Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition
This paper studies the complex characteristics caused by the price competition in multichannel household appliance supply chains. We consider a two-level household appliance supply chain system consisting of a manufacturer with an Internet channel and a retailer with a traditional channel and an Int...
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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/10.1155/2017/4327069 |
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| author | Junhai Ma Wandong Lou |
| author_facet | Junhai Ma Wandong Lou |
| author_sort | Junhai Ma |
| collection | DOAJ |
| description | This paper studies the complex characteristics caused by the price competition in multichannel household appliance supply chains. We consider a two-level household appliance supply chain system consisting of a manufacturer with an Internet channel and a retailer with a traditional channel and an Internet channel. Each channel’s price-setting follows the bounded rational decision process in order to obtain the optimal profit or more market share. Considering that the price competition often leads to the demand and order fluctuation, we also investigate the bullwhip effect of the multichannel supply chains on the basis of the order-up-to-inventory policy. From the numerical simulation, we find a system in a chaotic state will suffer larger bullwhip effect than a stable system, and the manufacturer’s Internet channel is helpful to mitigate the bullwhip effect. Our results provide some useful managerial inspirations for the household manufacturer and retailers. Firstly, each channel should make their retail price with a suitable price adjustment speed in the stable region, and each time pricing cannot exceed the domain of attraction. Secondly, the manufacturer can adopt a more radical pricing strategy in their Internet channel to mitigate the bullwhip effect. Thirdly, the price adjustment should be reviewed and be appropriately reduced if the price adjustment is too large. |
| format | Article |
| id | doaj-art-e0bf500e16094d74966672cfbaa3bf4f |
| institution | Kabale University |
| issn | 1076-2787 1099-0526 |
| language | English |
| publishDate | 2017-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Complexity |
| spelling | doaj-art-e0bf500e16094d74966672cfbaa3bf4f2025-02-03T01:22:20ZengWileyComplexity1076-27871099-05262017-01-01201710.1155/2017/43270694327069Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price CompetitionJunhai Ma0Wandong Lou1College of Management and Economics, Tianjin University, Tianjin 300072, ChinaCollege of Management and Economics, Tianjin University, Tianjin 300072, ChinaThis paper studies the complex characteristics caused by the price competition in multichannel household appliance supply chains. We consider a two-level household appliance supply chain system consisting of a manufacturer with an Internet channel and a retailer with a traditional channel and an Internet channel. Each channel’s price-setting follows the bounded rational decision process in order to obtain the optimal profit or more market share. Considering that the price competition often leads to the demand and order fluctuation, we also investigate the bullwhip effect of the multichannel supply chains on the basis of the order-up-to-inventory policy. From the numerical simulation, we find a system in a chaotic state will suffer larger bullwhip effect than a stable system, and the manufacturer’s Internet channel is helpful to mitigate the bullwhip effect. Our results provide some useful managerial inspirations for the household manufacturer and retailers. Firstly, each channel should make their retail price with a suitable price adjustment speed in the stable region, and each time pricing cannot exceed the domain of attraction. Secondly, the manufacturer can adopt a more radical pricing strategy in their Internet channel to mitigate the bullwhip effect. Thirdly, the price adjustment should be reviewed and be appropriately reduced if the price adjustment is too large.http://dx.doi.org/10.1155/2017/4327069 |
| spellingShingle | Junhai Ma Wandong Lou Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition Complexity |
| title | Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition |
| title_full | Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition |
| title_fullStr | Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition |
| title_full_unstemmed | Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition |
| title_short | Complex Characteristics of Multichannel Household Appliance Supply Chain with the Price Competition |
| title_sort | complex characteristics of multichannel household appliance supply chain with the price competition |
| url | http://dx.doi.org/10.1155/2017/4327069 |
| work_keys_str_mv | AT junhaima complexcharacteristicsofmultichannelhouseholdappliancesupplychainwiththepricecompetition AT wandonglou complexcharacteristicsofmultichannelhouseholdappliancesupplychainwiththepricecompetition |