Price strategies between a dominant retailer and manufacturers

Hsun-Jung Cho, Hou Kit Mak

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Supply chain-related game theoretical applications have been discussed for decades. This research accounts for the emergence of a dominant retailer, and the retailer Stackelberg pricing models of distribution channels. Research in the channel pricing game may use different definitions of pricing decision variables. In this research, we pay attentions to the retailer Stackelberg pricing game, and discuss the effects when choosing different decision variables. According the literature it was shown that the strategies between channel members depend critically on the form of the demand function. Two different demand forms - linear and non-linear - will be considered in our numerical example respectively. Our major finding is the outcomes are not relative to manufacturers' pricing decisions but to the retailer's pricing decision and choosing percentage margin as retailer's decision variable is the best strategy for the retailer but worst for manufacturers. The numerical results show that it is consistence between linear and non-linear demand form.

Original languageEnglish
Title of host publicationComputational Methods in Science and Engineering - Advances in Computational Science, Lectures Presented at the Int. Conference on Computational Methods in Science and Engineering 2008, ICCMSE 2008
Pages493-496
Number of pages4
DOIs
StatePublished - 1 Dec 2009
Event6th International Conference on Computational Methods in Sciences and Engineering 2008, ICCMSE 2008 - Hersonissos, Crete, Greece
Duration: 25 Sep 200830 Sep 2008

Publication series

NameAIP Conference Proceedings
Volume1148 2
ISSN (Print)0094-243X
ISSN (Electronic)1551-7616

Conference

Conference6th International Conference on Computational Methods in Sciences and Engineering 2008, ICCMSE 2008
CountryGreece
CityHersonissos, Crete
Period25/09/0830/09/08

Keywords

  • game theory
  • Stackelberg game
  • Supply chain

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