https://scholars.lib.ntu.edu.tw/handle/123456789/612143
Title: | Competitive pricing of substitute products under supply disruption | Authors: | Gupta V. Ivanov D. TSAN MING CHOI |
Keywords: | Competition; COVID-19; Disruption; Game theory; Multiple products; Pricing; Product substitution; Stackelberg game; Supply chain | Issue Date: | 2021 | Publisher: | Elsevier Ltd | Journal Volume: | 101 | Source: | Omega (United Kingdom) | Abstract: | There has been an increased interest in optimizing pricing and sourcing decisions under supplier competition with supply disruptions. In this paper, we conduct an analytical game-theoretical study to examine the effects of supply capacity disruption timing on pricing decisions for substitute products in a two-supplier one-retailer supply chain setting. We investigate whether the timing of a disruption may significantly impact the optimal pricing strategy of the retailer. We derive the optimal pricing strategy and ordering levels with both disruption timing and product substitution. By exploring both the Nash and Stackelberg games, we find that the order quantity with the disrupted supplier depends on price leadership and it tends to increase when the non-disrupted supplier is the leader. Moreover, the equilibrium market retail prices are higher under higher levels of disruption for the Nash game, compared to the Stackelberg game. We also uncover that the non-disrupted supplier can always charge the highest wholesale price if a disruption occurs before orders are received. This highlights the critical role of order timing. The insights can help operations managers to proper design risk mitigation ordering strategies and re-design the supply contracts in the presence of product substitution under supply disruptions. ? 2020 Elsevier Ltd |
URI: | https://www.scopus.com/inward/record.uri?eid=2-s2.0-85085663405&doi=10.1016%2fj.omega.2020.102279&partnerID=40&md5=1e7ccc44cff00c058a5cd485442d1c69 https://scholars.lib.ntu.edu.tw/handle/123456789/612143 |
DOI: | 10.1016/j.omega.2020.102279 |
Appears in Collections: | 工商管理學系 |
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.