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Pricing and ordering strategies in a two-echelon supply chain under price discount policy: a Stackelberg game approach

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  • Rubi Das
  • Pijus Kanti De
  • Abhijit Barman

Abstract

Supply chain management coordinates different strategies for the production system. The manufacturer requires some incentive schemes to motivate the retailer to change his policy, optimal for the whole system. This paper suggests a discount mechanism by which companies can coordinate their ordering and pricing strategies throughout a supply chain model with a single manufacturer and single retailer. Also, the demand curve is iso-elastic price sensitive. Channel members have decided their selling price and order quantity jointly and independently to maximize the supply chain profit. A coordination mechanism is proposed based on quantity discounts to correlate pricing and ordering strategies simultaneously. The decentralized case is analyzed under the manufacturer-Stackelberg game approach. The result of numerical investigation shows that the suggested discount mechanism has improved the supply chain profit as well as each channel member's profit in comparison with the centralized and decentralized decisions without discount.

Suggested Citation

  • Rubi Das & Pijus Kanti De & Abhijit Barman, 2021. "Pricing and ordering strategies in a two-echelon supply chain under price discount policy: a Stackelberg game approach," Journal of Management Analytics, Taylor & Francis Journals, vol. 8(4), pages 646-672, October.
    • Handle: RePEc:taf:tjmaxx:v:8:y:2021:i:4:p:646-672
    DOI: 10.1080/23270012.2021.1911697
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    Cited by:

    1. Abhijit Barman & Rubi Das & Pijus Kanti De & Shib Sankar Sana, 2021. "Optimal Pricing and Greening Strategy in a Competitive Green Supply Chain: Impact of Government Subsidy and Tax Policy," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    2. Fakheri, Sajjad & Bahrami-Bidoni, Zeynab & Makui, Ahmad & Pishvaee, Mir Saman & Santibanez Gonzalez, Ernesto DR., 2022. "A sustainable competitive supply chain network design for a green product under uncertainty: A case study of Iranian leather industry," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).
    3. Rubi Das & Abhijit Barman & Pijus Kanti De, 2022. "Integration of pricing and inventory decisions of deteriorating item in a decentralized supply chain: a Stackelberg-game approach," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 13(1), pages 479-493, February.
    4. Rubi Das & Abhijit Barman & Balaji Roy & Pijus Kanti De, 2023. "Pricing and greening strategies in a dual-channel supply chain with cost and profit sharing contracts," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(6), pages 5053-5086, June.
    5. Rufeng Wang & Siqi Wang & Shuli Yan, 2021. "Pricing and Coordination Strategies of Dual Channels Considering Consumers’ Channel Preferences," Sustainability, MDPI, vol. 13(20), pages 1-15, October.

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