A Simulation-Based Study on the Optimal Pricing Strategy of Supply Chain System

Yuxian Li and Jiuhe Wang ()
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Yuxian Li: School of Economics and Management, Yanshan University, Qinhuangdao 066004, China
Jiuhe Wang: School of Economics and Management, Yanshan University, Qinhuangdao 066004, China

Sustainability, 2023, vol. 15, issue 14, 1-16

Abstract: In this paper, the utility function model is applied to study the pricing strategy and order/production strategy of a two-echelon supply chain. Through local point-to-point communication between multi-agents and considering the random communication delay of the system, the utility function is maximized based on the consistency theory, and the optimal price and order quantity are determined. The proposed algorithm is distributed and collaborative, which avoids the centralized demand for all node information and the drawbacks of system paralysis caused by node failure. In addition, we carried out a numerical simulation to verify the theoretical results and demonstrate the effectiveness of the multi-agent consensus theory in the stable operation of supply and demand within a supply chain when there is a random communication delay and the sudden failure of a supply chain enterprise. It further explains how the coefficient of consumer sensitivity to price affects pricing and order/production strategies.

Keywords: supply chain; multi-agent modeling; pricing strategy; communication delay; consistency (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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