Optimal Retail Price Model for Partial Consignment to Multiple Retailers
This paper investigates the product pricing decision-making problem under a consignment stock policy in a two-level supply chain composed of one supplier and multiple retailers. The effects of the supplier’s wholesale prices and its partial inventory cost absorption of the retail prices of retailers...
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| Format: | Article |
| Language: | English |
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Wiley
2017-01-01
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| Series: | Complexity |
| Online Access: | http://dx.doi.org/10.1155/2017/1972532 |
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| _version_ | 1832560890784776192 |
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| author | Po-Yu Chen |
| author_facet | Po-Yu Chen |
| author_sort | Po-Yu Chen |
| collection | DOAJ |
| description | This paper investigates the product pricing decision-making problem under a consignment stock policy in a two-level supply chain composed of one supplier and multiple retailers. The effects of the supplier’s wholesale prices and its partial inventory cost absorption of the retail prices of retailers with different market shares are investigated. In the partial product consignment model this paper proposes, the seller and the retailers each absorb part of the inventory costs. This model also provides general solutions for the complete product consignment and the traditional policy that adopts no product consignment. In other words, both the complete consignment and nonconsignment models are extensions of the proposed model (i.e., special cases). Research results indicated that the optimal retail price must be between 1/2 (50%) and 2/3 (66.67%) times the upper limit of the gross profit. This study also explored the results and influence of parameter variations on optimal retail price in the model. |
| format | Article |
| id | doaj-art-ade28d57792f4d7ab65ca9974a480499 |
| institution | Kabale University |
| issn | 1076-2787 1099-0526 |
| language | English |
| publishDate | 2017-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Complexity |
| spelling | doaj-art-ade28d57792f4d7ab65ca9974a4804992025-02-03T01:26:31ZengWileyComplexity1076-27871099-05262017-01-01201710.1155/2017/19725321972532Optimal Retail Price Model for Partial Consignment to Multiple RetailersPo-Yu Chen0Department of Advertising and Strategic Marketing, Ming Chuan University, No. 250 Zhong Shan N. Rd., Sec. 5, Taipei, TaiwanThis paper investigates the product pricing decision-making problem under a consignment stock policy in a two-level supply chain composed of one supplier and multiple retailers. The effects of the supplier’s wholesale prices and its partial inventory cost absorption of the retail prices of retailers with different market shares are investigated. In the partial product consignment model this paper proposes, the seller and the retailers each absorb part of the inventory costs. This model also provides general solutions for the complete product consignment and the traditional policy that adopts no product consignment. In other words, both the complete consignment and nonconsignment models are extensions of the proposed model (i.e., special cases). Research results indicated that the optimal retail price must be between 1/2 (50%) and 2/3 (66.67%) times the upper limit of the gross profit. This study also explored the results and influence of parameter variations on optimal retail price in the model.http://dx.doi.org/10.1155/2017/1972532 |
| spellingShingle | Po-Yu Chen Optimal Retail Price Model for Partial Consignment to Multiple Retailers Complexity |
| title | Optimal Retail Price Model for Partial Consignment to Multiple Retailers |
| title_full | Optimal Retail Price Model for Partial Consignment to Multiple Retailers |
| title_fullStr | Optimal Retail Price Model for Partial Consignment to Multiple Retailers |
| title_full_unstemmed | Optimal Retail Price Model for Partial Consignment to Multiple Retailers |
| title_short | Optimal Retail Price Model for Partial Consignment to Multiple Retailers |
| title_sort | optimal retail price model for partial consignment to multiple retailers |
| url | http://dx.doi.org/10.1155/2017/1972532 |
| work_keys_str_mv | AT poyuchen optimalretailpricemodelforpartialconsignmenttomultipleretailers |