Coordinating advertising and pricing in a manufacturer–retailer channel

Xie, Jinxing; Wei, Jerry C.

doi:10.1016/j.ejor.2008.07.014

Cited by 287 publications

(171 citation statements)

References 45 publications

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“…The sale can be generated more by advertising. The primary demand for the market of the two products is D. With advertising cost k, the demand can be increased to b Dak , where a and b are the positive coefficient showing the advertising effect on demand (Xie and Wei, 2009). The marginal advertising effect on demand is usually decreasing, and thus 0 1 b  (Xie and Wei, 2009).…”

Section: Example 1: Advertising Promoted Supply Chainmentioning

confidence: 99%

“…The primary demand for the market of the two products is D. With advertising cost k, the demand can be increased to b Dak , where a and b are the positive coefficient showing the advertising effect on demand (Xie and Wei, 2009). The marginal advertising effect on demand is usually decreasing, and thus 0 1 b  (Xie and Wei, 2009). The sale price of the products is p and the marginal cost of the products is c. Now the two retailers can choose whether to sell the two products jointly and make the advertising jointly, or each sell one product and make the corresponding individual advertising.…”

Section: Example 1: Advertising Promoted Supply Chainmentioning

confidence: 99%

“…The higher value of b shows the company's unit advertising expense can attract more customer demand because of the possible reasons including appropriate advertising strategy and high-quality product (Milgrom and Roberts, 1986;Mooij and Hofstede, 2010). The value of b typically is a number between 0 and 1 (Xie and Wei, 2009), showing the marginal advertising effect on demand is usually decreasing. That is, although more advertising actions and costs can attract more customers, the marginal effect of the unit advertising cost on attracting customer demand becomes less.…”

Section: Case 2: Each Retailer Sells One Product and Makes Individualmentioning

confidence: 99%

See 2 more Smart Citations

Teaching the Mechanism of Horizontal and Vertical Supply Chain Coordination

2016

OSCM: An Int. Journal

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Coordinating stakeholder's actions in a supply chain provides an efficient approach to enhance supply chain performance and win today's fierce competition in the market. Using quantitative examples is proved to be an efficient pedagogical methodology to motivate students learning and facilitate students' in-depth knowledge in supply chain management education. This study provides six quantitative supply chain horizontal and vertical coordination examples, which aim to increase the profit of the whole supply chain. Each example describes the supply chain coordination model with the background of certain supply chain features. Numerical examples and sensitivity analysis are provided to illustrate the benefits of supply chain coordination visually. These examples serve as supplements of an introductory operations management/supply chain management course when the supply chain management fundamentals are taught. They offer a unique viewpoint and roadmap for instructors teaching operations management / supply chain management related courses.

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Section: Example 1: Advertising Promoted Supply Chainmentioning

confidence: 99%

Section: Example 1: Advertising Promoted Supply Chainmentioning

confidence: 99%

Section: Case 2: Each Retailer Sells One Product and Makes Individualmentioning

confidence: 99%

See 1 more Smart Citation

Teaching the Mechanism of Horizontal and Vertical Supply Chain Coordination

2016

OSCM: An Int. Journal

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“…Szmerekovsky and Zhang [16] investigate the issue of pricing and determination of advertising policy in a bi-level supply chain where the demand depends on the retail price and advertising expenditure. Xie et al [17,18] further extend this study and compare cooperative scenario with the two previously mentioned scenarios in which no cooperation is assumed between the manufacturer and the retailer. SeyedEsfahani et al [19] investigate cooperative advertisement in a bilevel supply chain considering a more comprehensive demand function under four power scenarios: equal power, manufacturer-Stackelberg, retailer-Stackelberg, and cooperation among the members; the results are then compared.…”

Section: Literature Reviewmentioning

confidence: 99%

A bi-level programming model for decentralized manufacturer-distributer supply chain considering cooperative advertising

2017

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Abstract. This paper studies a bi-level decentralized supply chain consisting of one manufacturer and one distributor. Along with global advertising, the manufacturer participates in part of local advertising expenditure incurred by the distributor. Bi-level programming is applied to model the relationship between the manufacturer and distributer under two power scenarios of Stackelberg game framework. In the rst scenario, we consider the manufacturer as the leader and in the latter, we allow the distributer to act as the dominant member of the supply chain. In order to tackle bi-level programming models, a meta-heuristic genetic algorithm with hierarchical structure is developed for each scenario and optimal policies for the members in terms of pricing, advertising, inventory, and demand allocation are determined. Finally, several computational experiments are conducted on the data obtained from an automotive spare parts supply chain to demonstrate the validity of the developed models and compare the bene ts of members as well as of the entire system.

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“…Raju and Zhang (2005) considered two-echelon supply chain model with a leading retailer, and studied how the parties collaborate for more benefit in the supply chain [7]. While Xie and Wei (2009) obtained optimal equilibrium price collaboration and cooperative advertising strategy by coordinating manufacturers and retailers [8]. Ouardighi and Kim (2010) constructed a supply chain with a vendor and two competing manufacturers who compete on price and product quality, and compared the supply chain coordination between the wholesale discount and revenue sharing contract [9].…”

Section: Introductionmentioning

confidence: 99%

Coordination Contracts for Two-Echelon Supply Chain with Price-and-Carbon-Emission Dependent Demand

Lu¹

2016

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As consumers' demand for low carbon products is growing, we develop a two-echelon supply chain with price-and-carbon-emission dependent demand consists of a dominant manufacturer and a retailer, and compare the optimal price and carbon emission and profit under the centralized and decentralized scenarios. Based on the manufacturer who wants to coordinate the whole supply chain, two different coordination contracts are proposed. We find that these two contracts not only improve profits of both sides, but also have the effect of carbon reduction. Finally we validate the effectiveness and environmental of these contracts through numerical examples.

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Coordinating advertising and pricing in a manufacturer–retailer channel

Cited by 287 publications

References 45 publications

Teaching the Mechanism of Horizontal and Vertical Supply Chain Coordination

Teaching the Mechanism of Horizontal and Vertical Supply Chain Coordination

A bi-level programming model for decentralized manufacturer-distributer supply chain considering cooperative advertising

Coordination Contracts for Two-Echelon Supply Chain with Price-and-Carbon-Emission Dependent Demand

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