Optimal Advertising Strategy for a Stackelberg Framework Under an Advertising-Driven Demand

Advertising-driven demand is very common in practice.This paper considers pricing and advertising strategies issues in a two-echelon supply chain involving a manufacturer and a retailer.According to who undertakes the advertising expenditure,both the retailer-advertising case and the manufacturer-advertising case are analyzed under the Stackelberg framework.The crucial factor that affects the advertising strategy and the optimal profit for each participant is revealed.Furthermore,we compare profits of the two participants under different situations.It is demonstrated that both the manufacturer and the retailer gain more profits in the retailer-advertising case than those in the manufacturer-advertising case.In other words,the retailer has more incentive to advertise the product for the sake of maximizing its profit.Finally,a numerical illustration is presented to examine the change of the profit for each participant under different marginal demands and promotion degrees.

Optimal Dual-Channel Dynamic Pricing of Perishable Items under Different Attenuation Coefficients of Demands

This paper discusses optimal dual-channel dynamic pricing of a retailer who sells perishable products in a finite horizon.The type of product which is equipped with different attenuation coefficients of demands on different sales channels is considered.Novel demand functions for the two channels are proposed according to attenuation coefficients of demands,and then a decision model is constructed,which can be handled stage-by-stage.It is shown that the sales price and the sales quantity of the channel which possesses more market shares are both higher than the ones of the other channel at each sales stage.More importantly,by analyzing the reasonability of the obtained solution,a necessary and sufficient condition is proposed to guarantee that both of the two channels will not stop selling through the entire period.We also propose an approach by the elimination method to deal with cases in which some channel stops selling.Further,we demonstrate that the channel which possesses more market shares is the optimal option when only one channel runs.Finally,numerical examples are presented to investigate the change of sales prices of the two channels under different market potential demands.

Game-theoretical Models of a Two-echelon Supply Chain Involving Two Substitutable Products

This paper considers tripartite pricing issues in a two-echelon supply chain involving duopolistic manufacturers and a single retailer.Firstly,a tripartite competitive model is conducted,in which both a Stackelberg game and a Bertrand game occur simultaneously.It is shown that the manufacturer who possesses a higher sales quantity gains more profits than the other one.Secondly,a definition of optimal vertical pricing alliance is proposed when cooperation exists between the retailer and some manufacturer.We conduct two-player games when partial cooperation exists among the three participants.It is demonstrated that the total profit of the alliance is higher than the sum profit of the corresponding two participants in the tripartite competition model,and meanwhile the profit of the manufacturer who is not in the alliance suffers a loss.Further,a criterion is given to judge which manufacturer the retailer will choose to cooperate in order to maximize the total increased profits.From the perspective of game theory,we examine the stability of the vertical alliance with considering the dominance of the retailer.Finally,a numerical illustration is designed to examine the judging criteria of which manufacturer is the member of the optimal alliance under different potential market demands.