Competition and coordination in a fashion supply chain with wholesale pricing schemes

Research output: Book Chapters | Papers in Conference ProceedingsBook ChapterResearchpeer-review

32 Citations (Scopus)

Abstract

This chapter considers a two-echelon supply chain where a supplier determines his production quantity and a retailer chooses her order size and retail price for each period in an infinite horizon. Under a price-discount sharing (PDS) scheme, the supplier’s wholesale price linearly depends on the retail price. We develop a stochastic game in which these two supply chain members maximize their discounted profits. We show that a unique Nash equilibrium solution exists for each period, and over the infinite horizon the supplier chooses a stationary base stock policy whereas the retailer’s equilibrium solution could be non-stationary. Next, we investigate the problem of whether or not a wholesale pricing scheme can coordinate the supplier and the retailer, and derive the conditions for supply chain coordination. Moreover, we use Nash arbitration scheme to allocate the system-wide profit between the supplier and the retailer.
Original languageEnglish
Title of host publicationFashion supply chain management : industry and business analysis
PublisherBusiness Science Reference
Pages42-73
Number of pages32
ISBN (Print)9781609607562
DOIs
Publication statusPublished - 1 Oct 2012

Fingerprint

Pricing
Supply chain
Suppliers
Retailers
Retail prices
Profit
Equilibrium solution
Infinite horizon
Arbitration
Base-stock policy
Nash equilibrium
Stochastic games
Supply chain coordination
Price discount
Wholesale prices
Order size

Cite this

HUANG, J., LENG, M., & LIANG, L. (2012). Competition and coordination in a fashion supply chain with wholesale pricing schemes. In Fashion supply chain management : industry and business analysis (pp. 42-73). Business Science Reference. https://doi.org/10.4018/978-1-60960-756-2.ch003
HUANG, Jian ; LENG, Mingming ; LIANG, Liping. / Competition and coordination in a fashion supply chain with wholesale pricing schemes. Fashion supply chain management : industry and business analysis. Business Science Reference, 2012. pp. 42-73
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HUANG, J, LENG, M & LIANG, L 2012, Competition and coordination in a fashion supply chain with wholesale pricing schemes. in Fashion supply chain management : industry and business analysis. Business Science Reference, pp. 42-73. https://doi.org/10.4018/978-1-60960-756-2.ch003

Competition and coordination in a fashion supply chain with wholesale pricing schemes. / HUANG, Jian; LENG, Mingming; LIANG, Liping.

Fashion supply chain management : industry and business analysis. Business Science Reference, 2012. p. 42-73.

Research output: Book Chapters | Papers in Conference ProceedingsBook ChapterResearchpeer-review

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HUANG J, LENG M, LIANG L. Competition and coordination in a fashion supply chain with wholesale pricing schemes. In Fashion supply chain management : industry and business analysis. Business Science Reference. 2012. p. 42-73 https://doi.org/10.4018/978-1-60960-756-2.ch003