Sustainable Supplier’s Equilibrium Discount Strategy under Random Demand

This paper examines a sustainable supplier’s price discount strategy in a competitive environment as it considers building a two-level supply chain system consisting of two suppliers and a single retailer under the condition of uncertain demand, and investigates the impact of the suppliers’ price discount strategy on the retailer’s expected profits. We find that the sustainable supplier’s expected profit increases as the price discount increases. When only the sustainable supplier offers a discount, the retailer’s purchasing cost will increase with the degree of the discount; when both suppliers provide a discount, the sustainable supplier’s expected profit decreases as the price discount increases, while the retailer’s purchasing cost will decrease.