Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints

Name: Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints
Author: Ekici, Ali, Özener, Başak Altan, Özener, Okan Örsan

İsim	Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints
Yazar	Ekici, Ali, Özener, Başak Altan, Özener, Okan Örsan
Basım Tarihi:	2016
Basım Yeri	- Informa Group
Konu	Order size constraints, Pricing, Order consolidation, Nash equilibrium, EOQ, Information asymmetry
Tür	Süreli Yayın
Dil	İngilizce
Dijital	Evet
Yazma	Hayır
Kütüphane:	Özyeğin Üniversitesi
Demirbaş Numarası	1366-588X
Kayıt Numarası	1fb66d61-5377-4913-a72e-86249eda6e84
Lokasyon	Economics, Industrial Engineering
Tarih	2016
Notlar	Due to copyright restrictions, the access to the full text of this article is only available via subscription.
Örnek Metin	In this paper, we study a duopolistic market of suppliers competing for the business of a retailer. The retailer sets the order cycle and quantities from each supplier to minimize its annual costs. Different from other studies in the literature, our work simultaneously considers the order size restriction and the benefit of order consolidation, and shows non-trivial pricing behaviour of the suppliers under different settings. Under asymmetric information setting, we formulate the pricing problem of the preferred supplier as a non-linear programming problem and use Karush–Kuhn–Tucker conditions to find the optimal solution. In general, unless the preferred supplier has high-order size limit, it prefers sharing the market with its competitor when retailer’s demand, benefit of order consolidation or fixed cost of ordering from the preferred supplier is high. We model the symmetric information setting as a two-agent non-zero sum pricing game and establish the equilibrium conditions. We show that a supplier might set a ‘threshold price’ to capture the entire market if its per unit fixed ordering cost is sufficiently small. Finally, we prove that there exists a joint-order Nash equilibrium only if the suppliers set identical prices low enough to make the retailer place full-size orders from both.
DOI	10.1080/00207543.2015.1054451

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Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints

Yazar Ekici, Ali, Özener, Başak Altan, Özener, Okan Örsan

Basım Tarihi 2016

Basım Yeri - Informa Group

Konu Order size constraints, Pricing, Order consolidation, Nash equilibrium, EOQ, Information asymmetry

Tür Süreli Yayın

Dil İngilizce

Dijital Evet

Yazma Hayır

Kütüphane Özyeğin Üniversitesi

Demirbaş Numarası 1366-588X

Kayıt Numarası 1fb66d61-5377-4913-a72e-86249eda6e84

Lokasyon Economics, Industrial Engineering

Tarih 2016

Notlar Due to copyright restrictions, the access to the full text of this article is only available via subscription.

Örnek Metin In this paper, we study a duopolistic market of suppliers competing for the business of a retailer. The retailer sets the order cycle and quantities from each supplier to minimize its annual costs. Different from other studies in the literature, our work simultaneously considers the order size restriction and the benefit of order consolidation, and shows non-trivial pricing behaviour of the suppliers under different settings. Under asymmetric information setting, we formulate the pricing problem of the preferred supplier as a non-linear programming problem and use Karush–Kuhn–Tucker conditions to find the optimal solution. In general, unless the preferred supplier has high-order size limit, it prefers sharing the market with its competitor when retailer’s demand, benefit of order consolidation or fixed cost of ordering from the preferred supplier is high. We model the symmetric information setting as a two-agent non-zero sum pricing game and establish the equilibrium conditions. We show that a supplier might set a ‘threshold price’ to capture the entire market if its per unit fixed ordering cost is sufficiently small. Finally, we prove that there exists a joint-order Nash equilibrium only if the suppliers set identical prices low enough to make the retailer place full-size orders from both.

DOI 10.1080/00207543.2015.1054451