IDEAS home Printed from https://ideas.repec.org/a/wsi/apjorx/v35y2018i05ns0217595918500367.html
   My bibliography  Save this article

Pricing and Service Quality Guarantee Decisions in Logistics Service Supply Chain with Fairness Concern

Author

Listed:
  • Ni Du

    (School of Business, Central South University, Changsha, P. R. China2College of Engineering, Hunan Agricultural University, Changsha, P. R. China)

  • Qinglan Han

    (School of Business, Central South University, Changsha 410083, P. R. China)

Abstract

Although existing contributions that explore service quality guarantee problem of a logistic service supply chain (LSSC) consider fairness concern behavior of one member, little attention is paid to considering the combination of members’ fairness concern and the joint decision of pricing and service quality guarantee in LSSC. Therefore, it is necessary to research how different fairness concern affects the joint decision of pricing and service quality guarantee in an LSSC. First considering a price and quality-sensitive logistics service market, a basic model without fairness concern of a customized LSSC is established. Then, a new model with fairness concern of a decentralized LSSC is constructed based on the basic model. The optimal decision of the LSSC with fairness concern is investigated in three cases. In each case, we analyze the effect of fairness concern on the optimal decision, and the expected profits and utilities. Finally, some numerical studies are shown to verify our theoretical analyses and some managerial insights are given.

