The equilibrium results analysis in a competing supply chains with consumer returns
Abstract: The purpose of this
paper is, to examine the optimal pricing and ordering strategy of two competing
chains with customer returns in Bertrand-Nash game and Stackelberg game, and to
investigate in what cases the manufacturer can make more profits from customer
returns policy.
Design/methodology/approach: We build the customer returns model in the
competing chains and compare the equilibrium results in Bertrand-Nash game with
that in Stackelberg game.
Findings: The main contribution of the present study is the manufacturer
can benefit from customer returns policy, only if customer return rate is
sufficiently low in two games. In addition, the optimal price, order quantity
and profits in Stackelberg game are affected more seriously by customer returns
than that in Bertrand-Nash game.
Originality/value: The impact of customer returns on the competing chain
is initially considered, where the demand is related with the retail price and
return price.
Author: Jian Liu, Haiyan Wang
Journal Code: jptindustrigg130044
