학술논문
Coordination of Competing Supply Chains: Wholesale Pricing vs. Two-Part Tariff
Document Type
Conference
Source
2023 IEEE International Conference on Industrial Engineering and Engineering Management (IEEM) Industrial Engineering and Engineering Management (IEEM), 2023 IEEE International Conference on. :0078-0082 Dec, 2023
Subject
Language
Abstract
In recent years, market competition is gradually changing from interactions of enterprises to that of competing supply chains. And this chain-to-chain competition raises a new problem: how to internally coordinate one chain to cope with the competition of another chain. To address this problem the paper investigates two pricing strategies: the wholesale pricing strategy and the two-part tariff, and compares the performance of the two strategies by employment of Nash bargaining model. The paper obtains new insights as follows: First, previous studies based on single-chain argue that two-part tariff can better coordinate the supply chain compared to wholesale pricing strategy. This is not always the case in chain-to-chain competition: two-part tariff is better only when competition intensity is relatively low. In contrast, wholesale pricing strategy is more adaptive when competition exceeds a certain threshold. Second, the choice of pricing strategy is also related to the power structure of supply chain. As the bargaining power of retailers increases, the incentive to implement a wholesale pricing strategy is increasing and the two-part tariff is decreasing.