whole supply chain through contrastive analysis in mathematical simulations.…”

Section: Risk Averse In Clscmentioning

confidence: 99%

Optimal production and financing strategies for capital-constrained closed-loop supply chain under risk aversion

Xia

Chen

Liu

2022

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Purpose The purpose of this paper is to investigate the optimal production and financing strategies for the closed-loop supply chain (CLSC) composed of a capital-constrained original equipment manufacturer (OEM) and a risk-averse authorized remanufacturer (RM).Design/methodology/approach The authors formulate four models with different scenarios, namely, the OEM has sufficient capital; the OEM has limited capital without financing; the OEM adopts debt financing strategy; and the OEM adopts equity financing strategy. The equilibrium solutions of each scenario are obtained by backward induction method, the influences of risk aversion coefficient on the equilibrium solutions are examined and the OEM's optimal financing strategy is found by comparison analysis.FindingsWhen the OEM's initial capital is limited and the equity dividend ratio is less than a certain threshold, the equity financing strategy is more advantageous for the OEM. However, if the OEM's initial capital is extremely scarce and the dividend proportion is large, the OEM prefers the debt financing strategy. When considering financing, consumer surplus always decreases as the risk aversion factor increases; the debt financing strategy is more environmentally friendly compared with the equity financing strategy. Only the debt financing strategy can make both members in the CLSC achieve a win-win situation in a certain region when the dividend ratio is sufficiently large.Research limitations/implications It will be more fascinating if the model extends to such a case that the production operation situation in the CLSC composed of multiple OEMs in multiple periods. Furthermore, the remanufacturer's risk-averse information is asymmetry may be more realistic in our daily life.Originality/valueThere are three main differences from the existing research. One is that the remanufacturer's risk aversion originates from the uncertain remanufacturing cost instead of the uncertain market demand. Another is that the boundary conditions of the OEM prefer to adopt debt financing is obtained through the envelope theorem with Lagrange multiplier method. Last but not the least, this paper provides a good theoretical reference and practical guidance for the OEM to make the rational financing strategy selection in face of different degree of capital scarcity in the CLSC system. The value of the three aspects provides a theoretical basis for the optimal operation decisions of capital-constrained manufacturer considering the remanufacturer's risk aversion in the CLSC operation system.

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“…As is well known, in a Stackelberg game one player acts first and the other player acts second. Many scholars have used Stackelberg games to investigate price strategies in supply chain management [14][15][16]. Similarly to Li et al [6], we adopted consistent pricing in a dual-channel supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Pricing and Coordination Strategies of Dual Channels Considering Consumers’ Channel Preferences

Wang

Yan

2021

Sustainability

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With the rapid development of electronic commerce, consumers can freely buy the same product from a manufacturers’ Internet channel or a resellers’ physical channel. Based on the consumers’ channel preferences, this article classifies consumers into three types and investigates the price decision in a dual-channel supply chain using a Stackelberg game, which assumes that the manufacturer, as the game leader, first sets the wholesale price, then the reseller decides the retail price, according to the wholesale price. Furthermore, some numerical experiments are developed to investigate the impact of consumer acceptance, the degree of customer loyalty, and the proportion of identical shoppers on prices and profits. The results show that whether both the retail price and the wholesale price rise or fall depends on a combination of the cost of the physical channel and the Internet shopper’s acceptance of the Internet channel. The reseller’s profit is always lower than the manufacturer’s profit. The reseller’s profit is lower and the manufacturer’s profit is higher, compared with that of a traditional single channel supply chain. The numerical experiments showed that when an Internet shopper’s acceptance of an Internet channel is lower, the wholesale price and retail price in the dual channels will increase with an increase of the degree of customer loyalty (the proportion of identical shoppers). The reseller’s profit (the manufacturer’s profit) will reduce (rise) with the augmentation of the Internet shopper’s acceptance of an Internet channel. Finally, we design a revenue-sharing contract that can coordinate the supply chain and implement a win–win strategy for all partners. This work makes some contributions to the research area of coordination in dual-channel supply chains.

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The pricing strategy of dual-channel supply chain with risk-averse agents and heterogeneous preference consumers

Cited by 8 publications

References 43 publications

Bridging the research-practice gap in supply chain risks induced by the COVID-19

Bridging the research-practice gap in supply chain risks induced by the COVID-19

Optimal production and financing strategies for capital-constrained closed-loop supply chain under risk aversion

Pricing and Coordination Strategies of Dual Channels Considering Consumers’ Channel Preferences

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