Optimal Dynamic Pricing for Assembly Product Supply Chain

Yufang Chen; Yong Luo

doi:doi:10.11648/j.ajomis.20170202.14

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Optimal Dynamic Pricing for Assembly Product Supply Chain

Yufang Chen, Yong Luo

Published in American Journal of Operations Management and Information Systems (Volume 2, Issue 2)

Received: 19 December 2016 Accepted: 3 January 2017 Published: 25 January 2017

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Abstract

To study the optimal decisions of suppliers and assemblers in an assembly product supply chain which contains two generations of product. With updated components, a dynamic assembly product supply chain model whose demand is time-varying was built based on product diffusion model. The optimal dynamic pricing decisions and profits of all entities in the supply chain were acquired through theoretical analysis and simulation based on Stackelberg and Nash game. Some insights have been derived: The profits of two assemblers are increased, while two suppliers’ profits are relatively reduced if the two assemblers cooperate with each other. The growth rates of suppliers’ wholesale prices of two generations of products are opposite, and those of assemblers’ retail prices are also opposite whether two assemblers are cooperative or not. With cooperation, the ranges of wholesale prices changing over time are higher, while the ranges of assemblers’ retail prices changing over time are lower than those without cooperation.

Published in	American Journal of Operations Management and Information Systems (Volume 2, Issue 2)
DOI	10.11648/j.ajomis.20170202.14
Page(s)	54-71
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Components Update, Assembly Product Supply Chain, Stackelberg Game, Optimal Pricing

References

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Yufang Chen, Yong Luo. (2017). Optimal Dynamic Pricing for Assembly Product Supply Chain. American Journal of Operations Management and Information Systems, 2(2), 54-71. https://doi.org/10.11648/j.ajomis.20170202.14

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ACS Style

Yufang Chen; Yong Luo. Optimal Dynamic Pricing for Assembly Product Supply Chain. Am. J. Oper. Manag. Inf. Syst. 2017, 2(2), 54-71. doi: 10.11648/j.ajomis.20170202.14

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AMA Style

Yufang Chen, Yong Luo. Optimal Dynamic Pricing for Assembly Product Supply Chain. Am J Oper Manag Inf Syst. 2017;2(2):54-71. doi: 10.11648/j.ajomis.20170202.14

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@article{10.11648/j.ajomis.20170202.14,
  author = {Yufang Chen and Yong Luo},
  title = {Optimal Dynamic Pricing for Assembly Product Supply Chain},
  journal = {American Journal of Operations Management and Information Systems},
  volume = {2},
  number = {2},
  pages = {54-71},
  doi = {10.11648/j.ajomis.20170202.14},
  url = {https://doi.org/10.11648/j.ajomis.20170202.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajomis.20170202.14},
  abstract = {To study the optimal decisions of suppliers and assemblers in an assembly product supply chain which contains two generations of product. With updated components, a dynamic assembly product supply chain model whose demand is time-varying was built based on product diffusion model. The optimal dynamic pricing decisions and profits of all entities in the supply chain were acquired through theoretical analysis and simulation based on Stackelberg and Nash game. Some insights have been derived: The profits of two assemblers are increased, while two suppliers’ profits are relatively reduced if the two assemblers cooperate with each other. The growth rates of suppliers’ wholesale prices of two generations of products are opposite, and those of assemblers’ retail prices are also opposite whether two assemblers are cooperative or not. With cooperation, the ranges of wholesale prices changing over time are higher, while the ranges of assemblers’ retail prices changing over time are lower than those without cooperation.},
 year = {2017}
}

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TY  - JOUR
T1  - Optimal Dynamic Pricing for Assembly Product Supply Chain
AU  - Yufang Chen
AU  - Yong Luo
Y1  - 2017/01/25
PY  - 2017
N1  - https://doi.org/10.11648/j.ajomis.20170202.14
DO  - 10.11648/j.ajomis.20170202.14
T2  - American Journal of Operations Management and Information Systems
JF  - American Journal of Operations Management and Information Systems
JO  - American Journal of Operations Management and Information Systems
SP  - 54
EP  - 71
PB  - Science Publishing Group
SN  - 2578-8310
UR  - https://doi.org/10.11648/j.ajomis.20170202.14
AB  - To study the optimal decisions of suppliers and assemblers in an assembly product supply chain which contains two generations of product. With updated components, a dynamic assembly product supply chain model whose demand is time-varying was built based on product diffusion model. The optimal dynamic pricing decisions and profits of all entities in the supply chain were acquired through theoretical analysis and simulation based on Stackelberg and Nash game. Some insights have been derived: The profits of two assemblers are increased, while two suppliers’ profits are relatively reduced if the two assemblers cooperate with each other. The growth rates of suppliers’ wholesale prices of two generations of products are opposite, and those of assemblers’ retail prices are also opposite whether two assemblers are cooperative or not. With cooperation, the ranges of wholesale prices changing over time are higher, while the ranges of assemblers’ retail prices changing over time are lower than those without cooperation.
VL  - 2
IS  - 2
ER  -

