IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v216y2012i2p409-419.html
   My bibliography  Save this article

Pricing decisions for substitutable products with a common retailer in fuzzy environments

Author

Listed:
  • Zhao, Jing
  • Tang, Wansheng
  • Zhao, Ruiqing
  • Wei, Jie

Abstract

The pricing problem of substitutable products in a fuzzy supply chain is analyzed by using game theory in this paper. There are two substitutable products produced by two competitive manufacturers respectively and then sold by one common retailer to the consumers. Both the manufacturing cost and the customer demand for each product are characterized as fuzzy variables. How the two manufacturers and the common retailer make their own pricing decisions about wholesale prices and retail prices are explored under four different scenarios, and the corresponding expected value models are developed in this paper. Finally, a numerical example is given to illustrate the effectiveness of the proposed supply chain models.

Suggested Citation

  • Zhao, Jing & Tang, Wansheng & Zhao, Ruiqing & Wei, Jie, 2012. "Pricing decisions for substitutable products with a common retailer in fuzzy environments," European Journal of Operational Research, Elsevier, vol. 216(2), pages 409-419.
    • Handle: RePEc:eee:ejores:v:216:y:2012:i:2:p:409-419
    DOI: 10.1016/j.ejor.2011.07.026
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221711006588
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2011.07.026?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amid, A. & Ghodsypour, S.H. & O'Brien, C., 2006. "Fuzzy multiobjective linear model for supplier selection in a supply chain," International Journal of Production Economics, Elsevier, vol. 104(2), pages 394-407, December.
    2. Lee, Chang Hwan, 2007. "Coordination on stocking and progressive pricing policies for a supply chain," International Journal of Production Economics, Elsevier, vol. 106(1), pages 307-319, March.
    3. Hua, Zhongsheng & Li, Sijie & Liang, Liang, 2006. "Impact of demand uncertainty on supply chain cooperation of single-period products," International Journal of Production Economics, Elsevier, vol. 100(2), pages 268-284, April.
    4. Timothy W. McGuire & Richard Staelin, 1983. "An Industry Equilibrium Analysis of Downstream Vertical Integration," Marketing Science, INFORMS, vol. 2(2), pages 161-191.
    5. Petrovic, Dobrila & Roy, Rajat & Petrovic, Radivoj, 1998. "Modelling and simulation of a supply chain in an uncertain environment," European Journal of Operational Research, Elsevier, vol. 109(2), pages 299-309, September.
    6. S. Chan Choi, 1991. "Price Competition in a Channel Structure with a Common Retailer," Marketing Science, INFORMS, vol. 10(4), pages 271-296.
    7. Webster, Scott & Kevin Weng, Z., 2008. "Ordering and pricing policies in a manufacturing and distribution supply chain for fashion products," International Journal of Production Economics, Elsevier, vol. 114(2), pages 476-486, August.
    8. Ryu, Kwangyeol & Yücesan, Enver, 2010. "A fuzzy newsvendor approach to supply chain coordination," European Journal of Operational Research, Elsevier, vol. 200(2), pages 421-438, January.
    9. Eunkyu Lee & Richard Staelin, 1997. "Vertical Strategic Interaction: Implications for Channel Pricing Strategy," Marketing Science, INFORMS, vol. 16(3), pages 185-207.
    10. Petrovic, Dobrila & Xie, Ying & Burnham, Keith & Petrovic, Radivoj, 2008. "Coordinated control of distribution supply chains in the presence of fuzzy customer demand," European Journal of Operational Research, Elsevier, vol. 185(1), pages 146-158, February.
    11. Wallace J. Hopp & Xiaowei Xu, 2005. "Product Line Selection and Pricing with Modularity in Design," Manufacturing & Service Operations Management, INFORMS, vol. 7(3), pages 172-187, August.
    12. Liu, Shiang-Tai & Kao, Chiang, 2004. "Solving fuzzy transportation problems based on extension principle," European Journal of Operational Research, Elsevier, vol. 153(3), pages 661-674, March.
    13. Lau, Amy Hing Ling & Lau, Hon-Shiang & Wang, Jian-Cai, 2008. "How a dominant retailer might design a purchase contract for a newsvendor-type product with price-sensitive demand," European Journal of Operational Research, Elsevier, vol. 190(2), pages 443-458, October.
    14. Xie, Ying & Petrovic, Dobrila & Burnham, Keith, 2006. "A heuristic procedure for the two-level control of serial supply chains under fuzzy customer demand," International Journal of Production Economics, Elsevier, vol. 102(1), pages 37-50, July.
    15. Kumar, Manoj & Vrat, Prem & Shankar, Ravi, 2006. "A fuzzy programming approach for vendor selection problem in a supply chain," International Journal of Production Economics, Elsevier, vol. 101(2), pages 273-285, June.
    16. Hsieh, Chung-Chi & Wu, Cheng-Han, 2009. "Coordinated decisions for substitutable products in a common retailer supply chain," European Journal of Operational Research, Elsevier, vol. 196(1), pages 273-288, July.
    17. Handfield, Robert & Warsing, Don & Wu, Xinmin, 2009. "(Q,r) Inventory policies in a fuzzy uncertain supply chain environment," European Journal of Operational Research, Elsevier, vol. 197(2), pages 609-619, September.
