IDEAS home Printed from https://ideas.repec.org/a/spr/operea/v20y2020i2d10.1007_s12351-017-0354-1.html
   My bibliography  Save this article

Dynamic model of a supply chain network with sticky price

Author

Listed:
  • Zhaobo Chen

    (Taiyuan University of Science and Technology)

  • Chunying Tian

    (Harbin University of Science and Technology)

  • Ding Zhang

    (State University of New York)

  • Dongyan Chen

    (Harbin University of Science and Technology)

Abstract

This article aims at studying the strategic behaviours of competing firms with sticky retail pricing for the product. We base our study in the context of a supply chain network comprising multiple manufacturers and retailers. The manufacturers are involved in the production of a homogeneous product while the retailers purchase the product and sell it to consumers in the end markets. The retail price of the product is sticky. A differential variational inequality model is proposed to handle the multiple agents and their independent behaviours. Furthermore, the existence and uniqueness of the solution to the dynamic supply chain network with sticky price are shown. A numerical example is provided to illustrate the model and the computational results of equilibrium behaviour are presented. This paper contributes to literature by introducing price stickiness into supply chain networks and developing a differential variational inequality model to analyze the dynamic strategies of firms in the decentralized supply chain network.

Suggested Citation

  • Zhaobo Chen & Chunying Tian & Ding Zhang & Dongyan Chen, 2020. "Dynamic model of a supply chain network with sticky price," Operational Research, Springer, vol. 20(2), pages 649-670, June.
    • Handle: RePEc:spr:operea:v:20:y:2020:i:2:d:10.1007_s12351-017-0354-1
    DOI: 10.1007/s12351-017-0354-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12351-017-0354-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12351-017-0354-1?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. Anna Nagurney & Dong Li, 2015. "A supply chain network game theory model with product differentiation, outsourcing of production and distribution, and quality and price competition," Annals of Operations Research, Springer, vol. 226(1), pages 479-503, March.
    2. Li, Jian & Wang, Shouyang & Cheng, T.C.E., 2010. "Competition and cooperation in a single-retailer two-supplier supply chain with supply disruption," International Journal of Production Economics, Elsevier, vol. 124(1), pages 137-150, March.
    3. Terry L. Friesz, 2010. "Dynamic Optimization and Differential Games," International Series in Operations Research and Management Science, Springer, number 978-0-387-72778-3, April.
    4. Wakolbinger, Tina & Toyasaki, Fuminori & Nowak, Thomas & Nagurney, Anna, 2014. "When and for whom would e-waste be a treasure trove? Insights from a network equilibrium model of e-waste flows," International Journal of Production Economics, Elsevier, vol. 154(C), pages 263-273.
    5. Terry L. Friesz & David Bernstein & Tony E. Smith & Roger L. Tobin & B. W. Wie, 1993. "A Variational Inequality Formulation of the Dynamic Network User Equilibrium Problem," Operations Research, INFORMS, vol. 41(1), pages 179-191, February.
    6. T. C. E. Cheng & Y. N. Wu, 2006. "A Multiproduct, Multicriterion Supply-Demand Network Equilibrium Model," Operations Research, INFORMS, vol. 54(3), pages 544-554, June.
    7. Nagurney, Anna & Liu, Zugang & Cojocaru, Monica-Gabriela & Daniele, Patrizia, 2007. "Dynamic electric power supply chains and transportation networks: An evolutionary variational inequality formulation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(5), pages 624-646, September.
    8. Anna Nagurney & Min Yu & Jonas Floden, 2013. "Supply chain network sustainability under competition and frequencies of activities from production to distribution," Computational Management Science, Springer, vol. 10(4), pages 397-422, December.
    9. Albert Y. Ha & Shilu Tong & Hongtao Zhang, 2011. "Sharing Demand Information in Competing Supply Chains with Production Diseconomies," Management Science, INFORMS, vol. 57(3), pages 566-581, March.
    10. Nagurney, Anna & Yu, Min & Floden, Jonas & Nagurney, Ladimer S., 2014. "Supply chain network competition in time-sensitive markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 112-127.
    11. Carlton, Dennis W, 1986. "The Rigidity of Prices," American Economic Review, American Economic Association, vol. 76(4), pages 637-658, September.
    12. Friesz, Terry L. & Lee, Ilsoo & Lin, Cheng-Chang, 2011. "Competition and disruption in a dynamic urban supply chain," Transportation Research Part B: Methodological, Elsevier, vol. 45(8), pages 1212-1231, September.
    13. Gérard P. Cachon & Marshall Fisher, 2000. "Supply Chain Inventory Management and the Value of Shared Information," Management Science, INFORMS, vol. 46(8), pages 1032-1048, August.
    14. Yu, Min & Nagurney, Anna, 2013. "Competitive food supply chain networks with application to fresh produce," European Journal of Operational Research, Elsevier, vol. 224(2), pages 273-282.
    15. Friesz, Terry L. & Rigdon, Matthew A. & Mookherjee, Reetabrata, 2006. "Differential variational inequalities and shipper dynamic oligopolistic network competition," Transportation Research Part B: Methodological, Elsevier, vol. 40(6), pages 480-503, July.
    16. Anna Nagurney, 2006. "Supply Chain Network Economics," Books, Edward Elgar Publishing, number 4242.
    17. M. G. Cojocaru & P. Daniele & A. Nagurney, 2005. "Projected Dynamical Systems and Evolutionary Variational Inequalities via Hilbert Spaces with Applications1," Journal of Optimization Theory and Applications, Springer, vol. 127(3), pages 549-563, December.
    18. Patrizia Daniele, 2006. "Dynamic Networks and Evolutionary Variational Inequalities," Books, Edward Elgar Publishing, number 3516.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Qiuyun Zhu & Xiaoyang Zhou & Aijun Liu & Chong Gao & Lei Xu & Fan Zhao & Ding Zhang & Benjamin Lev, 2022. "Equilibrium Optimization with Multi-Energy-Efficiency-Grade Products: Government and Market Perspective," Energies, MDPI, vol. 15(19), pages 1-23, October.

