Industrial Engineering Journal

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Pricing Decisions of Supply Chain under Different Fairness Concern

  

  1. 1. School of Biological and Chemical Engineering, Chongqing University of Education, Chongqing 400067, China; 2.College of Management, Chongqing University of Technology, Chongqing 400054, China
  • Online:2016-04-30 Published:2016-05-27

Abstract:

In order to compare the pricing strategies and profits in a two-level supply chain based on absolute fairness concern and relative fairness concern of the retailer, the Stackelberg game model is established. Then, the optimal pricing strategies and profits are obtained through the converse solution method. The results show that the retailer’s fairness concern does not affect his pricing strategy, but will weaken the manufacturer’s wholesale price under two fairness concern situations. Therefore, the retailer gets more profit of supply chain than in fairness neutral situation. In addition,influenced by the retailer’s fairness concern level, the manufacturer’s wholesale price and the members’ profits show obvious segmented differences under two fairness concern situations.

Key words: fairness concern, supply chain, pricingdecision, Stackelberg game