Pricing strategies in a risk-averse dual-channel supply chain with manufacturer services
by Zhenhua Yang; Lin Huang; Yu Xia; Jianguo Liu
International Journal of Applied Decision Sciences (IJADS), Vol. 17, No. 6, 2024

Abstract: This paper studies a dual-channel supply chain consisting of one risk-averse manufacturer and one risk-averse retailer with stochastic demand. Herein, the manufacturer provides value-added services to enhance channel demand. First, the optimal pricing and service decisions of the channel members are investigated under different settings, i.e., the cooperative game, Bertrand game, and manufacturer Stackelberg (MS) game models. Second, the effects of channel members' risk aversion on optimal channel prices and expected utilities are analysed under the assumption that the manufacturer service is a decision variable and an exogenous variable, respectively. Third, sensitivity analysis and numerical simulation are performed to verify our propositions consistently and seek more managerial implications. The findings suggest that the manufacturer's value-added services in their direct channel will improve the direct price while decreasing the retail price. Consumers' channel loyalty degree has a great influence on the optimal price decisions and the performance of the channel members. The direct price increases while the retail price decreases in the manufacturer's value-added services. The retailer's risk aversion has a greater influence on price decisions than that of the manufacturer.

Online publication date: Wed, 02-Oct-2024

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