Price competition model in decentralized and centralized supply chains with demand disruption
Abstract: The paper studies
the price competition of a supply chain with one supplier and two competing
retailers under occasional demand disruption.
Design/methodology/approach: The supply chain is either decentralized or
centralized. The demand disruption for two retailers occurs with different
probability. We analyze the effect of occurrence probability of demand
disruption on the optimal prices of the supplier and two retailers.
Findings: We find that the profits of supplier, retailers and supply
chain are decreasing with the occurrence probability of demand disruption.
Originality/value: It is helpful for supply chain members to adjust the
original contracts to demand disruption.
Keywords: Demand disruption,
probability, price competition, profit
Author: Chai Wenlong, Sun
Huijun, Wang Wei, Wu Jianjun
Journal Code: jptindustrigg130046
