Title: Dynamic pricing policies in a two-echelon supply chain
Authors: Xu, Ke (徐珂)
Abstract: The target of the thesis is to investigate the dynamic pricing policies in a two-echelon
supply chain in the presence of dynamic factors such as cost learning, demand
saturation and reference price effects. We present Stackelberg differential games in a
disintegrate channel consisting of a manufacturer and her independent retailer.
Employing the optimal control and game theories, we derive the equilibrium pricing
strategies of the manufacturer and the retailer and investigate the impacts of such
dynamic factors on the channel efficiency. (l) First, we focus on the cost learning
effect in the supply side. In the open-loop case where the manufacturer commits
about the wholesale price preliminarily, a short-term price strategy is suggested to be
optimal. Although each member benefits from a higher cost learning effect, the
channel inefficiency is deteriorated. We highlight that, to mitigate the channel
inefficiency, the manufacturer could either employ multiple competing retailers or
renegotiate with the retailer about the wholesale price frequently. (2) Then we focus
on the reference price effect in the demand side, which describes how past price
affects current demand of the frequently purchased product. Comparing with the
integrated channel, we indicate that price penetration is more preferable than price
skimming regarding to a certain group of customers. Another finding is, the channel
efficiency is always lower when the consumers are more sensitive to the gap between
the real market price and reference price or have strong loyalty to the product. (3)
What's more, we consider the joint dynamic effects in both demand (demand
saturation) and supply (cost learning) sides in the stochastic supply chain. In the
presence of decreasing uncertainty, the result demonstrates that demand uncertainty
pushes up the retail price. Furthermore, numerical study illustrates that a deterministic
pricing strategy could be better off than a stochastic pricing strategy in the
decentralized channel. This counterintuitive result could be interpreted as that, the
deterministic policy leads to underpricing the product, which exactly counteracts the
overpricing problem due to the well known double marginalization effect.
Notes: CityU Call Number: HD38.5 .X77 2011; 8, 108 leaves : ill. 30 cm.; Thesis (Ph.D.)--City University of Hong Kong, 2011.; Includes bibliographical references (leaves 103-108)
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