Pricing decisions in dual-channel supply chain with one manufacturer and multiple retailers: A game-theoretic approach

Department of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan 84156-83111, Iran.
hamed.jafari@in.iut.ac.ir; rehejazi@cc.iut.ac.ir; rasti@cc.iut.ac.ir

Received: 17 February 2016
Accepted: 22 December 2016

Abstract

In this study, to price a product that can be simultaneously sold in the e-tail and retail channels, a dual-channel supply chain is considered containing one manufacturer and multiple retailers. In this setting, the game-theoretic approach is applied to obtain the equilibrium prices To our best knowledge, the game-theoretic frameworks proposed to price the products in the dual-channel supply chain have considered a single retailer in the retail channel, while multiple retailers can exist in the retail channel in practice. It is assumed that the manufacturer and retailers have the same decision powers. First, the Nash game model is established to set the prices in decentralized model A centralized model is presented to maximize the profit of the whole system. Then, a coordination mechanism based on the linear quantity discount schedule is applied to fully coordinate the supply chain. Finally, the Nash bargaining model is used to share the extra profit given by the whole system cooperation among the members