Article: Optimal pricing decisions in a two echelon green/non-green resilient supply chain for substitute and complementary products considering disruption risk Journal: International Journal of Industrial and Systems Engineering (IJISE) 2024 Vol.46 No.3 pp.355 - 389 Abstract: In this paper, a pricing model is presented for substitute and complementary products, where the manufacturers 2 and 3 products are alternatives while manufacturer 1 produces a complimentary product for the others. The first manufacturer produces one green product that increases the tendency of customers for buying this product and its substitutes which brings more costs to the supply chain. Hence, the relationship between the manufacturers and the distributor is modelled by both cooperative and non-cooperative games. In the first model, the whole system works integrally, whereas, in the non-cooperative game, the model is analysed by the Stackelberg equilibrium where the manufacturers have disregarded leaders and the distributor is a follower. Moreover, potential disruption risks between the manufacturer and the distributor are considered in the current paper which means only a percentage of the distributor's order quantity can be fulfilled by the manufacturer during disruption conditions. The optimal prices and the green degree for the products have been achieved parametrically using KKT conditions and finally, a numerical example is presented to describe the model. Inderscience Publishers - linking academia, business and industry through research

Title: Optimal pricing decisions in a two echelon green/non-green resilient supply chain for substitute and complementary products considering disruption risk

Authors: Ashkan Mohsenzadeh Ledari; Alireza Arshadi Khamseh

Addresses: Department of Industrial Engineering, University of Science and Technology of Mazandaran, Behshahr, Iran ' Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, Tehran, Iran

Abstract: In this paper, a pricing model is presented for substitute and complementary products, where the manufacturers 2 and 3 products are alternatives while manufacturer 1 produces a complimentary product for the others. The first manufacturer produces one green product that increases the tendency of customers for buying this product and its substitutes which brings more costs to the supply chain. Hence, the relationship between the manufacturers and the distributor is modelled by both cooperative and non-cooperative games. In the first model, the whole system works integrally, whereas, in the non-cooperative game, the model is analysed by the Stackelberg equilibrium where the manufacturers have disregarded leaders and the distributor is a follower. Moreover, potential disruption risks between the manufacturer and the distributor are considered in the current paper which means only a percentage of the distributor's order quantity can be fulfilled by the manufacturer during disruption conditions. The optimal prices and the green degree for the products have been achieved parametrically using KKT conditions and finally, a numerical example is presented to describe the model.

Keywords: green supply chain; GSC; pricing; green product; substitute product; complementary product; game theory; disruption risk.

DOI: 10.1504/IJISE.2024.137959

International Journal of Industrial and Systems Engineering, 2024 Vol.46 No.3, pp.355 - 389

Received: 07 Mar 2022
Accepted: 22 Jun 2022
Published online: 12 Apr 2024 *

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Title: Optimal pricing decisions in a two echelon green/non-green resilient supply chain for substitute and complementary products considering disruption risk

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