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Dynamical complexity of pricing and green level for a dyadic supply chain with capital constraint

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  • Chen, Jianxin
  • Zheng, Junhao
  • Zhang, Tonghua
  • Hou, Rui
  • Zhou, Yong-wu

Abstract

In this paper, based on bounded rationality, the dynamic game models are established to study the performance of a dyadic supply chain with one supplier and two competing retailers. According to supply chain practices, capital constraints and greenness issues are taken into consideration. Two financing models are involved respectively, corresponding to two models and scenarios: full trade credit (FTC) and hybrid trade credit (HTC). The equilibrium points of the two models were obtained, and the influence of key parameters such as different decision-making adjustment speeds and trade credit ratios on the local stability of the system was analyzed. Besides, the expected profits of the supplier and two capital-constrained retailers are discussed. It is found that, compared with the adjustable speeds of the two retailers, the supplier’s adjustable speed has a more obvious impact on system stability and expected profits. For the two downstream competitive retailers, the high trade credit ratio leads to the increase in dynamic green levels, wholesale prices, supplier profits, and dynamic pricing of other retailers provided by full trade credit. However, when the market potential is the same, hybrid trade credit may hurt the profits of both retailers.

Suggested Citation

  • Chen, Jianxin & Zheng, Junhao & Zhang, Tonghua & Hou, Rui & Zhou, Yong-wu, 2022. "Dynamical complexity of pricing and green level for a dyadic supply chain with capital constraint," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 195(C), pages 1-21.
    • Handle: RePEc:eee:matcom:v:195:y:2022:i:c:p:1-21
    DOI: 10.1016/j.matcom.2021.12.015
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