Suggested Citation

  • Ni Du & Qinglan Han, 2018. "Pricing and Service Quality Guarantee Decisions in Logistics Service Supply Chain with Fairness Concern," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(05), pages 1-41, October.
    • Handle: RePEc:wsi:apjorx:v:35:y:2018:i:05:n:s0217595918500367
    DOI: 10.1142/S0217595918500367
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0217595918500367
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0217595918500367?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. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    2. Vernon N. Hsu & Susan H. Xu & Boris Jukic, 2009. "Optimal Scheduling and Incentive Compatible Pricing for a Service System with Quality of Service Guarantees," Manufacturing & Service Operations Management, INFORMS, vol. 11(3), pages 375-396, May.
    3. Yang, Jing & Xie, Jinxing & Deng, Xiaoxue & Xiong, Huachun, 2013. "Cooperative advertising in a distribution channel with fairness concerns," European Journal of Operational Research, Elsevier, vol. 227(2), pages 401-407.
    4. Caliskan-Demirag, Ozgun & Chen, Youhua (Frank) & Li, Jianbin, 2010. "Channel coordination under fairness concerns and nonlinear demand," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1321-1326, December.
    5. Teck-Hua Ho & Xuanming Su, 2009. "Peer-Induced Fairness in Games," American Economic Review, American Economic Association, vol. 99(5), pages 2022-2049, December.
    6. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard, 1986. "Fairness as a Constraint on Profit Seeking: Entitlements in the Market," American Economic Review, American Economic Association, vol. 76(4), pages 728-741, September.
    7. Nicholas C. Petruzzi & Maqbool Dada, 1999. "Pricing and the Newsvendor Problem: A Review with Extensions," Operations Research, INFORMS, vol. 47(2), pages 183-194, April.
    8. So, Kut C. & Song, Jing-Sheng, 1998. "Price, delivery time guarantees and capacity selection," European Journal of Operational Research, Elsevier, vol. 111(1), pages 28-49, November.
    9. Sucky, Eric, 2006. "A bargaining model with asymmetric information for a single supplier-single buyer problem," European Journal of Operational Research, Elsevier, vol. 171(2), pages 516-535, June.
    10. Bhargava, Hemant K. & Sun, Daewon, 2008. "Pricing under quality of service uncertainty: Market segmentation via statistical QoS guarantees," European Journal of Operational Research, Elsevier, vol. 191(3), pages 1189-1204, December.
    11. Messinger, Paul R., 2016. "The role of fairness in competitive supply chain relationships: An experimental studyAuthor-Name: Choi, Sungchul," European Journal of Operational Research, Elsevier, vol. 251(3), pages 798-813.
    12. Charles J. Corbett & Xavier de Groote, 2000. "A Supplier's Optimal Quantity Discount Policy Under Asymmetric Information," Management Science, INFORMS, vol. 46(3), pages 444-450, March.
    13. Seifbarghy, Mehdi & Nouhi, Khashayar & Mahmoudi, Amin, 2015. "Contract design in a supply chain considering price and quality dependent demand with customer segmentation," International Journal of Production Economics, Elsevier, vol. 167(C), pages 108-118.
    14. Christoph H. Loch & Yaozhong Wu, 2008. "Social Preferences and Supply Chain Performance: An Experimental Study," Management Science, INFORMS, vol. 54(11), pages 1835-1849, November.
    15. Esmaeili, M. & Zeephongsekul, P., 2010. "Seller-buyer models of supply chain management with an asymmetric information structure," International Journal of Production Economics, Elsevier, vol. 123(1), pages 146-154, January.
    16. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    17. Tony Haitao Cui & Jagmohan S. Raju & Z. John Zhang, 2007. "Fairness and Channel Coordination," Management Science, INFORMS, vol. 53(8), pages 1303-1314, August.
    18. Chu, Wai Hung Julius & Lee, Ching Chyi, 2006. "Strategic information sharing in a supply chain," European Journal of Operational Research, Elsevier, vol. 174(3), pages 1567-1579, November.
    19. Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
    20. Weihua Liu & Dong Xie & Yang Liu & Xiaoyan Liu, 2015. "Service capability procurement decision in logistics service supply chain: a research under demand updating and quality guarantee," International Journal of Production Research, Taylor & Francis Journals, vol. 53(2), pages 488-510, January.
    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. Anchal Gupta & Rajesh Kumar Singh & Sachin Kr Mangla, 2022. "Evaluation of logistics providers for sustainable service quality: Analytics based decision making framework," Annals of Operations Research, Springer, vol. 315(2), pages 1617-1664, August.
    2. Jili Kong & Ziyu Chen & Xiaoping Liu, 2022. "A Review of Logistics Pricing Research Based on Game Theory," Sustainability, MDPI, vol. 14(17), pages 1-20, August.
    3. Guangsheng Zhang & Xiao Wang & Yu Zhang & Jiayun Kang, 2022. "Research on the Emission Reduction Decision of Cost-Sharing Logistics Service Supply Chain in the O2O Model," Sustainability, MDPI, vol. 14(20), pages 1-21, 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. Du, Shaofu & Nie, Tengfei & Chu, Chengbin & Yu, Yugang, 2014. "Reciprocal supply chain with intention," European Journal of Operational Research, Elsevier, vol. 239(2), pages 389-402.
    2. Đula, Ivan & Größler, Andreas, 2021. "Inequity aversion in dynamically complex supply chains," European Journal of Operational Research, Elsevier, vol. 291(1), pages 309-322.
    3. Avi Goldfarb & Teck-Hua Ho & Wilfred Amaldoss & Alexander Brown & Yan Chen & Tony Cui & Alberto Galasso & Tanjim Hossain & Ming Hsu & Noah Lim & Mo Xiao & Botao Yang, 2012. "Behavioral models of managerial decision-making," Marketing Letters, Springer, vol. 23(2), pages 405-421, June.
    4. Liu Shuren & Chen Huina & Chen Lili, 2016. "Inventory and Pricing Decisions Under Wholesale Price Contract with Social Preferences," Journal of Systems Science and Information, De Gruyter, vol. 4(1), pages 68-86, February.
    5. Messinger, Paul R., 2016. "The role of fairness in competitive supply chain relationships: An experimental studyAuthor-Name: Choi, Sungchul," European Journal of Operational Research, Elsevier, vol. 251(3), pages 798-813.
    6. Qingfeng Meng & Zhen Li & Jianguo Du & Huimin Liu & Xiang Ding, 2019. "Negotiation for Time Optimization in Construction Projects with Competitive and Social Welfare Preferences," Complexity, Hindawi, vol. 2019, pages 1-13, January.
    7. Wentao Yi & Chunqiao Tan, 2019. "Bertrand Game with Nash Bargaining Fairness Concern," Complexity, Hindawi, vol. 2019, pages 1-22, August.
    8. Nie, Tengfei & Du, Shaofu, 2017. "Dual-fairness supply chain with quantity discount contracts," European Journal of Operational Research, Elsevier, vol. 258(2), pages 491-500.
    9. Xia Yan & Shaofu Du & Li Hu, 2020. "Supply chain performance for a risk inequity averse newsvendor," Annals of Operations Research, Springer, vol. 290(1), pages 897-921, July.
    10. Yang, Jing & Xie, Jinxing & Deng, Xiaoxue & Xiong, Huachun, 2013. "Cooperative advertising in a distribution channel with fairness concerns," European Journal of Operational Research, Elsevier, vol. 227(2), pages 401-407.
    11. Sarkar, Sumit, 2019. "Gratitude, conscience, and reciprocity: Models of supplier motivation when quality is non-contractible," European Journal of Operational Research, Elsevier, vol. 277(2), pages 633-642.
    12. Weihua Liu & Shuqing Wang & DongLei Zhu & Di Wang & Xinran Shen, 2018. "Order allocation of logistics service supply chain with fairness concern and demand updating: model analysis and empirical examination," Annals of Operations Research, Springer, vol. 268(1), pages 177-213, September.
    13. Shuchen Ni & Chun Feng & Handan Gou, 2023. "Nash-Bargaining Fairness Concerns under Push and Pull Supply Chains," Mathematics, MDPI, vol. 11(23), pages 1-20, November.
    14. Zongsheng Huang, 2020. "Stochastic Differential Game in the Closed-Loop Supply Chain with Fairness Concern Retailer," Sustainability, MDPI, vol. 12(8), pages 1-21, April.
    15. Yu, Niu & Wang, Shumei & Liu, Zhixin, 2022. "Managing brand competition with consumer fairness concern via manufacturer incentive," European Journal of Operational Research, Elsevier, vol. 300(2), pages 661-675.
    16. Ke Wang & Jinwen Sun & Liang Liang & Xiaoyan Li, 2016. "Optimal contracts and the manufacturer’s pricing strategies in a supply chain with an inequity-averse retailer," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 107-125, March.
    17. Chai Caichun & Zhu Hailong & Feng Zhangwei, 2018. "Evolutionary Stable Strategies for Supply Chains: Selfishness, Fairness, and Altruism," Journal of Systems Science and Information, De Gruyter, vol. 6(6), pages 532-551, December.
    18. Li, Qingying, 2018. "The optimal multi-period modular design with fairness concerns," International Journal of Production Economics, Elsevier, vol. 206(C), pages 233-249.
    19. Du, Shaofu & Chen, Yuan & Peng, Jing & Nie, Tengfei, 2022. "Incorporating risk fairness concerns into wine futures under quality uncertainty," Omega, Elsevier, vol. 113(C).
    20. Wei Guangxing & Yao Yanling & Qin Yanhong, 2019. "Optimal Decision-Making of Low-Carbon Supply Chain Incorporating Fairness Concerns," Journal of Systems Science and Information, De Gruyter, vol. 7(3), pages 283-294, June.

    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:wsi:apjorx:v:35:y:2018:i:05:n:s0217595918500367. 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/apjor/apjor.shtml .

    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.