Joint Optimal Decisions on Pricing and Local Advertising Policy of a Socially Responsible Dual-Channel Supply Chain
03 Apr 2018-American Journal of Mathematical and Management Sciences (Taylor & Francis)-Vol. 37, Iss: 2, pp 117-143
TL;DR: In this paper, a socially responsible dual channel supply chain model with local advertising is investigated, where the socially concerned manufacturer employs a direct channel and a retail channel to support local advertising.
Abstract: This article investigates a socially responsible dual channel supply chain model with local advertising, where the socially concerned manufacturer employs a direct channel and a retail channel to v...
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Abstract: Article history: Received September 25 2019 Received in Revised Format December 28 2019 Accepted December 31 2019 Available online January 2 2020 In the world of digitization, e-commerce practices has become more popular and attracts manufacturers to combine their traditional retail channel with an e-channel. To add some salient features in the existing study, this study develops an optimal pricing and profit decision model for manufacturer-led dual-channel supply chain configurations; namely Vertically Integrated Dual-Supply Chain (VID-SC), Decentralized Dual-channel Supply Chain (DD-SC), Partially Integrate Dual-Supply Chain (PID-SC) and Horizontally Integrated Dual-Supply Chain (HIDSC). The aim of this study is to examine the effect of selected decision parameters namely cooperative advertisement, delivery lead time and free-riding on price and profit of manufacturer-led dual supply chain configurations. A linear programming for profit maximization is developed and backward induction method is used to find the optimum values of price and profit. A numerical analysis is performed to evaluate the effect of selected decision parameters on price and profit. To check the robustness of the outcomes an interaction plot is made to indicate the relationship between the selected decision parameters on optimum price. The best fit values of these decision parameters lead to the optimum price and the profit. The study helps to find the best fit value of the selected decision parameters for their specified dualchannel configuration. As a result, the model contributes as a guideline moreover it is proficient to guide manufacturers and channel members as a decision making practices without actual implementation of any strategy or policy. © 2020 by the authors; licensee Growing Science, Canada
4 citations
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TL;DR: In this article, the authors proposed a CSR enabled dual-channel supply chain (DCSC) model pricing in which the demand is considered to be stochastic and market share distribution between channels in DCSC is optimally determined using a differentiation price, and the impact of demand leakages is also taken into consideration.
Abstract: Corporate social responsibility (CSR) has received much of the attention in supply chain management, in particular the pricing decisions. Most existing models that enable CSR integration into pricing decisions in a supply chain context assume deterministic demand and focus on a single distribution channel. Despite the fact that dual-channel supply chain (DCSC) has received popularity, most pricing decisions models in DCSC assume fixed and deterministic market share distribution between channels, and no demand leakages (cannibalization). This paper addresses these gaps by proposing a CSR enabled DCSC model pricing in which the demand is considered to be stochastic and market share distribution between channels in DCSC is optimally determined using a differentiation price, and the impact of demand leakages is also taken into consideration. Unlike existing studies, which only enable pricing decisions due to deterministic demand consideration, comprehensive DCSC models are proposed that provide joint decisions framework on CSR investment, pricing, and inventories. We have also considered the extension of the demand scenario when the distribution of demand is unknown. The two most common coordination schemes, the centralized (integrated) and the decentralized coordination is explored for the three demand situations: (i) deterministic demand; (ii) stochastic with full information; and (iii) stochastic with partial information. We are able to find analytical (closed-form) solutions for most demand situations. The centralized coordination performed better compared to the decentralized for all demand scenarios. The models are benchmarked when the demand is stochastic with known and unknown distributions, as well as, the case of the deterministic demand. A detailed numerical analysis is also presented in order to study the impact of using the price differentiation for market segmentation, the demand leakage, and partial knowledge on the stochastic demand on the players’ decisions and revenues in the supply chain.
3 citations
References
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TL;DR: In this paper, a theory of stakeholder identification and saliency based on stakeholders possessing one or more of three relationship attributes (power, legitimacy, and urgency) is proposed, and a typology of stakeholders, propositions concerning their saliency to managers of the firm, and research and management implications.
Abstract: Stakeholder theory has been a popular heuristic for describing the management environment for years, but it has not attained full theoretical status. Our aim in this article is to contribute to a theory of stakeholder identification and salience based on stakeholders possessing one or more of three relationship attributes: power, legitimacy, and urgency. By combining these attributes, we generate a typology of stakeholders, propositions concerning their salience to managers of the firm, and research and management implications.
