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Pricing decisions of complementary products in a two-level fuzzy supply chain

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  • Jing Zhao
  • Jie Wei
  • Yongjian Li

Abstract

Pricing decisions of two complementary products in a two-level fuzzy supply chain with two manufacturers and one common retailer are studied in this paper. By considering the two manufacturers and one common retailer’s leader–follower relationship, the two manufacturers’ pricing strategy and the fuzzy uncertainties associated with the manufacturing costs and customer demands of the complementary products, seven pricing games are considered. The corresponding closed-form optimal pricing decisions are obtained in the seven pricing games. Through using numerical studies and sensitivity analysis of parameters’ fuzzy degree, we compare the analytical results of different games and investigate the firms’ optimal decisions facing changing pricing environments. At last, we analyse the effect of the fuzzy degree of key parameters on optimal prices, maximal expected demands and maximal expected profits of different games. Some interesting and valuable managerial insights are established.

Suggested Citation

  • Jing Zhao & Jie Wei & Yongjian Li, 2018. "Pricing decisions of complementary products in a two-level fuzzy supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 56(5), pages 1882-1903, March.
    • Handle: RePEc:taf:tprsxx:v:56:y:2018:i:5:p:1882-1903
    DOI: 10.1080/00207543.2016.1234082
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    Cited by:

    1. Subrata Saha & Zbigniew Banaszak & Grzegorz Bocewicz & Izabela Ewa Nielsen, 2022. "Pricing and quality competition for substitutable green products with a common retailer," Operational Research, Springer, vol. 22(4), pages 3713-3746, September.
    2. Wenzhu Zhang & Yue Dai & Lin Tian, 2021. "Pricing strategies for competitive firms with indirect network effects," Flexible Services and Manufacturing Journal, Springer, vol. 33(2), pages 547-581, June.

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