Showing 17 results for Pricing
Ali Habibi Badrabadi , Mohammad Jafar Tarokh,
Volume 21, Issue 4 (12-2010)
Abstract
Response time is one of the critical web service quality dimensions. It refers to how long it takes that a web service responds to request of a user. In order to manage the response time, pricing schemes can work as an efficient access control mechanism. In this paper, we study competition between two providers offering functionally same web services where there is a monopoly service provider. The monopoly offers a service that is complementary to their services. Each provider needs to decide a service level (L or H) and a corresponding price for the selected service level to meet the service level guarantee. We construct a Stackelberg game and benefit from queuing theory concept to propose a model that can examine strategic choices of the providers .
Mohammad Azari Khojasteh, Mohammad Reza Amin-Naseri, Isa Nakhai Kamal Abadi,
Volume 24, Issue 4 (12-2013)
Abstract
We model a real-world case problem as a price competition model between two leader-follower supply chains that each of them consists of one manufacturer and one retailer. T he manufacturer produces partially differentiated products and sells to market through his retailer. The retailer sells the products of manufacturer to market by adding some values to the product and gains margin as a fraction of the all income of selling products. We use a two-stage Stackelberg game model to investigate the dynamics between these supply chains and obtain the optimal prices of products. We explore the effect of varying the level of substitutability coefficient of two products on the profits of the leader and follower supply chains and derive some managerial implications. We find that the follower supply chain has an advantage when the products are highly substitutable. Also, we study the sensitivity analysis of the fraction of requested margin by retailer on the profit of supply chains.
Parinaz Esmaeili, Morteza Rasti-Barzoki, Seyed Reza Hejazi,
Volume 27, Issue 1 (3-2016)
Abstract
Pricing and advertising are two important marketing strategies in the supply chain management which lead to customer demand’s increase and therefore higher profit for members of supply chains. This paper considers advertising, and pricing decisions simultaneously for a three-level supply chain with one supplier, one manufacturer and one retailer. The amount of market demand is influenced by pricing and advertising. In this paper, three well-known approaches in the game theory including the Nash, Stackelberg and Cooperative games are exploited to study the effects of pricing and advertising decisions on the supply chain. Using these approaches, we identify optimal decisions in each case for the supplier, the manufacturer and the retailer. Also, we compare the outcomes decisions among the mentioned games. The results show that, the Cooperative and the Nash games have the highest and lowest advertising expenditure, respectively. The price level in the Nash game is more than the Stackelberg game for all three levels, and the retailer price in the Stackelberg and Cooperative games are equal. The system has the highest profit in the Cooperative game. Finally, the Nash bargaining model will be presented and explored to investigate the possibilities for profit sharing.
Nita Shah, Chetan Vaghela,
Volume 28, Issue 2 (6-2017)
Abstract
Abstract
In this research, an integrated inventory model for non-instantaneous deteriorating items is analyzed when demand is sensitive to changes in price. The price used in this research is a time-dependent function of the initial selling price and the discount rate. To control the deterioration rate of items at the storage facility, investment in preservation technology is incorporated. To provide a general framework to the model, an arbitrary holding cost rate is used. Toward the end of the paper, a numerical case is given to approve the model and the impacts of the key parameters of the model are studied by sensitivity analysis to deduce managerial insights.
Parinaz Esmaeili, Seyed Reza Hejazi, Morteza Rasti-Barzoki,
Volume 28, Issue 2 (6-2017)
Abstract
This paper considers the advertising, pricing, and service decisions simultaneously to coordinate the supply chain with a manufacturer and a retailer. The amount of market demand is influenced by advertising, pricing and service decisions. In this paper, three well-known approaches to the game theory, including the Nash, the Stackelberg-retailer, and the cooperative game are exploited to study the effects of these policies on the supply chain. Using these approaches, we identify optimal strategies in each case for the manufacturer and the retailer. Then, we will compare the outcomes of each strategy thus developed. The results show that, compared with the Nash game, the Stackelberg-retailer game yields higher profits for the retailer, the manufacturer, and the whole system. The cooperative game yields the highest profits. Finally, the Nash bargaining model will be presented and explored to investigate the possibilities for profit sharing.
Amin Saghaeeian, Reza Ramezanian,
Volume 28, Issue 4 (11-2017)
Abstract
This study considers pricing, production and transportation decisions in a Stackelberg game between three-stage, multi-product, multi-source and single-period supply chains called leader and follower. These chains consist of; manufacturers, distribution centers (DCs) and retailers. Competition type is horizontal and SC vs. SC. The retailers in two chains try to maximize their profit through pricing of products in different markets and regarding the transportation and production costs. A bi-level nonlinear programming model is formulated in order to represent the Stackelberg game. Pricing decisions are based on discrimination pricing rules, where we can put different prices in different markets. After that the model is reduced to single-level nonlinear programming model by replacing Karush-Kuhn-Tucker conditions for the lower level (follower) problem. Finally, a numerical example is solved in order to analyze the sensitivity of effective parameters on price and profit.
