Advanced Search
MyIDEAS: Login

Pricing and effort investment decisions of a supply chain considering customer satisfaction

Contents:

Author Info

  • Tiaojun Xiao
  • Xiulian Cai
  • Jiao Jin
Registered author(s):

    Abstract

    This paper develops a two-period game model of a supply chain consisting of one manufacturer and one retailer to investigate the pricing and effort investment decisions when customer satisfaction is considered. We assume that both players are risk averse and divide the retailer's effort into short-term selling effort and customer-satisfying (CS) effort, where short-term selling effort only influences current demand and CS effort only influences future demand in the next period. We find that the pricing and effort investment decisions and the certainty equivalents of the random present profits largely depend on risk sensitivity, demand uncertainty, correlation coefficient between the errors of the market scales in two periods, discount factor and subsidy rate. When the patience/discount factor or the CS effort sensitivity of the retailer increases, the retailer will increase CS effort investment. The retail price and effort investments of the retailer and the unit wholesale price of the manufacturer are decreasing in correlation coefficient due to a higher risk cost.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.inderscience.com/link.php?id=29794
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Applied Management Science.

    Volume (Year): 2 (2010)
    Issue (Month): 1 ()
    Pages: 1-19

    as in new window
    Handle: RePEc:ids:injams:v:2:y:2010:i:1:p:1-19

    Contact details of provider:
    Web page: http://www.inderscience.com/browse/index.php?journalID=286

    Related research

    Keywords: supply chain management; SCM; customer satisfaction; risk aversion; effort investment; game theory; pricing decisions; retailing; manufacturing; short-term selling; patience-discount factors; subsidy rates; wholesale prices; management science; modelling.;

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ids:injams:v:2:y:2010:i:1:p:1-19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Graham Langley).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.