Title: Pricing strategy of competing retailers in a two layer supply chain under nonlinear stochastic demand

Authors: Totan Garai; Arpita Paul; Dipankar Chakraborty

Addresses: Department of Mathematics, Syamsundar College, Shyamsundar, Purba Bardhaman – 713424, West Bengal, India ' Department of Mathematics, Dinhata College, Cooch Behar – 736135, West Bengal, India ' Department of Mathematics, Heritage Institute of Technology, Anandapur, Kolkata – 700107, West Bengal, India

Abstract: This paper develops mechanisms to deal the strategic issue that arises in a two-echelon closed-loop supply chain comprising of one manufacturer and two competing retailers. The chain works under stochastic nonlinear demand. Here the manufacturer works as the supplier and the retailers compete with each other on the basis of their retail price. The prime objective is to investigate a news-vendor model to govern the optimal order quantity. A buyback contract between the manufacturer and retailer has been considered and scenario of shortage has also been contemplated. The profit functions of manufacturer and two retailers are analysed following centralised approach. A numerical example is given to illustrate the theoretical results. Computational results show that it is always beneficial in integrated system for the members of the chain.

Keywords: pricing; news vendor; stochastic nonlinear demand; supply chain.

DOI: 10.1504/IJMOR.2022.127757

International Journal of Mathematics in Operational Research, 2022 Vol.23 No.4, pp.528 - 544

Received: 18 Jul 2021
Accepted: 12 Nov 2021
Published online: 15 Dec 2022 *

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