Pricing Decisions of a Two-Echelon Supply Chain in Fuzzy Environment

Abstract EN

Pricing decisions of a two-echelon supply chain with one manufacturer and duopolistic retailers in fuzzy environment are considered in this paper.

The manufacturer produces a product and sells it to the two retailers, who in turn retail it to end customers.

The fuzziness is associated with the customers’ demand and the manufacturing cost.

The purpose of this paper is to analyze the effect of two retailers’ different pricing strategies on the optimal pricing decisions of the manufacturer and the two retailers themselves in MS Game scenario.

As a reference model, the centralized decision scenario is also considered.

The closed-form optimal pricing decisions of the manufacturer and the two retailers are derived in the above decision scenarios.

Some insights into how pricing decisions vary with decision scenarios and the two retailers’ pricing strategies in fuzzy environment are also investigated, which can serve as the basis for empirical study in the future.