Pricing and advertisement in a manufacturer–retailer supply chain

We use a game theoretical approach to study pricing and advertisement decisions in a manufacturer–retailer supply chain when price discounts are offered by both the manufacturer and retailer. When the manufacturer is the leader of the game, we obtained Stackelberg equilibrium with manufacturer’s local allowance, national brand name investment, manufacturer’s preferred price discount, retailer’s price discount, and local advertising expense. For the special case of two-stage equilibrium when the manufacturer’s price discount is exogenous, we found that the retailer is willing to increase local advertising expense if the manufacturer increases local advertising allowance and provides deeper price discount, or if the manufacturer decreases its brand name investment. When both the manufacturer and retailer have power, Nash equilibrium in a competition game is obtained. The comparison between the Nash equilibrium and Stackelberg equilibrium shows that the manufacturer always prefers Stackelberg equilibrium, but there is no definitive conclusion for the retailer. The bargaining power can be used to determine the profit sharing between the manufacturer and the retailer. Once the profit sharing is determined, we suggest a simple contract to help the manufacturer and retailer obtain their desired profit sharing.     

How a dominant retailer might design a purchase contract for a newsvendor-type product with price-sensitive demand

A dominant retailer will purchase a newsvendor-type product from a manufacturer, who incurs a unit manufacturing cost k. The expected retail demand is a function of the unit retail price p. How should the retailer design her purchase contract? For this increasingly prevalent but inadequately studied scenario, we propose plausible adaptations of several contract formats that have been widely studied in the dominant-manufacturer context. For both symmetric-k and asymmetric-k-knowledge situations, we present performance results of these contracts. Our results then reveal that the performance of these contract formats under our scenario differs considerably from what one would surmise from the well-known results published for closely related scenarios. For example, the widely studied buyback and revenue-sharing formats turn out to be largely ineffective when implemented by a dominant retailer. In contrast, the two-part tariff format performs well relative to the theoretically optimal “menu of contracts.” Our results highlight the need to study purchase contract formats designed specifically for dominant-retailer newsvendor-product channels.     

721型分光光度计灯电源电路和稳压电路故障维修

介绍了７２１型分光光度计,灯电源电路和稳压电路故障现象,分析了故障产生的原因,提供了排除故障办法,对该仪器维修提供了借鉴的经验。     

A profit-maximizing supply chain network design model with demand choice flexibility

We present a profit-maximizing supply chain design model in which a company has flexibility in determining which customers to serve. The company may lose a customer to competition if the price it charges is too high. We show the problem formulation and solution algorithm, and discuss computational results.     

Contract type and decision right of sales promotion in supply chain management with a capital constrained retailer

From the practices of Chinese consumer electronics market, we find there are two key issues in supply chain management: The first issue is the contract type of either wholesale price contracts or consignment contracts with revenue sharing, and the second issue is the decision right of sales promotion (such as advertising, on-site shopping assistance, rebates, and post-sales service) owned by either manufacturers or retailers. We model a supply chain with one manufacturer and one retailer who has limited capital and faces deterministic demand depending on retail price and sales promotion. The two issues interact with each other. We show that only the combination (called as chain business mode) of a consignment contract with the manufacturer’s right of sales promotion or a wholesale price contract with the retailer’s right of sales promotion is better for both members. Moreover, the latter chain business mode is realized only when the retailer has more power in the chain and has enough capital, otherwise the former one is realized. But which one is preferred by customers? We find that the former is preferred by customers who mainly enjoy low price, while the latter is preferred by those who enjoy high sales promotion level.     

Resale price maintenance in supply chains with general multiplicative demand

We analyze a supply chain with a Resale Price Maintenance (RPM) contract in which the manufacturer sets the retail price with a general multiplicative price–demand function and prove the existence/uniqueness of an equilibrium. We also compare the equilibrium prices and quantities, consumer surplus and total system welfare for the RPM and wholesale price contracts. We conclude that a manufacturer may capture a smaller share of the total supply chain profit despite her ability to set the retail price.     

Contracting with asymmetric demand information in supply chains

We solve a buyback contract design problem for a supplier who is working with a retailer who possesses private information about the demand distribution. We model the retailer’s private information as a space of either discrete or continuous demand states so that only the retailer knows its demand state and the demand for the product is stochastically increasing in the state. We focus on contracts that are viable in practice, where the buyback price being strictly less than the wholesale price, which is itself strictly less than the retail price. We derive the optimal (for the supplier) buyback contract that allows for arbitrary allocation of profits to the retailer (subject to the retailer’s reservation profit requirements) and show that in the limit this contract leads to the first-best solution with the supplier keeping the entire channel’s profit (after the retailer’s reservation profit).     

Bundling decisions in supply chains

Firms often sell products in bundles to extract consumer surplus. While most bundling decisions studied in the literature are geared to integrated firms, we examine a decentralized supply chain where the suppliers retain decision rights. Using a generic distribution of customers’ reservation price we establish equilibrium solutions for three different bundling scenarios in a supply chain, and generate interesting insights for distributions with specific forms. We find that (i) in supply chain bundling the retailer’s margin equals the margin of each independent supplier, and it equals the combined margin when the suppliers are in a coalition, (ii) when the suppliers form a coalition to bundle their products the bundling gain in the supply chain is higher and retail price is lower than when the retailer bundles the products, (iii) the supply chain has more to gain from bundling relative to an integrated firm, (iv) the first-best supply chain bundling remains viable over a larger set of parameter values than those in the case of the integrated firm, (v) supplier led bundling is preferable to separate sales over a wider range of parameter values than if the retailer led the bundling, and (vi) if the reservation prices are uniformly distributed bundling can be profitable when the variable costs are low and valuations of the products are not significantly different from one another. For normally distributed reservation prices, we show that the bundling set is larger and the bundling gain is higher than that for a uniform distribution.     

Integrated inventory models considering permissible delay in payment and variant pricing strategy

The allocation of cost savings is very important for the success of the joint relationship between the buyer and vendor in supply chain management. This paper develops integrated models with permissible delay in payments for determining the optimal replenishment time interval and replenishment frequency. In addition, the variant pricing strategy is employed to obtain both sides’ cost savings in order to entice buyers to join long-term cooperative relationships. A simple solution algorithm is presented to allocate the cost savings in the integration model, and a numerical example is used to demonstrate the feasibility of the proposed integration models.     

On the strategy of supply chain collaboration based on dynamic inventory target level management: A theory of constraint perspective

After the financial tsunami in 2008, how to adjust the target inventory level dynamically and instantly in order to reduce the risk that an enterprise encountered in a rapid demand changing market has become a crucial issue in the field of supply chain management. This paper explores the strategies of supply chain collaboration by utilizing theory of constraint to achieve the goal of adjusting the target inventory level dynamically. Three time-series-data-mining techniques – Sequential Probability Ratio Test (SPRT), CUSUM chart and Auto-regression Test (AR(1)) are used to detect the timing of market demand change. The results are used to adjust the target inventory level. Simulation techniques are used to explore the relative efficiency of the demand-change detection for the three methods. The techniques are also used to explore the effectiveness of various inventory management strategies on inventory performance based on the three demand change detection methods.