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Author Information

Yufang Chen

School of Electrical Engineering, Zhengzhou University, Zhengzhou, China
Yong Luo

Dept. Industrial & Manufacturing Eng., University of Wisconsin, Milwaukee, USA

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APA Style

Yufang Chen, Yong Luo. (2017). Optimal Dynamic Pricing for Assembly Product Supply Chain. American Journal of Operations Management and Information Systems, 2(2), 54-71. https://doi.org/10.11648/j.ajomis.20170202.14

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ACS Style

Yufang Chen; Yong Luo. Optimal Dynamic Pricing for Assembly Product Supply Chain. Am. J. Oper. Manag. Inf. Syst. 2017, 2(2), 54-71. doi: 10.11648/j.ajomis.20170202.14

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AMA Style

Yufang Chen, Yong Luo. Optimal Dynamic Pricing for Assembly Product Supply Chain. Am J Oper Manag Inf Syst. 2017;2(2):54-71. doi: 10.11648/j.ajomis.20170202.14

Copy | Download

@article{10.11648/j.ajomis.20170202.14,
  author = {Yufang Chen and Yong Luo},
  title = {Optimal Dynamic Pricing for Assembly Product Supply Chain},
  journal = {American Journal of Operations Management and Information Systems},
  volume = {2},
  number = {2},
  pages = {54-71},
  doi = {10.11648/j.ajomis.20170202.14},
  url = {https://doi.org/10.11648/j.ajomis.20170202.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajomis.20170202.14},
  abstract = {To study the optimal decisions of suppliers and assemblers in an assembly product supply chain which contains two generations of product. With updated components, a dynamic assembly product supply chain model whose demand is time-varying was built based on product diffusion model. The optimal dynamic pricing decisions and profits of all entities in the supply chain were acquired through theoretical analysis and simulation based on Stackelberg and Nash game. Some insights have been derived: The profits of two assemblers are increased, while two suppliers’ profits are relatively reduced if the two assemblers cooperate with each other. The growth rates of suppliers’ wholesale prices of two generations of products are opposite, and those of assemblers’ retail prices are also opposite whether two assemblers are cooperative or not. With cooperation, the ranges of wholesale prices changing over time are higher, while the ranges of assemblers’ retail prices changing over time are lower than those without cooperation.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Optimal Dynamic Pricing for Assembly Product Supply Chain
AU  - Yufang Chen
AU  - Yong Luo
Y1  - 2017/01/25
PY  - 2017
N1  - https://doi.org/10.11648/j.ajomis.20170202.14
DO  - 10.11648/j.ajomis.20170202.14
T2  - American Journal of Operations Management and Information Systems
JF  - American Journal of Operations Management and Information Systems
JO  - American Journal of Operations Management and Information Systems
SP  - 54
EP  - 71
PB  - Science Publishing Group
SN  - 2578-8310
UR  - https://doi.org/10.11648/j.ajomis.20170202.14
AB  - To study the optimal decisions of suppliers and assemblers in an assembly product supply chain which contains two generations of product. With updated components, a dynamic assembly product supply chain model whose demand is time-varying was built based on product diffusion model. The optimal dynamic pricing decisions and profits of all entities in the supply chain were acquired through theoretical analysis and simulation based on Stackelberg and Nash game. Some insights have been derived: The profits of two assemblers are increased, while two suppliers’ profits are relatively reduced if the two assemblers cooperate with each other. The growth rates of suppliers’ wholesale prices of two generations of products are opposite, and those of assemblers’ retail prices are also opposite whether two assemblers are cooperative or not. With cooperation, the ranges of wholesale prices changing over time are higher, while the ranges of assemblers’ retail prices changing over time are lower than those without cooperation.
VL  - 2
IS  - 2
ER  -

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