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Strategic Wholesale Pricing and Commonality Strategy in a Supply Chain with Quality Segmentation
Joint Authors
Xiao, Tiaojun
Xu, Tiantian
Tian, Chen
Source
Mathematical Problems in Engineering
Issue
Vol. 2015, Issue 2015 (31 Dec. 2015), pp.1-13, 13 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2015-04-06
Country of Publication
Egypt
No. of Pages
13
Main Subjects
Abstract EN
We develop two game models of a one-supplier and one-manufacturer supply chain to investigate the supplier’s strategic wholesale pricing decision and the manufacturer’s commonality strategy.
The manufacturer has three commonality strategies for the high-end and low-end products: common high-quality component, common low-quality component, and dedicated components.
We consider both wholesale price first scenario and commonality strategy first scenario.
Under the wholesale price first scenario, we identify the range of each commonality strategy and find that (i) the common low-quality component strategy is harmful to the supplier; (ii) if the quality of low-quality component and the unit production cost of high-quality component are sufficiently low, the supplier induces the common high-quality component strategy by strategically decreasing the unit wholesale price of high-quality component, while if they are sufficiently high, the supplier induces the dedicated components strategy by increasing the unit wholesale price of high-quality component and decreasing that of low-quality one.
Under the commonality strategy first scenario, the common low-quality component strategy may exist.
By comparing the two scenarios, we find that (i) if the unit production cost of low-quality component is medium, the equilibrium outcomes under both scenarios are identical; (ii) there exists a first-mover advantage for the two players.
American Psychological Association (APA)
Xu, Tiantian& Xiao, Tiaojun& Tian, Chen. 2015. Strategic Wholesale Pricing and Commonality Strategy in a Supply Chain with Quality Segmentation. Mathematical Problems in Engineering،Vol. 2015, no. 2015, pp.1-13.
https://search.emarefa.net/detail/BIM-1073515
Modern Language Association (MLA)
Xu, Tiantian…[et al.]. Strategic Wholesale Pricing and Commonality Strategy in a Supply Chain with Quality Segmentation. Mathematical Problems in Engineering No. 2015 (2015), pp.1-13.
https://search.emarefa.net/detail/BIM-1073515
American Medical Association (AMA)
Xu, Tiantian& Xiao, Tiaojun& Tian, Chen. Strategic Wholesale Pricing and Commonality Strategy in a Supply Chain with Quality Segmentation. Mathematical Problems in Engineering. 2015. Vol. 2015, no. 2015, pp.1-13.
https://search.emarefa.net/detail/BIM-1073515
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1073515