Joint Production And Pricing Decisions In Different Supply Chain Structures

To help firms dealing with the challenges of customers' diverse demands,vertical competitions,and horizontal competitions,this dissertation studies three interesting problems of joint production and pricing decisions in different supply chain structures,respectilvely.Using operations research,optimization method,and game theory to solve these problems,and jointly using numerical studies,these researches leads to a series of intereting insights,which might help firms to improve performances in business world.The following topics are addressed:Firstly,to help firms dealing with the diverse demands of customers,this dissertation studies a manufacturer's optimal product variety,pricing and scheduling decisions in a single flexible production facility when customers have private information in their marginal valuations for product qualities.In addition to determining the product variety and price of each product,the manufacturer needs to optimize a detailed schedule of production(batch sizes and production sequences)to fully utilize the flexibility of this facility.To achieve the second-degree discrimination,the manufacturer provides multiple products and follows a priority rule in the production schedule.To obtain economies of scale,the manufacturer may offer a composite product targeting the whole population,or choose a dedicated product to serve a proportion of customers.Comparing these three production choices,we observe that the optimal product variety strategy is threshold controlled by the relative ratio of customer arrival rates,the relative difference between customers' marginal valuations and the production technology.Secondly,to help firms coping with vertical competitions,this dissertation studies the benefits brought by strategic inventory and M2C rebates in 4 kinds of competitive supply chains.We find that in different environments of competition,if only the holding cost for each unit of product carried in inventory is low enough,the retailers strictly benefit from holding strategic inventory,and the retailers' decisions to hold strategic inventory also benefit the manufacturers and consumers alike.However,the competition results in that a lower holding cost for each unit of product is needed for the positive effect of strategic inventories to appear.We also find that the decisions of manufacturuers to offer M2C rebates can improve payoffs of manufacturers and retailers and the comsumer surplus even further,if the holding cost for each unit of product is low enough.However,the more intense the competition is,the less benefit the strategic inventory and rebates can bring;while the more complementary the two products are,the more benefit the strategic inventory and rebates can bring.Thirdly,to help firms dealing with horizontal competitions,this dissertation investigates the effects and incentive of vertical mergers in a supply chain with three types of firms(i.e.suppliers,manufacturers and integrated firms).Integrated firms can sell both intermediate and final goods,while suppliers and manufacturers can sell only intermediate or final goods,respectively.Whether selling intermediate goods to other manufacturers is introduced as the integrated firms' endogenous decisions.We find that a vertical merger always decreases the price of final products,both the production quantity and the profits of each unintegrated manufacturer and integrated firm,and most of the time leads to a drop in the total profit of the supply chain;while it always results in a rise in the quantity of final products and social welfare.Secondly,we find that market foreclosure only happens when competition among integrated firms is weak;and vertical mergers occur only when competition among unintegrated manufacturers is weak.Finally,we provide a theoretical explanation for the phenomenon of merger waves with the aid of our model.