Wholesale price contract versus consignment contract in a supply chain considering dynamic advertising

Lu, Fuxiao; Zhang, Jianxiong

doi:10.1111/itor.12388

Cited by 47 publications

(34 citation statements)

References 62 publications

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“…e above examples and many previous research studies [1][2][3] show that deep collaboration and knowledge sharing among supply chain members may help each enterprise achieve higher return rates. In order to meet consumer's demand for product performance and improve market competitiveness, the manufacturer usually invests in R&D to improve innovation level of his product.…”

Section: Introductionmentioning

confidence: 69%

“…Zhou and Ye [29] studied the optimal equilibrium strategies in dualchannel supply chains by using the differential game and discussed how the cooperative advertising contract and the cooperative advertising and emission reduction cost sharing contract affect the optimal strategies and coordination of dual-channel supply chains. Lu et al [2] investigated the wholesale price contract and the consignment contract between a dominant retailer and her manufacturer under the effect of the dynamic advertising. Liu et al [30] studied the optimal coordination strategy of a dynamic supply chain under uncertain conditions via a stochastic differential game model and explored how to coordinate the effort level of node enterprise to maximize supply chain profit.…”

Section: Differential Game and Its Application In Supply Chainmentioning

confidence: 99%

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Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Hao

Chen

Hong

2020

Mathematical Problems in Engineering

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The collection and sharing of consumers’ knowledge by retailers can help manufacturers improve the innovation level of products, thereby improving the performance of supply chain. However, due to the cost of collecting consumers’ knowledge, the wholesale price contract can no longer coordinate supply chain members effectively. It is necessary to study the problem how the retailers are encouraged to make more efforts for the cooperative innovation with manufacturers. This paper introduces two dynamic incentive contracts for improving collaborative innovation level in a two-player supply chain, and the impacts of these contracts on supply chain’s performance are investigated, by using a Stackelberg differential game model. The manufacturer, as a Stackelberg leader, determines the R&D investment while the retailer is responsible for the retail price and the efforts in collection of the consumer’s information (or preference) to the products. The model incorporates a wholesale price contract and two incentive contracts to better understand how the manufacturer can facilitate the retailer’s efforts in the collection of consumer’s information and increase the profits of the members of supply chain. Our results suggest that the optimal profit of the supply chain, the retailer’s efforts in the collection of consumer’s knowledge, the retail price, and the innovation level under the reward incentive contract are higher than their counterparts in other contracts. In particular, the retailer’s optimal effort under the reward incentive contract is even higher than the one in the centralized decision scenario. However, if the manufacturer commits an effort target to the retailer, it shows that the retailer’s optimal effort is independent of the target. The manufacturer’s optimal R&D investments are constants in the three contracts under the dynamic setting. Furthermore, numerical simulations show that the effort target has little impact on profits of the supply chain although it affects the decision making of supply chain members to some extent, whereas the retailer’s marginal reward offered by the manufacturer influences the innovation level of product and the supply chain’s profit significantly.

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Section: Introductionmentioning

confidence: 69%

Section: Differential Game and Its Application In Supply Chainmentioning

confidence: 99%

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Hao

Chen

Hong

2020

Mathematical Problems in Engineering

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“…Lu et al. () investigate the traditional wholesale price contract and consignment contract between a dominant retailer and her manufacturer. The results show that, compared to the wholesale price contract, the consignment contract is more desirable from the perspectives of the retailer and the entire channel and can bring more consumer surplus.…”

Section: Literature Reviewmentioning

confidence: 99%

System dynamics simulation‐based model for coordination of a three‐level spare parts supply chain

Zhao

Chang

et al. 2019

Int Trans Operational Res

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In some spare parts distribution systems for consumption goods, a portion of consumers’ demand is met by inventories in maintenance outlets, while the remaining portion is satisfied with emergency orders from the supplier, which can enhance customers’ satisfaction but cause added order‐processing costs and transportation costs. Faced with the trade‐off between the supplier's and outlet's profits, it is highly crucial to design and coordinate a supply chain in a way that determines to what extent each level should hold inventories by considering classification of spare parts. Therefore, in this paper, a system dynamics approach is used to design a three‐level supply chain simulation model consisting of one business unit, one distribution center, and one maintenance outlet. The business unit and distribution center belong to one company, so we consider them as one supplier. Therefore, we focus on the coordination between the distribution center and the maintenance outlet. The objective is to propose a contract to enhance these two parties’ profits. Through numerical analysis, we provide a contract with which the spare parts in class A are differentiated in their normal and emergency procurement prices and the spare parts in class B and class C have a prescribed customer service level. Using this type of contract, both distribution center's and maintenance outlet's profits can be enhanced, and the management process can be simplified.

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“…The third stream is using the differential game model to find the optimal decision of the supply chain. Differential game model has been widely used in the field of supply chain management from different angles, such as goodwill [38], dynamic advertising [46,47], and carbon emission [48,49]. Different from these studies, this paper establishes differential game model to solve the optimal organic growing effort and organic traceability technology effort.…”

Section: Introductionmentioning

confidence: 99%

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

2019

Sustainability

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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.

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Wholesale price contract versus consignment contract in a supply chain considering dynamic advertising

Cited by 47 publications

References 62 publications

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

Collaborative Innovation with Dynamic Incentive Contracts in a Supply Chain

System dynamics simulation‐based model for coordination of a three‐level spare parts supply chain

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

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