Pricing decisions of complementary products in a two-level fuzzy supply chain

Jing Zhao, Jie Wei and Yongjian Li

International Journal of Production Research, 2018, vol. 56, issue 5, 1882-1903

Abstract: Pricing decisions of two complementary products in a two-level fuzzy supply chain with two manufacturers and one common retailer are studied in this paper. By considering the two manufacturers and one common retailer’s leader–follower relationship, the two manufacturers’ pricing strategy and the fuzzy uncertainties associated with the manufacturing costs and customer demands of the complementary products, seven pricing games are considered. The corresponding closed-form optimal pricing decisions are obtained in the seven pricing games. Through using numerical studies and sensitivity analysis of parameters’ fuzzy degree, we compare the analytical results of different games and investigate the firms’ optimal decisions facing changing pricing environments. At last, we analyse the effect of the fuzzy degree of key parameters on optimal prices, maximal expected demands and maximal expected profits of different games. Some interesting and valuable managerial insights are established.

Date: 2018
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DOI: 10.1080/00207543.2016.1234082

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