Abstract:
Coordinating the supply chain is among the most important subjects that is extensively addressed in the related literature. If a supply chain is to be coordinated, it is equivalent to say that we must solve a problem related to competition and cooperation. The game theory is obviously one of the most effective methods to solve such problems, in which the players of the supply chain are assumed to engage in cooperative and non-cooperative games. The current study aims to coordinate a two-level supply chain consisting of a manufacturer and a retailer. This will be achieved using cooperative advertisement along with pricing decisions such that the manufacturer offers a price discount to the retailer and the demand is affected by pricing and advertisement. Cooperative advertisement is a coordinated effort made by all the members of the supply chain to increase the customer demand, in which the retailer does the local advertisement and the manufacturer pays for a portion or all the costs of the retailer advertisement. We consider two models for manufacturer-retailer relation using the game theory: the manufacturer-Stackelberg and the retailer-Stackelberg games with asymmetric power distribution.
Machine summary:
"com A Model for Cooperative Advertising and Pricing Decisions in manufacturer-Retailer Supply Chain with Discount: A Game Theory Approach Abolfazl Kazemia,* and Zohreh Saeedmohammadi a a Faculty of Industrial and Mechanical Engineering, Qazvin Branch, Islamic Azad University, Qazvin, Iran Abstract Coordinating the supply chain is among the most important subjects that is extensively addressed in the related literature.
A review on the literature indicates that several papers studied about vertical cooperative advertising and pricing decisions in a supply chain, which both factors are considerable determinants of market demand and hence profits gained by channel members.
In the same year, Xie and Neyret (2009) examined the coordination between the decisions related to pricing and advertising in a two-level supply chain which included a manufacturer and a retailer.
Using a manufacturer Stackelberg game theoretic framework, he examined the problem of determining the optimal local advertising level, the investment in promoting national brand name recognition, the retail channel selling price, and the direct channel selling price for a two-echelon supply chain.
So, to obtain the equilibrium values, the manufacturer firstly determines the wholesale price, discount percentage, participation rate and national advertisement cost based on the best response function for maximizing its equilibrium profit.
(2012), Vertical cooperative advertising and pricing decisions in a manufacturer–retailer supply chain: A game-theoretic approach, European Journal of Operational Research, Vol. 223, No. 2, PP.
(2006), Coordination of cooperative advertising in a two-level supply chain when manufacturer offers discount, European Journal of Operational Research, Vol. 168, No. 1, PP."