Responding to supplier temporary price discounts in a supply chain through ordering and pricing decisions

Xia, Yusen

doi:10.1080/00207543.2015.1061224

Cited by 10 publications

(7 citation statements)

References 26 publications

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“…When the discounts are moderate, it is the strongest. Xia [13] studied a supply chain with only one retailer and supplier and addressed how retailers should use their ordering and price decisions to respond to temporary price discounts from their suppliers. Gao et al [14] established a dualchannel supply chain model, studied the impact of price discounts on the bullwhip effect in e-commerce, and found that price discounts in online retail markets generally amplify the bullwhip effect in the retail supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Supply Chain Decision-Making and Coordination considering Anticipated Regret under Price Discount

Jian

Zhang

et al. 2020

Complexity

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The increasing homogeneous product market has made more competition among companies to focus on improving customers’ experience. In order to get more competitive advantages, companies often launch discount products to attract consumers. However, stimulated by discount products, the perception of anticipated regret is becoming stronger, which is an inevitable issue in front of companies with price discount strategy. Considering the impact of anticipated regret for discount products, this paper quantitatively describes the utility functions and deduces the demand functions of original price products and discount products. The theoretical analysis and numerical simulation are used to analyze centralized and decentralized models of supply chain for discount products. On its basis, the revenue-sharing contract is designed to optimize the profits of supply chain. This paper finds that the price of products increases first and then decreases with the increase of regret sensitivity coefficient and consumer heterogeneity. When the regret sensitivity coefficient and consumer heterogeneity are lower, companies in the supply chain can adopt the “skimming pricing” strategy in order to obtain more profits. When the regret sensitivity coefficient and consumer heterogeneity increase, companies in the supply chain can adopt “penetrating pricing” strategies to stimulate market demand. For high regret consumers, manufacturers can adopt a “commitment advertising” strategy to promise price and quality, and retailers can adopt a “prestige pricing” strategy to reduce consumer perception of regret. In response to products with higher differences in consumer acceptance, manufacturers can adopt a “differentiated customization” strategy to meet different types of consumer demand and retailers can adopt a “differential pricing” strategy for precise marketing.

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Section: Literature Reviewmentioning

confidence: 99%

Supply Chain Decision-Making and Coordination considering Anticipated Regret under Price Discount

Jian

Zhang

et al. 2020

Complexity

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“…Raju [3] first found that the increase in discount range would increase the variability of category sales, while the increase in discount frequency would have the opposite effect. Xia [4] solved the problem of how the retailer used ordering and pricing decision to respond to supplier's temporary price discount. Cai et al [5] analyzed three models: supplier Stackelberg, retailer Stackelberg, and Nash game, and found that considering price discount not only could bring more profits but also reduced channel conflicts in the supply chain.…”

Section: Literature Reviewmentioning

confidence: 99%

Study on Supply Chain considering Anticipated Regret under Price Discount

Zhang

2020

Complexity

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The aim of this study is to research the impact of consumer regrets on the supply chain caused by the company’s “discount promotion.” This paper introduces the theory of anticipated regret and price discount into the supply chain. By quoting the negative utility formula of consumers’ anticipated regret under price discount, it quantitatively describes the demand function of the original product and the discount product. The model under centralized and decentralized decision making is constructed, and revenue-sharing contract is adopted to coordinate the supply chain. The conclusions are as follows. (1) Affected by the anticipated regret under the price discount, the price of the product increases first and then decreases with the regret sensitivity coefficient and consumer heterogeneity sensitivity increases. In addition, the price under the leadership structure of the manufacturer is the highest. (2) Price discounts enhance consumers’ perception of anticipated regret. Under the stimulation of price discounts, the price of products increases first and then decreases. (3) The revenue-sharing contract could not coordinate the supply chain, and the introduction of a profit-sharing mechanism is achieved the Pareto improvement of the supply chain.

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“…Based on these basic models, integrated decisions on ordering and pricing are investigated under different settings Discrete Dynamics in Nature and Society 3 and perspectives, such as product return [2,28], supply uncertainty [29], service level constraint [30,31], multiple price markdowns [32], supply chain contracts [33,34], dual sourcing channel [35,36], and multiperiod planning [3,37,38]. Other creative works include the research on joint ordering and pricing decisions considering repeat-purchase based on the Bass model [39], retailer's ordering and pricing decisions of responding to the supplier's temporary price discounts [40], ordering and pricing model considering transshipment between two independent retailers [41], and retailer's joint ordering, pricing and advertising decisions [42].…”

Section: Integrated Decisions On Operations and Marketingmentioning

confidence: 99%

Optimal Ordering and Pricing Policies for Seasonal Products: Impacts of Demand Uncertainty and Capital Constraint

Shi

Fung

Guo

2016

Discrete Dynamics in Nature and Society

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With a stochastic price-dependent market demand, this paper investigates how demand uncertainty and capital constraint affect retailer's integrated ordering and pricing policies towards seasonal products. The retailer with capital constraint is normalized to be with zero capital endowment while it can be financed by an external bank. The problems are studied under a low and high demand uncertainty scenario, respectively. Results show that when demand uncertainty level is relatively low, the retailer faced with demand uncertainty always sets a lower price than the riskless one, while its order quantity may be smaller or larger than the riskless retailer's which depends on the level of market size. When adding a capital constraint, the retailer will strictly prefer a higher price but smaller quantity policy. However, in a high demand uncertainty scenario, the impacts are more intricate. The retailer faced with demand uncertainty will always order a larger quantity than the riskless one if demand uncertainty level is high enough (above a critical value), while the capital-constrained retailer is likely to set a lower price than the well-funded one when demand uncertainty level falls within a specific interval. Therefore, it can be further concluded that the impact of capital constraint on the retailer's pricing decision can be influenced by different demand uncertainty levels. Hindawi Publishing CorporationDiscrete Dynamics in Nature and Society decisions on ordering, pricing, and financing, which is not observed in existing literature. The main contributions and conclusions of this paper are as follows.(1) Studying Retailer's Integrated Decisions on Ordering, Pricing, and Financing. With introducing pricing decision into the "capital-constrained newsvendor" problem, this paper investigates the retailer's integrated ordering and pricing decisions in the presence of capital constraint. Results show that when market size is extremely small, the retailer will not borrow from the bank to order any quantity. Otherwise, it will borrow to order and its optimal order quantity and selling price can be uniquely determined.(2) Investigating the Impacts of Demand Uncertainty and Capital Constraint on Retailer's Optimal Ordering and Pricing Policies. Three models (i.e., the riskless model, uncertainty model, and uncertainty-underfunded model) are developed and in-depth comparisons of optimal solutions in three models are carried out to reveal how demand uncertainty and capital constraint affect retailer's integrated ordering and pricing policies. The problems are studied in a low and high demand uncertainty scenario, respectively, which is differentiated by an ingenious method, and plenty of conclusions are obtained through both theoretical analyses and numerical studies.The remainder of the paper is organized as follows. Section 2 presents the review of related literature. Section 3 describes the problem and provides the model notations and assumptions. Section 4 formulates three models and derives the optimal solutions. Sectio...

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Responding to supplier temporary price discounts in a supply chain through ordering and pricing decisions

Cited by 10 publications

References 26 publications

Supply Chain Decision-Making and Coordination considering Anticipated Regret under Price Discount

Supply Chain Decision-Making and Coordination considering Anticipated Regret under Price Discount

Study on Supply Chain considering Anticipated Regret under Price Discount

Optimal Ordering and Pricing Policies for Seasonal Products: Impacts of Demand Uncertainty and Capital Constraint

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