Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains
Pharmaceutical supply chains are often highly complex with conflicting objectives of social welfare and profit maximization. Furthermore, there are various stakeholders including pharmaceutical manufacturer, distributors, retailers, patients, and the government. In this paper, we consider a two-stag...
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| Format: | Article |
| Language: | English |
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Wiley
2020-01-01
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| Series: | Complexity |
| Online Access: | http://dx.doi.org/10.1155/2020/7471948 |
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| _version_ | 1832547017062088704 |
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| author | Yi Zheng Li Liu Victor Shi Bin Liu Wenxing Huang |
| author_facet | Yi Zheng Li Liu Victor Shi Bin Liu Wenxing Huang |
| author_sort | Yi Zheng |
| collection | DOAJ |
| description | Pharmaceutical supply chains are often highly complex with conflicting objectives of social welfare and profit maximization. Furthermore, there are various stakeholders including pharmaceutical manufacturer, distributors, retailers, patients, and the government. In this paper, we consider a two-stage supply chain consisting of one pharmaceutical manufacturer and a pharmacy with online and offline channels. We focus on four price cap models: no price cap regulation, pharmaceutical manufacturer’s price cap regulation, pharmacy price cap regulation, and linkage price cap regulation. We apply game theory, investigate how the price cap regulations affect the firms’ pricing, and evaluate the economic performance and social welfare of the dual-channel pharmaceutical supply chain. Our findings show that first, like the single-channel pharmaceutical supply chain, the profit of the regulated firm always decreases and the profit of the unregulated firm always increases when they are under one-sided price cap regulations. Second, the impacts of the linkage price cap regulation on the supply chain are more complicated depending on the linkage coefficient and market share. Overall, our findings can provide theoretical and practical insights to help the government devise price cap regulations for complex modern pharmaceutical supply chains. |
| format | Article |
| id | doaj-art-71933fbfea2146be809b1d0c1450463e |
| institution | Kabale University |
| issn | 1076-2787 1099-0526 |
| language | English |
| publishDate | 2020-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Complexity |
| spelling | doaj-art-71933fbfea2146be809b1d0c1450463e2025-02-03T06:46:21ZengWileyComplexity1076-27871099-05262020-01-01202010.1155/2020/74719487471948Price Cap Models in Pharmaceutical Online-to-Offline Supply ChainsYi Zheng0Li Liu1Victor Shi2Bin Liu3Wenxing Huang4Department of Industrial Engineering, School of Management, Xihua University, Chengdu 610039, ChinaResearch Institute of International Economics and Management Science, Xihua University, Chengdu 610039, ChinaLazaridis School of Business and Economics, Wilfrid Laurier University, ON N2L 3C5, Waterloo, CanadaShanghai Business School, Shanghai, ChinaDepartment of Industrial Engineering, School of Management, Xihua University, Chengdu 610039, ChinaPharmaceutical supply chains are often highly complex with conflicting objectives of social welfare and profit maximization. Furthermore, there are various stakeholders including pharmaceutical manufacturer, distributors, retailers, patients, and the government. In this paper, we consider a two-stage supply chain consisting of one pharmaceutical manufacturer and a pharmacy with online and offline channels. We focus on four price cap models: no price cap regulation, pharmaceutical manufacturer’s price cap regulation, pharmacy price cap regulation, and linkage price cap regulation. We apply game theory, investigate how the price cap regulations affect the firms’ pricing, and evaluate the economic performance and social welfare of the dual-channel pharmaceutical supply chain. Our findings show that first, like the single-channel pharmaceutical supply chain, the profit of the regulated firm always decreases and the profit of the unregulated firm always increases when they are under one-sided price cap regulations. Second, the impacts of the linkage price cap regulation on the supply chain are more complicated depending on the linkage coefficient and market share. Overall, our findings can provide theoretical and practical insights to help the government devise price cap regulations for complex modern pharmaceutical supply chains.http://dx.doi.org/10.1155/2020/7471948 |
| spellingShingle | Yi Zheng Li Liu Victor Shi Bin Liu Wenxing Huang Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains Complexity |
| title | Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains |
| title_full | Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains |
| title_fullStr | Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains |
| title_full_unstemmed | Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains |
| title_short | Price Cap Models in Pharmaceutical Online-to-Offline Supply Chains |
| title_sort | price cap models in pharmaceutical online to offline supply chains |
| url | http://dx.doi.org/10.1155/2020/7471948 |
| work_keys_str_mv | AT yizheng pricecapmodelsinpharmaceuticalonlinetoofflinesupplychains AT liliu pricecapmodelsinpharmaceuticalonlinetoofflinesupplychains AT victorshi pricecapmodelsinpharmaceuticalonlinetoofflinesupplychains AT binliu pricecapmodelsinpharmaceuticalonlinetoofflinesupplychains AT wenxinghuang pricecapmodelsinpharmaceuticalonlinetoofflinesupplychains |