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Optimal pricing and order policies with B2B product returns for fashion products

Author

Listed:
  • Li, Yongjian
  • Wei, Cansheng
  • Cai, Xiaoqiang

Abstract

We study optimal pricing and order policies in supply chain management of fashion products (e.g., a fashion apparel category) with consideration of product returns between supply chain partners (B2B). In order to study channel performance and optimal policies, two stochastic models for centralized channel and decentralized channel are, respectively, developed to handle new fashion and off-season product sales. In the centralized channel, closed-form solutions for optimal order and pricing decisions are proposed for new fashion products. Further, in a decentralized channel, the Stackelberg game model is proposed to derive the optimal Stackelberg equilibrium solution, and then a buy-back contract is designed to coordinate the channel. We also perform parameter analysis on performance of the two channel models. Numerical analysis is finally presented to validate our theoretical results and compare channel performances.

Suggested Citation

  • Li, Yongjian & Wei, Cansheng & Cai, Xiaoqiang, 2012. "Optimal pricing and order policies with B2B product returns for fashion products," International Journal of Production Economics, Elsevier, vol. 135(2), pages 637-646.
  • Handle: RePEc:eee:proeco:v:135:y:2012:i:2:p:637-646
    DOI: 10.1016/j.ijpe.2011.05.004
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    References listed on IDEAS

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    Cited by:

    1. Longfei He & Daozhi Zhao & Liangjie Xia, 2015. "Game Theoretic Analysis of Carbon Emission Abatement in Fashion Supply Chains Considering Vertical Incentives and Channel Structures," Sustainability, MDPI, Open Access Journal, vol. 7(4), pages 1-30, April.
    2. Zhi-Hua Hu & Qing Li & Xian-Juan Chen & Yan-Feng Wang, 2014. "Sustainable Rent-Based Closed-Loop Supply Chain for Fashion Products," Sustainability, MDPI, Open Access Journal, vol. 6(10), pages 1-26, October.
    3. Zhou, Erfeng & Zhang, Juzhi & Gou, Qinglong & Liang, Liang, 2015. "A two period pricing model for new fashion style launching strategy," International Journal of Production Economics, Elsevier, vol. 160(C), pages 144-156.
    4. repec:spr:annopr:v:237:y:2016:i:1:d:10.1007_s10479-013-1453-x is not listed on IDEAS
    5. repec:eee:proeco:v:193:y:2017:i:c:p:422-436 is not listed on IDEAS
    6. Zhang, Linghong & Wang, Jingguo, 2017. "Coordination of the traditional and the online channels for a short-life-cycle product," European Journal of Operational Research, Elsevier, vol. 258(2), pages 639-651.

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