Supply chain modeling: Pricing, contracts and coordination

This research studies three fundamental and important problems in supply chain management: newsvendor problem with pricing, supply chain coordination with pricing and newsvendor pricing game.; We start with the newsvendor-pricing problem and establish a general stochastic demand model. We assume that the mean demand has increasing price elasticity (IPE) and the stochastic factor has a distribution of generalized strictly increasing failure rate (GSIFR). Such a model generalizes most of the existing demand models and exhibits clear economic interpretations. We also find the reason of what leads to the different pricing policies between the multiplicative model and the additive model. Then for both models, we prove the existence and uniqueness of the optimal pricing and inventory solution.; Then we extend our model from a single-supplier model to a one-supplier-one-retailer vertical supply chain facing stochastic price-dependent demand. By using an i.e. buy-back, quantity flexibility and penalty scheme contract, and show why they fail to coordinate such a supply chain. With the implications obtained in this analysis, we design a profit-sharing contract and show how it can achieve maximum channel profit. We also discuss the advantages of this contract and demonstrate how it can be extended to more complex settings such as the two-stage production problem with information updating.; Finally we move from vertical competition to horizontal competition and consider a n-player newsvendor pricing game. The single-supplier demand model is extended to incorporate the differentiated and substitutable characteristics of the products. We prove that there exists a pure-strategy Nash equilibrium in the game. For uniqueness, it can be shown that the contraction approach and the univalence approach fail in our setting. So a new approach based on the index theorem is applied and we prove that the equilibrium in the game is also unique. Through comparison between the competitive equilibrium and the cooperative equilibrium we show that competition always leads to lower equilibrium prices.