    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. Chan, Chi Kin & Zhou, Yan & Wong, Kar Hung, 2018. "A dynamic equilibrium model of the oligopolistic closed-loop supply chain network under uncertain and time-dependent demands," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 325-354.
    2. Anna Nagurney & Qiang Qiang, 2008. "An efficiency measure for dynamic networks modeled as evolutionary variational inequalities with application to the Internet and vulnerability analysis," Netnomics, Springer, vol. 9(1), pages 1-20, January.
    3. Toyasaki, Fuminori & Daniele, Patrizia & Wakolbinger, Tina, 2014. "A variational inequality formulation of equilibrium models for end-of-life products with nonlinear constraints," European Journal of Operational Research, Elsevier, vol. 236(1), pages 340-350.
    4. Dragicevic, Arnaud Z. & Barkaoui, Ahmed, 2017. "Forest-based industrial network: Case of the French timber market," Forest Policy and Economics, Elsevier, vol. 75(C), pages 23-33.
    5. Laura Scrimali, 2012. "Infinite Dimensional Duality Theory Applied to Investment Strategies in Environmental Policy," Journal of Optimization Theory and Applications, Springer, vol. 154(1), pages 258-277, July.
    6. Anna Nagurney & Min Yu & Deniz Besik, 2017. "Supply chain network capacity competition with outsourcing: a variational equilibrium framework," Journal of Global Optimization, Springer, vol. 69(1), pages 231-254, September.
    7. Friesz, Terry L. & Han, Ke, 2019. "The mathematical foundations of dynamic user equilibrium," Transportation Research Part B: Methodological, Elsevier, vol. 126(C), pages 309-328.
    8. Li, Dong & Nagurney, Anna, 2015. "A general multitiered supply chain network model of quality competition with suppliers," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 336-356.
    9. Nagurney, Anna & Yu, Min & Floden, Jonas & Nagurney, Ladimer S., 2014. "Supply chain network competition in time-sensitive markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 112-127.
    10. Friesz, Terry L., 2024. "Dynamic spatial price equilibrium, dynamic user equilibrium, and freight transportation in continuous time: A differential variational inequality perspective," Transportation Research Part B: Methodological, Elsevier, vol. 190(C).
    11. Anna Nagurney & Dong Li, 2014. "Equilibria and dynamics of supply chain network competition with information asymmetry in quality and minimum quality standards," Computational Management Science, Springer, vol. 11(3), pages 285-315, July.
    12. Zugang Liu & Anna Nagurney, 2009. "An integrated electric power supply chain and fuel market network framework: Theoretical modeling with empirical analysis for New England," Naval Research Logistics (NRL), John Wiley & Sons, vol. 56(7), pages 600-624, October.
    13. Chung, Sung H. & Weaver, Robert D. & Friesz, Terry L., 2013. "Strategic response to pollution taxes in supply chain networks: Dynamic, spatial, and organizational dimensions," European Journal of Operational Research, Elsevier, vol. 231(2), pages 314-327.
    14. Nagurney, Anna & Saberi, Sara & Shukla, Shivani & Floden, Jonas, 2015. "Supply chain network competition in price and quality with multiple manufacturers and freight service providers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 248-267.
    15. Ketzenberg, Michael & Oliva, Rogelio & Wang, Yimin & Webster, Scott, 2023. "Retailer inventory data sharing in a fresh product supply chain," European Journal of Operational Research, Elsevier, vol. 307(2), pages 680-693.
    16. Zhiyuan Wang & Zhiqiang (Eric) Zheng & Wei Jiang & Shaojie Tang, 2021. "Blockchain‐Enabled Data Sharing in Supply Chains: Model, Operationalization, and Tutorial," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 1965-1985, July.
    17. Patrizia Daniele & Sofia Giuffrè & Antonino Maugeri & Fabio Raciti, 2014. "Duality Theory and Applications to Unilateral Problems," Journal of Optimization Theory and Applications, Springer, vol. 162(3), pages 718-734, September.
    18. Jeremy Bertomeu & Pierre Jinghong Liang, 2015. "Disclosure Policy and Industry Fluctuations," Management Science, INFORMS, vol. 61(6), pages 1292-1305, June.
    19. Nagurney, Anna, 2021. "Supply chain game theory network modeling under labor constraints: Applications to the Covid-19 pandemic," European Journal of Operational Research, Elsevier, vol. 293(3), pages 880-891.
    20. Lejarza, Fernando & Baldea, Michael, 2022. "An efficient optimization framework for tracking multiple quality attributes in supply chains of perishable products," European Journal of Operational Research, Elsevier, vol. 297(3), pages 890-903.

    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:spr:operea:v:20:y:2020:i:2:d:10.1007_s12351-017-0354-1. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.