IDEAS home Printed from https://ideas.repec.org/a/ids/ijmtma/v17y2009i3p289-314.html
   My bibliography  Save this article

Optimal pricing and advertising competition in two supply chains with deterministic demand

Author

Listed:
  • Zhongkai Xiong
  • Jiajia Nie

Abstract

In this paper, the impact of advertisement on the competitiveness of supply chains is examined with a price and advertising sensitive linear deterministic demand. Within the two supply chains investigated, two retailers compete for supply to customers and two manufacturers compete for advertisement. The pricing and the advertising level decisions in the system are analysed by two two-stage Stackelberg games with different decision rights designated to the parties involved. The manufacturers first set the advertising levels. Then, the retailers choose the retail prices simultaneously and independently. The retail price equilibrium and the advertising level equilibrium are characterised in centralised supply chain and in decentralised supply chain. Also, this paper shows how the optimal retail prices and advertising levels change with system parameters. In the system, there is an optimal degree of demand substitution, which minimises the manufacturer's advertising investment cost. Moreover, as retailer 1's market potential increases, the average advertising level decreases in the industry.

Suggested Citation

  • Zhongkai Xiong & Jiajia Nie, 2009. "Optimal pricing and advertising competition in two supply chains with deterministic demand," International Journal of Manufacturing Technology and Management, Inderscience Enterprises Ltd, vol. 17(3), pages 289-314.
    • Handle: RePEc:ids:ijmtma:v:17:y:2009:i:3:p:289-314
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=23935
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

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

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaojing Liu, 2016. "Contracting for Competitive Supply Chains under Network Externalities and Demand Uncertainty," Discrete Dynamics in Nature and Society, Hindawi, vol. 2016, pages 1-9, April.

    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:ids:ijmtma:v:17:y:2009:i:3:p:289-314. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=21 .

    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.