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TL;DR: For the better part of 30 years now, corporate executives have struggled with the issue of the firm's responsibility to its society, and it became quickly apparent to everyone, however, that this pursuit of financial gain had to take place within the laws of the land.
Abstract: F or the better part of 30 years now, corporate executives have struggled with the issue of the firm's responsibility to its society. Early on it was argued by some that the corporation's sole responsibility was to provide a maximum financial return to shareholders. It became quickly apparent to everyone, however, that this pursuit of financial gain had to take place within the laws of the land. Though social activist groups and others throughout the 1960s advocated a broader notion of corporate responsibility, it was not until the significant social legislation of the early 1970s that this message became indelibly clear as a result of the creation of the Environmental Protection Agency (EPA), the Equal Employment Opportunity Commission (EEOC), the Occupational Safety and Health Administration (OSHA), and the Consumer Product Safety Commission (CPSC).
6,369 citations
"Joint Optimal Decisions on Pricing ..." refers background in this paper
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TL;DR: In this paper, five dimensions of CSR are developed through a content analysis of existing CSR definitions, and frequency counts are used to analyse how often these dimensions are invoked, concluding that the existing definitions are to a large degree congruent.
Abstract: Despite numerous efforts to bring about a clear and unbiased definition of CSR, there is still some confusion as to how CSR should be defined. In this paper five dimensions of CSR are developed through a content analysis of existing CSR definitions. Frequency counts are used to analyse how often these dimensions are invoked. The analysis shows that the existing definitions are to a large degree congruent. Thus it is concluded that the confusion is not so much about how CSR is defined, as about how CSR is socially constructed in a specific context. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.
2,937 citations
"Joint Optimal Decisions on Pricing ..." refers background in this paper
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TL;DR: Several limitations of revenue sharing are identified to (at least partially) explain why it is not prevalent in all industries, including cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract.
Abstract: Under a revenue-sharing contract, a retailer pays a supplier a wholesale price for each unit purchased, plus a percentage of the revenue the retailer generates. Such contracts have become more prevalent in the videocassette rental industry relative to the more conventional wholesale price contract. This paper studies revenue-sharing contracts in a general supply chain model with revenues determined by each retailer's purchase quantity and price. Demand can be deterministic or stochastic and revenue is generated either from rentals or outright sales. Our model includes the case of a supplier selling to a classical fixed-price newsvendor or a price-setting newsvendor. We demonstrate that revenue sharing coordinates a supply chain with a single retailer (i.e., the retailer chooses optimal price and quantity) and arbitrarily allocates the supply chain's profit. We compare revenue sharing to a number of other supply chain contracts (e.g., buy-back contracts, price-discount contracts, quantity-flexibility contracts, sales-rebate contracts, franchise contracts, and quantity discounts). We find that revenue sharing is equivalent to buybacks in the newsvendor case and equivalent to price discounts in the price-setting newsvendor case. Revenue sharing also coordinates a supply chain with retailers competing in quantities, e.g., Cournot competitors or competing newsvendors with fixed prices. Despite its numerous merits, we identify several limitations of revenue sharing to (at least partially) explain why it is not prevalent in all industries. In particular, we characterize cases in which revenue sharing provides only a small improvement over the administratively cheaper wholesale price contract. Additionally, revenue sharing does not coordinate a supply chain with demand that depends on costly retail effort. We develop a variation on revenue sharing for this setting.
2,067 citations
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TL;DR: This paper used a stakeholder framework to review the empirical literature on corporate social performance (CSP), focusing particularly on studies attempting to correlate social with financial performance, finding that most studies correlate measures of business performance that as yet have no theoretical relationship (for example, the level of corporate charitable giving with return on investment).
Abstract: This paper uses a stakeholder framework to review the empirical literature on corporate social performance (CSP), focusing particularly on studies attempting to correlate social with financial performance. Results show first that most studies correlate measures of business performance that as yet have no theoretical relationship (for example, the level of corporate charitable giving with return on investment). To make sense of this body of research, CSP studies must be integrated with stakeholder theory. Multiple stakeholders (a) set expectations for corporate performance, (b) experience the effects of corporate behavior, and (c) evaluate the outcomes of corporate behavior. However, we find that the empirical CSP literature mismatches variables in terms of which stakeholders are relevant to which kind of measure. Second, only the studies using market‐based variables and theory show a consistent relationship between social and financial performance, particularly those showing a negative abnormal return to the stock price of companies experiencing product recalls. Although this paper shows that the CSP construct is not yet well‐specified enough to produce stronger results, recent research suggests that much progress is being made both empirically and theoretically in developing valid and reliable measures of corporate social performance.
1,065 citations
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