Arash Khosravi, Seyed Reza Hejazi, Shahab Sadri,
Volume 28, Issue 4 (11-2017)
Abstract
Managing income is a considerable dimension in supply chain management in current economic atmosphere. Real world situation makes it inevitable not to design or redesign supply chain. Redesign will take place as costs increase or new services for customers’ new demands should be provided. Pricing is an important fragment of Supply chain due to two reasons: first, represents revenue based each product and second, based on supply-demand relations enables Supply chain to provide demands by making suitable changes in facilities and their capacities. In this study, Benders decomposition approach used to solve multi-product, multi-echelon and multi-period supply chain network redesign including price-sensitive customers.
Sahebe Esfandiari, Hamid Mashreghi, Saeed Emami,
Volume 30, Issue 2 (6-2019)
Abstract
We study the problem of order acceptance, scheduling and pricing (OASP) in parallel machine environment. Each order is characterized by due date, release date, deadline, controllable processing time, sequence dependent set up time and price in MTO system. We present a MILP formulation to maximize the net profit. Then under joint optimization approach, the pricing decisions set for unrelated parallel machine environment. The results show that the basic developed problem can solve the scheduling decisions based on different levels of products’ priced. Thus the problem solves these two categories of decisions simultaneously. Moreover, the changes of accepted orders in pricing levels can be analyzed regarding its dependency to price elasticity of items for future research.
Seyyed-Mahdi Hosseini-Motlagh, Mina Nouri-Harzvili, Roza Zirakpourdehkordi,
Volume 30, Issue 3 (9-2019)
Abstract
Ali Borumand, Morteza Rasti-Barzoki,
Volume 30, Issue 3 (9-2019)
Abstract
In this paper, greening, pricing, and advertising policies in a supply chain will be examined with government intervention. The supply chain has two members. First, a manufacturer seeking to determine the wholesale price and the greening level and second, a retailer that has to determine the advertising cost and the retail price. The government is trying to encourage the manufacturer to green the production using subsidies. Using the game theory, at first, the demand function and the profit functions of both members are introduced, then in a dynamic game, their Stackelberg equilibrium is calculated. Sensitivity and parameter analysis are made to more illustration of the problem. We found the supply chain profit function behavior and results show that if the sensitivity of demand-price is less than a specific value, the manufacturer will not participate in greening policies.
Hanieh Adabi, Hamid Mashreghi,
Volume 30, Issue 4 (12-2019)
Abstract
In this research, we analyze a supply chain involving two competing manufacturers that sells their product through two common competing retailers. The manufacturers’ products are the same but with different brand in market. The retailers face stochastic demand where demand is a decreasing function of price with additive uncertain part. Manufacturers compete on supplying orders where retailers compete on selling price. Each manufacturer set wholesale price contract with retailers similarly. We examine supply chain coordination with wholesale price contract under competition and demand uncertainty. The analytical results show that under coordination condition, manufacturers do not obtain any positive profit and consequently the retailers intend to increase wholesale prices. On the other hand, manufacturers can increase wholesale prices until the retailers’ profit becomes zero. Hence, with a numerical study for actual cases, it is found that changing demand sensitivity and competition intensity affect the optimal decisions of ordering and pricing. Moreover, increasing in competition sensitivity, increase the supply chains’ efficiency, stocking level and selling price. The concluding remarks show that further investigation is required for possibility of coordination under competition by other contractual mechanisms.
Saeed Dehnavi, Ahmad Sadegheih,
Volume 31, Issue 1 (3-2020)
Abstract
In this paper, an integrated mathematical model of the dynamic cell formation and production planning, considering the pricing and advertising decision is proposed. This paper puts emphasis on the effect of demand aspects (e.g., pricing and advertising decisions) along with the supply aspects (e.g., reconfiguration, inventory, backorder and outsourcing decisions) in developed model. Due to imprecise and fuzzy nature of input data such as unit costs, capacities and processing times in practice, a fuzzy multi-objective programming model is proposed to determine the optimal demand and supply variables simultaneously. For this purpose, a fuzzy goal programming method is used to solve the equivalent defuzzified multi-objective model. The objective functions are to maximize the total profit for firm and maximize the utilization rate of machine capacity. The proposed model and solution method is verified by a numerical example.
