Collaborative R&D and Pricing Policy of Supply Chain under the Selection Behavior of Heterogeneous Customer

Abstract

Considering that a manufacturer and its core part supplier make collaborative R&D on serial products of 3 grades, high-, mid-, and low-grade, and their core parts according to costumers' preference for the performance, or intrinsic value, of products, we propose a collaborative R&D model based on costumers' selection behavior to study the collaborative R&D policy and pricing policy of the supply chain. Then we establish a bargaining game model to study how they allocate the profit they earned. We obtain the optimal policies through theoretic and experimental analysis, and we use Apple iPhone case to illustrate the models and conclusions of this paper. It is found that if the aim of the supply chain is only to maximize its total profit, it should only develop the high-grade product and make its price half of its intrinsic value; if the aim of the supply chain is to maximizing profit while increasing the sales and market shares of the serial products, it should at least develop the high-grade and low-grade product; the ratio of price between the higher grade and the lower grade should be greater than the corresponding ratio of the intrinsic value, while the difference of price between higher grade and the lower grade should be less than the corresponding difference of the intrinsic value.

The Complexity Analysis and Control of Time-Delay OEM Supply Chain considering R&D Efforts and Marketing Level

“…In recent years, there have been the growing concerns on R&D in the supply chains. Huang et al [6] present a collaborative R&D model based on costumers' selection behavior and analyze the joint decisions on R&D and pricing in a supply chain. Stefano and Montes-Sancho [7] explore how the interaction between dyadic and network relationships can contribute to increase the success of environmental R&D cooperation.…”