Pricing Strategy of Dual-Channel Supply Chain under Demand Uncertainty

Abstract

Abstract: A supply chain composed of a manufacturer and a retailer is considered. This supply chain has two channels and its demands are subject to uncertainty in both channels. For such a supply chain, a model is built for pricing decision and coordination of the supply chain. With this model, analysis results show that the online price, wholesale price, and the retail price are influenced by consumer’s channel preference coefficient, demand uncertainty, and marginal cost of production. Also, comparative analysis is carried out between decentralized and centralized decision making modes. Then, a contract is presented for channel conflict remitting and profit sharing. Rational range of wholesale price is obtained. In the obtained wholesale price range, the lower the wholesale price is, the larger range of transfer payment the retailer presents to the manufacturer.

Key words: dual-channel, demand uncertainty, pricing strategy, Stackelberg game

Zeng Min-gang, Wang Xu-liang. Pricing Strategy of Dual-Channel Supply Chain under Demand Uncertainty[J]. Industrial Engineering Journal , 2013, 16(2): 67-73.

References

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