    18. Lau, Amy Hing Ling & Lau, Hon-Shiang, 2003. "Effects of a demand-curve's shape on the optimal solutions of a multi-echelon inventory/pricing model," European Journal of Operational Research, Elsevier, vol. 147(3), pages 530-548, June.
    19. Rajaram, Kumar & Tang, Christopher S., 2001. "The impact of product substitution on retail merchandising," European Journal of Operational Research, Elsevier, vol. 135(3), pages 582-601, December.
    20. Giannoccaro, Ilaria & Pontrandolfo, Pierpaolo & Scozzi, Barbara, 2003. "A fuzzy echelon approach for inventory management in supply chains," European Journal of Operational Research, Elsevier, vol. 149(1), pages 185-196, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jie Wei & Jing Zhao, 2016. "Pricing decisions for substitutable products with horizontal and vertical competition in fuzzy environments," Annals of Operations Research, Springer, vol. 242(2), pages 505-528, July.
    2. Zhao, Jing & Tang, Wansheng & Wei, Jie, 2012. "Pricing decision for substitutable products with retail competition in a fuzzy environment," International Journal of Production Economics, Elsevier, vol. 135(1), pages 144-153.
    3. Peidro, David & Mula, Josefa & Jiménez, Mariano & del Mar Botella, Ma, 2010. "A fuzzy linear programming based approach for tactical supply chain planning in an uncertainty environment," European Journal of Operational Research, Elsevier, vol. 205(1), pages 65-80, August.
    4. Wong, Bo K. & Lai, Vincent S., 2011. "A survey of the application of fuzzy set theory in production and operations management: 1998-2009," International Journal of Production Economics, Elsevier, vol. 129(1), pages 157-168, January.
    5. Hu Huang & Hua Ke, 2017. "Pricing decision problem for substitutable products based on uncertainty theory," Journal of Intelligent Manufacturing, Springer, vol. 28(3), pages 503-514, March.
    6. Lee, Eunji & Minner, Stefan, 2024. "How power structure and markup schemes impact supply chain channel efficiency under price-dependent stochastic demand," European Journal of Operational Research, Elsevier, vol. 318(1), pages 297-309.
    7. Shin, Hojung & Park, Soohoon & Lee, Euncheol & Benton, W.C., 2015. "A classification of the literature on the planning of substitutable products," European Journal of Operational Research, Elsevier, vol. 246(3), pages 686-699.
    8. Zhao, Jing & Wang, Lisha, 2015. "Pricing and retail service decisions in fuzzy uncertainty environments," Applied Mathematics and Computation, Elsevier, vol. 250(C), pages 580-592.
    9. Shih-Pin Chen, 2017. "Effects of fuzzy data on decision making in a competitive supply chain," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(10), pages 1146-1160, October.
    10. Wu, Cheng-Han, 2012. "Price and service competition between new and remanufactured products in a two-echelon supply chain," International Journal of Production Economics, Elsevier, vol. 140(1), pages 496-507.
    11. Edirisinghe, N.C.P. & Bichescu, B. & Shi, X., 2011. "Equilibrium analysis of supply chain structures under power imbalance," European Journal of Operational Research, Elsevier, vol. 214(3), pages 568-578, November.
    12. Chakraborty, Abhishek & Mandal, Prasenjit, 2021. "Channel efficiency and retailer tier dominance in a supply chain with a common manufacturer," European Journal of Operational Research, Elsevier, vol. 294(1), pages 100-121.
    13. Yao-Yu Wang & Jiasen Sun & Jian-Cai Wang, 2016. "Equilibrium markup pricing strategies for the dominant retailers under supply chain to chain competition," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 2075-2092, April.
    14. Donna, Javier D. & Pereira, Pedro & Trindade, Andre & Yoshida, Renan C., 2020. "Direct-to-Consumer Sales by Manufacturers and Bargaining," MPRA Paper 105773, University Library of Munich, Germany.
    15. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    16. K. Sudhir, 2001. "Structural Analysis of Manufacturer Pricing in the Presence of a Strategic Retailer," Marketing Science, INFORMS, vol. 20(3), pages 244-264, October.
    17. Ingene, Charles A. & Parry, Mark E. & Xu, Zibin, 2020. "Resale Price Maintenance: Customer Service Without Free Riding," Journal of Retailing, Elsevier, vol. 96(4), pages 563-577.
    18. Vrinda Kadiyali & Pradeep Chintagunta & Naufel Vilcassim, 2000. "Manufacturer-Retailer Channel Interactions and Implications for Channel Power: An Empirical Investigation of Pricing in a Local Market," Marketing Science, INFORMS, vol. 19(2), pages 127-148, September.
    19. Chen, Xu & He, Jinzhe & Wang, Xiaojun, 2024. "Effects of product substitutability and power relationships on performance in triadic supply chains," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    20. Ronald W. Cotterill & William P. Putsis Jr., 1998. "Testing the Theory: Vertical Strategic Interaction and Demand Functional Form," Food Marketing Policy Center Research Reports 040, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:216:y:2012:i:2:p:409-419. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.