A game theoretic approach for pricing, advertising, and service level decisions in a dual-channel supply chain: Centralized decision

Document Type : Research Paper

Authors

Department of Industrial and Systems Engineering, Isfahan University of Technology

Abstract

Different variables effect on customer decision in product selection. The most important factor are price and service provided by the manufacturer to the customer. Advertising is one of the effective factors in the selection and purchase of goods is usually done by the manufacturer to increase goodwill of manufacturer brand. Therefore in this research we use centralized game approach to find optimal price, service level & advertising level in a dual channel supply chain simultaneously. Chain used in this study included a manufacturer and a retailer in which the manufacturer sells its products through retailer and through direct channel. Demand function used in this paper provide review possibility of three elements of price, service and advertising on customer demand seamlessly at the same time. Conduct examined in this paper, is cooperative behavior. Therefore, after modeling the problem is solved by centralized approach. After numerical examples, sensitivity analysis performed in this study provide the effect of important parameters on decisions players particularly price sensitivity factor. The issue examined in this study had a variety of practical applications for example can be cited its use in airlines, manufacturing sets and retailers to determine prices, service and advertising.

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References

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Journal of Industrial Engineering Research in Production Systems
Volume 6, Issue 13
Winter and Spring 2019
March 2019
Pages 179-193

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