The Equilibrium Decisions in a Two-Echelon Supply Chain under Price and Service Competition

Xiaonan Han, Xiaochen Sun and Yancong Zhou
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Xiaonan Han: Department of Mathematics, Tianjin University, Tianjin 300072, China
Xiaochen Sun: Department of Mathematics, Tianjin University, Tianjin 300072, China
Yancong Zhou: School of Information Engineering, Tianjin University of Commerce, Tianjin 300134, China

Sustainability, 2014, vol. 6, issue 7, 1-16

Abstract: This article studies a supply chain composed of a manufacturer and two competing retailers. The manufacturer produces two substitutable products and offers respective service levels to customers who buy one of the two products. Each retailer can only order one kind of product from the manufacturer, and then sell them to the market at a certain sale price. The demands for two products are influenced not only by the service levels the manufacturer provides, but also the sales prices of the two products. Furthermore, we investigate the equilibrium behavior of members in the supply chain with the aid of the Stackelberg game, and discover a number of insights concerning some important parameters. Finally, Numerical analysis is presented to validate our theoretical results and compare channel performances.

Keywords: supply chain; service competition; substitutable products; Stackelberg game (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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