Operation And Coordination Of Supply Chain In The Presence Of Strategic Consumer Behavior

It’s quite common that when strategic consumers anticipate products’ prices rise orfall, they will rush to purchase or wait for lower price correspondingly. However, traditionalsupply chain models only pay attention to total demand, not to consumer behavior. Thisdissertation intends to interpret relationship between consumer behavior and firm’s market-ing strategies in the presence of different types of consumers, and analyzes influences ofstrategic consumers on firm’s pricing, quality and inventory decisions. Further we extenddecisions to two-echelon supply chains, in order to find better information sharing way andcontract coordination pattern.We analyze how strategic consumers’ fraction affects firm’s decision. With randomconsumers’ evaluation, we compare three strategies: rationing dynamic pricing, unrationingdynamic pricing and everyday low pricing in the situation of exogenous and endogenousprices, endogenous discount respectively. When price is exogenous, rationing dynamic pric-ing is optimal only if there is a sufficiently large segment of high-valuation consumers andthe proportion of strategic consumer is medium. When price is endogenous, rationing dy-namic pricing is always inferior. Everyday low pricing outperforms while the number ofstrategic consumer is small, otherwise unrationing dynamic pricing is optimal. When bothmarket demand and consumers’ evaluation are random variables, we compare rationing andprice commitment(keeping prices high) policies: rationing can induce strategic consumersto purchase earlier, while price commitment can totally deter consumers’ waiting behavior.When strategic consumers’ fraction is relatively low, rationing will be preferred, and pricecommitment tends to be more valuable when strategic consumers’ fraction becomes larger.We then add quality decision to firms’ decision. Research shows that strategies such asimproving product quality, quick response to the market demand can induce strategic con-sumers to buy earlier, but what’s the relationship between quality design and quick response?We categorize strategies into four classes, different from each other in two dimensions: con-sumer type and ordering policy. It’s indicated that if consumers are strategic, quality designand quick response can provide enormous additional benefits; when consumers are myopic,quick response should be cooperated with higher quality, and when consumers are strategic, quick response should be combined with lower quality.Lastly, we extend firms’ decisions to two-echelon supply chains, concentrate on theimpact of strategic consumer behavior on supply chain coordination with one retailer andone supplier. Strategic consumers anticipate future price and choose optimal purchasetiming. With strategic consumer behavior, we find that (i)the more patient consumers are,the less profit firms have;(ii)quantity commitment can improve supply chain’s profit, butit is not credible;(iii)the desired profit with quantity commitment can be attained througheither wholesale price contract under retailer managed inventory or revenue sharing contractunder vendor managed inventory, and supply chain efficiency can be improved if firm whodon’t carry the risk of inventory has more market power. If supplier decides quality, optimalquality is related to the bargaining power of retailer and supplier. The more power supplierhas, the higher the quality. When wholesale price is completely decided by supplier,strategic consumer may increase unfairness between supplier and retailer, and supplier canget a larger proportion of the profits.