| dc.description.abstract | In this study, we consider a two-echelon supply chain, consisted of two competing suppliers and one retailer. There’s price competition existed between two suppliers and reflected on the demand function, where the demand is affected by the price of one of the suppliers itself and the other’s price as well. Also, the two suppliers’ products are substitutes. Under different scenarios, the suppliers and the retailer act as Stackelberg leader and follower in turn and intend to maximize their own profits or the supply chain’s total profit. We observe the optimal decisions of these scenarios, such as Centralized Model, Revenue Sharing Model, and Decentralized Model. Furthermore, we try to give the insight into the sensitivity of the optimal decisions and the channel’s total profit under the variations of system parameters.
We observe the relation between the optimal price of centralized model and the optimal price of revenue sharing model theoretically and verify it numerically. Also, we present the profit allocation between the retailer and suppliers with different revenue sharing proportions. Finally, we gain the insight into the effect of the variations of system parameters on the optimal decisions and the channel’s total profit, such as the optimal price would rise as the system parameters, like cross-price elasticity, total channel cost, and market size increase.
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