Tahere Hashemi, Ebrahim Teimoury, Farnaz Barzinpour,
Volume 31, Issue 3 (9-2020)
Abstract
Retailers selling fresh products often encounter unsold inventory remains at the end of each period. The leftover product has a lower perceived quality than the new product. Therefore, retailers try to influence consumers’ preferences through price differentiation that leads to an internal competition based on product age and prices. This paper addresses the pricing and inventory control problem for fresh products to capture the influence of this competition on the supply chain members’ decisions and profits. A new coordination model based on a return policy with the revenue and cost-sharing contract is developed to improve the profits of independent supply chain members. The supply chain consists of one supplier and one retailer, where consumers are sensitive to the product’s retail price and freshness degree. Firstly, the retailer’s optimal decisions are derived in a decentralized decision-making structure. Then a centralized approach is used to optimize the supply chain decisions from the whole supply chain viewpoint. Eventually, a new coordination contract is designed to convince the members to participate in the coordination model. Numerical examples are carried out to compare the performance of different decision-making approaches. Our findings indicate that the proposed contract can coordinate the supply chain effectively. Furthermore, the coordinated decision-making model is more profitable and beneficial for the whole supply chain compared to the decentralized one. The results also demonstrate that when consumers are more sensitive to freshness, the simultaneous sale of multiple-aged products at different prices is more profitable.
Sujata Saha, Tripti Chakrabarti,
Volume 32, Issue 3 (9-2021)
Abstract
This paper aims to frame a two-player supply chain model with a production system's reliability influenced products’ defection rate. Upon generating and inspecting the products, the producer reworks the defectives and sells the perfect and reworked items to a retailer providing him free products' delivery. The retailer stores both types of commodities in the respective showrooms of finite capacities and keeps the excess conforming products in a leased warehouse. Eventually, the formulation of these two partners' profit functions performed, and a numerical illustration demonstrates this model's applicability. Results shows, hiring a storehouse is profitable for the retailer and the deterioration of the production system’s reliability impacts adversely on the manufacturer's profit.
Hojjat Pourfereidouni, Hasan Hosseini-Nasab,
Volume 34, Issue 2 (6-2023)
Abstract
This paper proposes a data-driven method, using Artificial Neural Networks, to price financial options and compute volatilities, which speeds up the corresponding numerical methods. Prospects of the Stock Market are priced by the Black Scholes model, with the difference that the volatility is considered stochastic. So, we propose an innovative hybrid method to forecast the volatility and returns in Stock Market indices, which declare a model with a generalized autoregressive conditional heteroscedasticity framework. In addition, this research analyzes the impact of COVID-19 on the option, return, and volatility of the stock market indices. It also incorporates the long short-term memory network with a traditional artificial neural network and COVID-19 to generate better volatility and option pricing forecasts. We appraise the models' performance using the root second-order quadratic function means of the out-of-sample returns powers. The results illustrate that the autoregressive conditional heteroscedasticity forecasts can serve as informative features to significantly increase the predictive power of the neural network model. Integrating the long short-term memory and COVID-19 is an effective approach to construct proper neural network structures to boost prediction performance. Finally, we interpret the sensitivity of option prices concerning the market or model parameters, which are essential in practice.
Seyed Mahdi Aghazadeh, Hamid Farvaresh,
Volume 34, Issue 4 (12-2023)
Abstract
The growing online marketplace has opened a plethora of opportunities for businesses across various industries. Manufacturers, seeking to bypass intermediaries and directly reach end-users, have been increasingly adopting online sales channels in addition to their traditional retail sales. A key challenge, however, lies in determining optimal pricing strategies and advertising investments for both manufacturers and retailers while considering various constraints. This study contemplates a two-echelon supply chain model involving one manufacturer and two retailers. The manufacturer sells its product both through retailers (offline channel) and directly to consumers via an online channel. The model features both global and local advertising. The influence of global advertising is realized through distinct advertising channels, each with a unique impact on demand. To further motivate retailers, the manufacturer contributes to the cost of local advertising. In response to these challenges, this research formulates a bi-level model and employs the concept of Variational Inequalities to solve it. The model also contends with production capacity and budget constraints, leading to a Generalized Nash-Stackelberg game. The validity of the model and the efficacy of the solution method are assessed through numerical experiments performed. Finally, a set of valuable managerial insights are provided.
Hamed Salehi Mourkani, Anwar Mahmoodi, Isa Nakhai Kamalabadi,
Volume 35, Issue 3 (9-2024)
Abstract
This research investigated the problem of joint inventory control and pricing for non-instantaneous deteriorating products; while, the quantity dependent trade credit is allowed. It was observed here that the buyer order amount is equal or more than the amount specified by the seller. The Shortage was not permitted in the system. It was aimed in present study to find a procedure for achieving the optimal selling price and replenish cycle and to be able to maximize the system's profit. To do so, first, the system's total profit function was derived. Then, the uniqueness of the optimal replenishment cycle for a given price was proved. Next, the concavity of the total profit function concerning the price was revealed, depending on the trade credit policy. Thereafter, an algorithm was provided to fulfill the optimal solution and eventually a dual-purpose numerical analysis was carried out both to show the model performance and to evaluate the sensitivity of the main parameters.
