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- Title
PRICING AND INVESTMENT STRATEGY FOR DIGITAL TECHNOLOGY IN A SUPPLY CHAIN.
- Authors
Nguyen Thi My Hanh; Jen-Ming Chen
- Abstract
This study addresses the problem of the pricing and investment strategy for smart technology under a supply chain with one manufacturer and one retailer. The models are constructed to investigate the strategic choices of supply chain members for investing in digital/smart technology under three scenarios: the M-system, wherein only the manufacturer fully pays for the investment cost; the S-system, wherein the manufacturer and retailer share the investment cost; and the R-system, wherein the retailer fully pays for the investment cost. We formulate analytical models to determine the optimal wholesale price, retail price and investment strategy in a Stackelberg game setting. Our findings show that the S-system is the most appropriate choice for both the manufacturer and retailer. We also suggest the appropriate investment sharing ratio to achieve Pareto improvement under such an arrangement.
- Subjects
INVESTMENT policy; SUPPLY chains; PRICES; WHOLESALE prices; RETAIL industry; DIGITAL technology
- Publication
International Journal of Industrial Engineering, 2022, Vol 29, Issue 6, p931
- ISSN
1072-4761
- Publication type
Article
- DOI
10.23055/ijietap.year.vol.no.id