Bing Han, Tianze Chi, Fangjie Hu and Mengjun Wang
This paper divides the dyadic supply chain into three power structures according to the relative channel power of the supply chain members and consequently examines the optimal…
Abstract
Purpose
This paper divides the dyadic supply chain into three power structures according to the relative channel power of the supply chain members and consequently examines the optimal supply chain pricing decisions when both suppliers and retailers are concerned with fairness issues.
Design/methodology/approach
Three models are constructed, namely the Stackelberg game model with the supplier as the leader, the Nash game model with the balance of power and another Stackelberg game model with the retailer as the leader. The equilibrium solutions are solved, and their results are analyzed.
Findings
The retail price of a product increases with an increase in the fairness concerns of the leader in a supply chain in which the supplier or retailer is the leader, while the fairness concerns of the member with less channel power have no effect on the retail price. In a power-balanced supply chain, both suppliers and retailers increase their retail prices as their fairness concerns increase. The relative size of the members’ fairness concerns affects member profits and total supply chain profits.
Originality/value
The main contributions are as follows: First, this paper proposes a new approach to studying supply chain pricing strategy, considering fairness concerns and power structure. Secondly, three game models are constructed. The Nash equilibrium solution is introduced to study the fairness of supply chain participants in pricing decisions and overall supply chain profitability. Finally, the supply chain management theory is expanded by this study on pricing decisions and supply chain performance.
Details
Keywords
This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.
Abstract
Purpose
This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.
Design/methodology/approach
This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context.
Findings
This paper identified the differing power dynamics that impact fairness concerns within supply chain parties and their resulting influence on pricing.
Originality/value
The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.