Collaborative Optimal Pricing Model of Dual-Channel Supply Chain

ABSTRACT

Dual-channel not only provides reasonable products but also a large quantity of opportunities, where the members’ attitude towards risk has a major impact on channel optimization. In this paper, risks are classified as general risk and interruption risk. As for general risk, combined with risk-aversion attitude, mean-variance method is used to build optimal pricing model and expected utility model based on independent decision-making and collaborative decision-making mode. Besides, online channel substitution effect factor and ratio factor that manufacturer bears promotional cost for retailers are considered. For interruption risk, combined with risk-aversion attitude, optimal pricing model and expected utility model based on independent decision-making mode. Finally, through numerical analysis, it is proved that dualchannel collaborative pricing enables to avoid risks effectively, and the channel member with higher degree of risk aversion tends to take collaborative pricing strategy.

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