Coordination in a retailer‐dominated supply chain with a risk‐averse manufacturer under marketing dependency

This paper investigates pricing decisions with different time sequences in a cross‐border dual‐channel supply chain, in which the manufacturer produces products in country A and sells them to country B via a retail channel and an online channel. Meanwhile, we design three scenarios, the manufacturer‐led earlier scenario, the manufacturer‐led later scenario, and the retailer‐led scenario, to analyze the effects of time sequences when the manufacturer is risk neutral or risk averse. Through modeling and analysis, it is concluded that whether the manufacturer is risk averse or not, the manufacturer prefers the manufacturer‐led earlier scenario and the retailer's preference is the retailer‐led scenario. That is, when considering the time sequences, the players are encouraged to make all decisions in the first stage. Moreover, this paper analyzes the effects of the exchange rate and delivery lead time on the players’ pricing decisions. The theoretical and numerical analyses also show that the effects of an increasing exchange rate on the profits of the manufacturer and retailer are associated with the cost of the online channel. Additionally, while reducing the delivery lead time can attract customers, a moderate delivery lead time is more advantageous for the manufacturer. Finally, we further verify the robustness of the impacts of time sequences when the manufacturer is risk averse. Interestingly, if the cost of the online channel is higher, then the risk‐averse behavior benefits the retailer.

Section: Literature Reviewmentioning

confidence: 99%

Pricing decisions with different time sequences in a cross‐border dual‐channel supply chain

Xue

2021

“…Huang et al. () study coordination and risk‐sharing problem in a supply chain with a risk‐averse manufacturer. Yuan et al.…”

Section: Literature Reviewmentioning

confidence: 99%

Influences of supply chain finance on the mass customization program: risk attitudes and cash flow shortage

Guo

Liu

2019

In recent years, to satisfy diversified customer needs in the target market, an increasing number of brands have launched mass customization (MC) programs as one of their core operations strategies. The production process flexibility and personalization degree of customized products (i.e., the MC products) have thus become key to the success of MC schemes. In the meantime, however, considering the high market uncertainty in consumer preferences and the challenges from the production process, there are plenty of risks in MC operations. Hence, in this paper we develop a game-theoretic model consisting of an MC brand and an upstream manufacturer to identify the influences of supply chain finance (SCF) on MC programs. The influences brought by the risk attitudes of both MC brand and manufacturer are analyzed. Besides, an extra interest rate for raising the working capital for production (e.g., from the bank) at the manufacturing level is also considered in this paper to address the impact of cash flow shortage. We find that when the positive sensitivity of the market demand with respect to the modularity level of the MC product is sufficiently high, the optimal product modularity level of the MC product increases with the MC brand's degree of risk averse. In addition, it can also be observed that when both the market demand's positive sensitivity to the modularity level of the MC product and the MC brand's opportunity cost rate for placing the advance order are sufficiently high, any increase in the risk-averse degree of the MC brand or the manufacturer will lower the manufacturer's optimal wholesale price of the MC product as well as the MC brand's optimal rate of the advance order. Furthermore, the higher the interest that the manufacturer needs to pay (such as to the bank) for raising the working capital for the MC production process, the lower the optimal wholesale price of each finished MC product will be to help the manufacturer raise more money through the advance order placed by the MC brand. These observations complete the findings in the extant literature and provide important managerial insights into managing MC operations.

“…Huang et al. () employed a combined incentive mechanism to coordinate the supply chain. The given combined contract was included in cost sharing and option contracts and they obtained Pareto improvement.…”

Section: Introduction and Literature Reviewmentioning

confidence: 99%

Coordination of a two‐echelon supply chain in presence of market segmentation, credit payment, and quantity discount policies

Taleizadeh

Rabiei

Noori-daryan

2018

In today's competitive business markets, a revenue optimization method is always one of the most crucial issues ahead of commercial supply chains so that it is utilized by the managers to improve their profitability. On the other hand, enhancing coordination and collaboration between the chains' members has taken a vital role in increasing their efficiency and profitability. Thus, managers tend to employ/design marketing and coordinating incentive mechanisms using the revenue optimization method, as the most influential tools, to motivate the purchasers to order more and subsequently increase their market share. Here, this issue is studied in a two-echelon supply chain by designing incentive contracts in order to evaluate the profit of organizations and enterprises and assess the best contract, which causes the highest profit, as the main goal of the businesses. In this study, a pricing-inventory model is developed for a single-item two-echelon supply chain consisting of a manufacturer and a retailer in the presence of three different scenarios. In the first scenario, a credit payment (delay-in-payment) contract is considered between the chain members. In the second scenario, we studied a market segmentation policy in which the market demand is divided into price and quality oriented customers' demand while a quantity discount contract is assumed as the third one. The profit of supply chain under these new conditions is computed by some numerical examples and then the effects of cost parameters on the decision variables and the profit are analyzed.